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Leases | 12 Months Ended
--- | ---
Dec. 31, 2024
Lessee Disclosure [Abstract] |
Leases | Leases The Corporation and its consolidated affiliates generally purchase the property, plant and equipment used in operations, but there are situations where assets are leased, primarily for drilling equipment, tankers, office buildings, railcars, and other moveable equipment. Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for drilling equipment, tankers, and finance leases is excluded from the calculation of right of use assets and lease liabilities. Generally, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations, assets are leased for nearly all of their useful lives and are accounted for as finance leases. Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. In general, leases are capitalized using the incremental borrowing rate of the leasing affiliate. The Corporation’s activities as a lessor are not significant.
Lease Cost (millions of dollars) |  | Operating Leases |  | Finance Leases
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Operating lease cost |  | 2,296 |  |  | 1,976 |  |  | 1,776 |  |  |  |  |  |  |
Short-term and other (net of sublease rental income) |  | 2,047 |  |  | 1,563 |  |  | 1,389 |  |  |  |  |  |  |
Amortization of right of use assets |  |  |  |  |  |  |  | 140 |  |  | 107 |  |  | 243 |
Interest on lease liabilities |  |  |  |  |  |  |  | 149 |  |  | 140 |  |  | 210 |
Total (1) |  | 4,343 |  |  | 3,539 |  |  | 3,165 |  |  | 289 |  |  | 247 |  |  | 453 |
(1) Includes $1,195 million, $999 million, and $908 million for drilling rigs and related equipment operating leases in 2024, 2023, and 2022, respectively.
Balance Sheet (millions of dollars) |  | Operating Leases |  | Finance Leases
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2024 |  | December 31, 2023
Right of use assets |  |  |  |  |  |  |  |
Included in Other assets, including intangibles - net |  | 7,123 |  |  | 6,849 |  |  |  |  |
Included in Property, plant and equipment - net |  |  |  |  |  | 2,888 |  |  | 2,712 |
Total right of use assets |  | 7,123 |  |  | 6,849 |  |  | 2,888 |  |  | 2,712 |
Lease liability due within one year |  |  |  |  |  |  |  |
Included in Accounts payable and accrued liabilities |  | 1,852 |  |  | 1,617 |  |  | 6 |  |  | 5 |
Included in Notes and loans payable |  |  |  |  |  | 117 |  |  | 95 |
Long-term lease liability |  |  |  |  |  |  |  |
Included in Other long-term obligations |  | 4,626 |  |  | 4,393 |  |  |  |  |
Included in Long-term debt |  |  |  |  |  | 2,123 |  |  | 1,821 |
Included in Long-term obligations to equity companies |  |  |  |  |  | 115 |  |  | 121 |
Total lease liability (2) |  | 6,478 |  |  | 6,010 |  |  | 2,361 |  |  | 2,042 |
Weighted-average remaining lease term (years) |  | 7 |  | 8 |  | 18 |  | 26
Weighted-average discount rate (percent) |  | 4.9% |  | 3.9% |  | 6.4% |  | 7.2%
(2) Includes $2,198 million and $2,032 million for drilling rigs and related equipment operating leases in 2024 and 2023, respectively.
Maturity Analysis of Lease Liabilities (millions of dollars) | Operating Leases |  | Finance Leases
December 31, 2024
2025 | 2,119 |  |  | 275 |
2026 | 1,569 |  |  | 274 |
2027 | 1,134 |  |  | 265 |
2028 | 715 |  |  | 263 |
2029 | 305 |  |  | 256 |
2030 and beyond | 1,712 |  |  | 2,450 |
Total lease payments | 7,554 |  |  | 3,783 |
Discount to present value | (1,076) |  |  | (1,422) |
Total lease liability | 6,478 |  |  | 2,361 |
In addition to the lease liabilities in the table immediately above, at December 31, 2024, undiscounted commitments for leases not yet commenced totaled $3,938 million for operating leases and $1,957 million for finance leases. Estimated cash payments for operating and finance leases not yet commenced are $248 million and $341 million for 2025 and 2026, respectively. Operating leases not yet commenced primarily relate to LNG transportation vessels. Finance leases not yet commenced primarily relate to a long-term processing agreement to upgrade residue to hydrogen. The underlying assets are primarily designed by, and are being constructed by, the lessors.
Other Information (millions of dollars) |  | Operating Leases |  | Finance Leases
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |  |  |  |  |  |
Cash flows from operating activities |  | 1,301 |  |  | 1,135 |  |  | 1,119 |  |  | 20 |  |  | 20 |  |  | 20 |
Cash flows from investing activities |  | 837 |  |  | 758 |  |  | 500 |  |  |  |  |  |  |
Cash flows from financing activities |  |  |  |  |  |  |  | 121 |  |  | 86 |  |  | 149 |
Noncash right of use assets recorded for lease liabilities |  |  |  |  |  |  |  |  |  |  |  |
In exchange for lease liabilities during the period |  | 2,074 |  |  | 2,161 |  |  | 1,997 |  |  | 109 |  |  | 529 |  |  | 73 |
Leases | Leases The Corporation and its consolidated affiliates generally purchase the property, plant and equipment used in operations, but there are situations where assets are leased, primarily for drilling equipment, tankers, office buildings, railcars, and other moveable equipment. Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for drilling equipment, tankers, and finance leases is excluded from the calculation of right of use assets and lease liabilities. Generally, assets are leased only for a portion of their useful lives and are accounted for as operating leases. In limited situations, assets are leased for nearly all of their useful lives and are accounted for as finance leases. Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. In general, leases are capitalized using the incremental borrowing rate of the leasing affiliate. The Corporation’s activities as a lessor are not significant.
Lease Cost (millions of dollars) |  | Operating Leases |  | Finance Leases
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Operating lease cost |  | 2,296 |  |  | 1,976 |  |  | 1,776 |  |  |  |  |  |  |
Short-term and other (net of sublease rental income) |  | 2,047 |  |  | 1,563 |  |  | 1,389 |  |  |  |  |  |  |
Amortization of right of use assets |  |  |  |  |  |  |  | 140 |  |  | 107 |  |  | 243 |
Interest on lease liabilities |  |  |  |  |  |  |  | 149 |  |  | 140 |  |  | 210 |
Total (1) |  | 4,343 |  |  | 3,539 |  |  | 3,165 |  |  | 289 |  |  | 247 |  |  | 453 |
(1) Includes $1,195 million, $999 million, and $908 million for drilling rigs and related equipment operating leases in 2024, 2023, and 2022, respectively.
Balance Sheet (millions of dollars) |  | Operating Leases |  | Finance Leases
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2024 |  | December 31, 2023
Right of use assets |  |  |  |  |  |  |  |
Included in Other assets, including intangibles - net |  | 7,123 |  |  | 6,849 |  |  |  |  |
Included in Property, plant and equipment - net |  |  |  |  |  | 2,888 |  |  | 2,712 |
Total right of use assets |  | 7,123 |  |  | 6,849 |  |  | 2,888 |  |  | 2,712 |
Lease liability due within one year |  |  |  |  |  |  |  |
Included in Accounts payable and accrued liabilities |  | 1,852 |  |  | 1,617 |  |  | 6 |  |  | 5 |
Included in Notes and loans payable |  |  |  |  |  | 117 |  |  | 95 |
Long-term lease liability |  |  |  |  |  |  |  |
Included in Other long-term obligations |  | 4,626 |  |  | 4,393 |  |  |  |  |
Included in Long-term debt |  |  |  |  |  | 2,123 |  |  | 1,821 |
Included in Long-term obligations to equity companies |  |  |  |  |  | 115 |  |  | 121 |
Total lease liability (2) |  | 6,478 |  |  | 6,010 |  |  | 2,361 |  |  | 2,042 |
Weighted-average remaining lease term (years) |  | 7 |  | 8 |  | 18 |  | 26
Weighted-average discount rate (percent) |  | 4.9% |  | 3.9% |  | 6.4% |  | 7.2%
(2) Includes $2,198 million and $2,032 million for drilling rigs and related equipment operating leases in 2024 and 2023, respectively.
Maturity Analysis of Lease Liabilities (millions of dollars) | Operating Leases |  | Finance Leases
December 31, 2024
2025 | 2,119 |  |  | 275 |
2026 | 1,569 |  |  | 274 |
2027 | 1,134 |  |  | 265 |
2028 | 715 |  |  | 263 |
2029 | 305 |  |  | 256 |
2030 and beyond | 1,712 |  |  | 2,450 |
Total lease payments | 7,554 |  |  | 3,783 |
Discount to present value | (1,076) |  |  | (1,422) |
Total lease liability | 6,478 |  |  | 2,361 |
In addition to the lease liabilities in the table immediately above, at December 31, 2024, undiscounted commitments for leases not yet commenced totaled $3,938 million for operating leases and $1,957 million for finance leases. Estimated cash payments for operating and finance leases not yet commenced are $248 million and $341 million for 2025 and 2026, respectively. Operating leases not yet commenced primarily relate to LNG transportation vessels. Finance leases not yet commenced primarily relate to a long-term processing agreement to upgrade residue to hydrogen. The underlying assets are primarily designed by, and are being constructed by, the lessors.
Other Information (millions of dollars) |  | Operating Leases |  | Finance Leases
| 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |  |  |  |  |  |
Cash flows from operating activities |  | 1,301 |  |  | 1,135 |  |  | 1,119 |  |  | 20 |  |  | 20 |  |  | 20 |
Cash flows from investing activities |  | 837 |  |  | 758 |  |  | 500 |  |  |  |  |  |  |
Cash flows from financing activities |  |  |  |  |  |  |  | 121 |  |  | 86 |  |  | 149 |
Noncash right of use assets recorded for lease liabilities |  |  |  |  |  |  |  |  |  |  |  |
In exchange for lease liabilities during the period |  | 2,074 |  |  | 2,161 |  |  | 1,997 |  |  | 109 |  |  | 529 |  |  | 73 |

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