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Note 16 - Leases

12 Months Ended

Dec. 31, 2021

Lessee, Operating and Finance Leases [Text Block]

16. Leases

We lease certain locomotives, freight cars, and other property for use in our rail operations.

The following are additional details related to our lease portfolio:

		Dec. 31,		Dec. 31,
Millions	Classification	2021		2020
Assets
Operating leases	Operating lease assets	$	1,787	$	1,610
Finance leases	Properties, net [a]		366		370
Total leased assets		$	2,153	$	1,980
Liabilities
Current
Operating	Accounts payable and other current liabilities	$	330	$	321
Finance	Debt due within one year		92		109
Noncurrent
Operating	Operating lease liabilities		1,429		1,283
Finance	Debt due after one year		244		340
Total lease liabilities		$	2,095	$	2,053

[a]

Finance lease assets are recorded net of accumulated amortization of $687 million and $737 million as of December 31, 2021 and 2020, respectively.

The lease cost components are classified as follows:

Millions	Dec 31, 2021		Dec 31, 2020
Operating lease cost [a]	$	303	$	317
Short-term lease cost		25		26
Variable lease cost		11		10
Finance lease cost
Amortization of leased assets [b]		69		66
Interest on lease liabilities [c]		20		27
Net lease cost	$	428	$	446

[a]

Operating lease cost is primarily reported in equipment and other rents in our Consolidated Statements of Income.

[b]

Amortization of leased assets is reported in depreciation in our Consolidated Statements of Income.

[c]

Interest on lease liabilities is reported in interest expense in our Consolidated Statements of Income.

The following table presents aggregate lease maturities as of December 31, 2021:

Millions	Operating Leases		Finance Leases		Total
2022	$	333	$	107	$	440
2023		293		81		374
2024		285		68		353
2025		285		45		330
2026		215		36		251
After 2026		555		41		596
Total lease payments	$	1,966	$	378	$	2,344
Less: Interest		207		42		249
Present value of lease liabilities	$	1,759	$	336	$	2,095

The following table presents the weighted average remaining lease term and discount rate:

	Dec. 31,
	2021
Weighted-average remaining lease term (years)
Operating leases		7.3
Finance leases		4.8
Weighted-average discount rate (%)
Operating leases		3.2
Finance leases		4.9

The following table presents other information related to our operating and finance leases for the years ended December 31:

Millions	2021		2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	292	$	323
Investing cash flows from operating leases		27		30
Operating cash flows from finance leases		26		29
Financing cash flows from finance leases		106		113
Leased assets obtained in exchange for finance lease liabilities		-		-
Leased assets obtained in exchange for operating lease liabilities		442		93