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Note 16 - Leases

12 Months Ended

Dec. 31, 2023

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		*2023*			2022
Assets
Operating leases	Operating lease assets		$	1,643		$	1,672
Finance leases	Properties, net [a]			244			310
Total leased assets			$	1,887		$	1,982
Liabilities
Current
Operating	Accounts payable and other current liabilities		$	355		$	331
Finance	Debt due within one year			49			67
Noncurrent
Operating	Operating lease liabilities			1,245			1,300
Finance	Debt due after one year			109			167
Total lease liabilities			$	1,758		$	1,865

[a]

Finance lease assets are recorded net of accumulated amortization of $497 million and $658 million as of December 31, 2023 and 2022, respectively.

The lease cost components are classified as follows:

Millions	*Dec 31, 2023*			Dec 31, 2022
Operating lease cost [a]		$	369		$	338
Short-term lease cost			24			18
Variable lease cost			41			13
Finance lease cost
Amortization of leased assets [b]			38			52
Interest on lease liabilities [c]			8			12
Net lease cost		$	480		$	433

[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, 2023:

Millions	Operating Leases			Finance Leases			Total
2024		$	361		$	55		$	416
2025			375			42			417
2026			296			35			331
2027			237			30			267
2028			199			11			210
After 2028			300			-			300
Total lease payments		$	1,768		$	173		$	1,941
Less: Interest			168			15			183
Present value of lease liabilities		$	1,600		$	158		$	1,758

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

	Dec. 31,
		2023
Weighted-average remaining lease term (years)
Operating leases			5.8
Finance leases			3.5
Weighted-average discount rate (%)
Operating leases			3.6
Finance leases			4.5

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

Millions	*2023*		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	323	$	319
Investing cash flows from operating leases		33		31
Operating cash flows from finance leases		9		15
Financing cash flows from finance leases		65		91
Leased assets obtained in exchange for finance lease liabilities		-		-
Leased assets obtained in exchange for operating lease liabilities	$	241	$	173