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LEASES
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
LEASES LEASES
We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.
Aircraft
In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.
Transportation equipment and other equipment
We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.
Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right of use lease asset and associated lease obligation.
The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows (in millions):
202220212020
Operating lease costs$736 $729 $711 
Finance lease costs:
Amortization of assets$112 $97 $79 
Interest on lease liabilities14 14 18 
Total finance lease costs126 111 97 
Variable lease costs270 246 247 
Short-term lease costs1,499 1,510 1,299 
Total lease costs$2,631 $2,596 $2,354 
In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. We recognized impairment charges of $17 million for the year ended December 31, 2020. There were no material impairments recognized for the years ended December 31, 2022 or 2021.
Supplemental information related to leases and location within our consolidated balance sheets as of December 31, 2022 and 2021 are as follows (in millions, except lease term and discount rate):
20222021
Operating Leases:
Operating lease right-of-use assets$3,755 $3,562 
Current maturities of operating leases$621 $580 
Non-current operating leases3,238 3,033 
Total operating lease obligations$3,859 $3,613 
Finance Leases:
Property, plant and equipment, net$959 $1,125 
Current maturities of long-term debt, commercial paper and finance leases$92 $129 
Long-term debt and finance leases298 279 
Total finance lease obligations$390 $408 
Weighted average remaining lease term (in years):
Operating leases10.811.7
Finance leases8.48.0
Weighted average discount rate:
Operating leases2.32 %1.94 %
Finance leases3.17 %2.79 %
Supplemental cash flow information related to leases for the years ended December 31, 2022 and 2021 is as follows (in millions):
20222021
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases$705 $731 
Operating cash flows from finance leases14 4 
Financing cash flows from finance leases149 208 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$879 $1,247 
Finance leases$122 $280 
Future payments for lease obligations as of December 31, 2022 are as follows (in millions):
Finance LeasesOperating Leases
2023$105 $703 
202456 631 
202542 565 
202635 497 
202734 429 
Thereafter193 1,608 
Total lease payments465 4,433 
Less: Imputed interest(75)(574)
Total lease obligations390 3,859 
Less: Current obligations(92)(621)
Long-term lease obligations$298 $3,238 
As of December 31, 2022, we have additional leases which have not commenced of $1.2 billion. These leases will commence between 2023 and 2024 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.
LEASES LEASES
We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain leases for real estate and aircraft contain options to purchase, extend or terminate the lease.
Aircraft
In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, we are restricted from operating an airline.
Transportation equipment and other equipment
We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as short-term as the cumulative right of use is less than 12 months over the term of the contract.
Some of our transportation and technology equipment leases require us to make additional lease payments based on the underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in the right of use lease asset and associated lease obligation.
The components of lease expense for the years ended December 31, 2022, 2021 and 2020 were as follows (in millions):
202220212020
Operating lease costs$736 $729 $711 
Finance lease costs:
Amortization of assets$112 $97 $79 
Interest on lease liabilities14 14 18 
Total finance lease costs126 111 97 
Variable lease costs270 246 247 
Short-term lease costs1,499 1,510 1,299 
Total lease costs$2,631 $2,596 $2,354 
In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the carrying value of the assets may not be recoverable. We recognized impairment charges of $17 million for the year ended December 31, 2020. There were no material impairments recognized for the years ended December 31, 2022 or 2021.
Supplemental information related to leases and location within our consolidated balance sheets as of December 31, 2022 and 2021 are as follows (in millions, except lease term and discount rate):
20222021
Operating Leases:
Operating lease right-of-use assets$3,755 $3,562 
Current maturities of operating leases$621 $580 
Non-current operating leases3,238 3,033 
Total operating lease obligations$3,859 $3,613 
Finance Leases:
Property, plant and equipment, net$959 $1,125 
Current maturities of long-term debt, commercial paper and finance leases$92 $129 
Long-term debt and finance leases298 279 
Total finance lease obligations$390 $408 
Weighted average remaining lease term (in years):
Operating leases10.811.7
Finance leases8.48.0
Weighted average discount rate:
Operating leases2.32 %1.94 %
Finance leases3.17 %2.79 %
Supplemental cash flow information related to leases for the years ended December 31, 2022 and 2021 is as follows (in millions):
20222021
Cash paid for amounts included in measurement of obligations:
Operating cash flows from operating leases$705 $731 
Operating cash flows from finance leases14 4 
Financing cash flows from finance leases149 208 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$879 $1,247 
Finance leases$122 $280 
Future payments for lease obligations as of December 31, 2022 are as follows (in millions):
Finance LeasesOperating Leases
2023$105 $703 
202456 631 
202542 565 
202635 497 
202734 429 
Thereafter193 1,608 
Total lease payments465 4,433 
Less: Imputed interest(75)(574)
Total lease obligations390 3,859 
Less: Current obligations(92)(621)
Long-term lease obligations$298 $3,238 
As of December 31, 2022, we have additional leases which have not commenced of $1.2 billion. These leases will commence between 2023 and 2024 when we are granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained.