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Leases | 12 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
Leases | Leases We are committed under long-term lease agreements for equipment, lines of road, and other property. We combine lease and non-lease components for new and reassessed leases. Some of these agreements are variable lease agreements that include usage-based payments. These agreements contain payment provisions that depend on an index or rate, initially measured using the index or rate at the lease commencement date, and are therefore not included in our future minimum lease payments. Our long-term lease agreements do not contain any material restrictive covenants. Our equipment leases have remaining terms of less than 1 year to 7 years and our lines of road and land leases have remaining terms of less than 1 year to 133 years. Some of these leases include options to extend the leases for up to 99 years and some include options to terminate the leases within 30 days. Because we are not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and associated payments are excluded from future minimum lease payments. Leases with an initial term of twelve months or less are not recorded on the balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease amounts included on the Consolidated Balance Sheets are as follows:
|  | December 31,
|  | 2024 |  | 2023
|  | ($ in millions)
| Classification |  |  |
Assets |  |  |  |
Right-of-use (ROU) assets | Other assets | $ | 271 |  |  | $ | 390 |
Liabilities |  |  |  |
Current lease liabilities | Other current liabilities | $ | 81 |  |  | $ | 105 |
Non-current lease liabilities | Other liabilities | 191 |  |  | 287 |
Total lease liabilities |  | $ | 272 |  |  | $ | 392 |
The components of total lease expense, primarily included in “Purchased services and rents,” are as follows:
| 2024 |  | 2023 |  | 2022
| ($ in millions)
Operating lease expense | $ | 102 |  |  | $ | 115 |  |  | $ | 101 |
Variable lease expense | 84 |  |  | 84 |  |  | 55 |
Short-term lease expense | 10 |  |  | 15 |  |  | 18 |
Total lease expense | $ | 196 |  |  | $ | 214 |  |  | $ | 174 |
In March 2019, we entered into a non-cancellable lease for an office building. In 2021, the construction of the office building was completed, and the lease commenced. The initial lease term is five years with options to renew, purchase, or sell the office building at the end of the lease term. The lease contains a residual value guarantee of up to eighty-three percent of the total construction cost of $499 million. Other information related to operating leases is as follows:
| December 31,
| 2024 |  | 2023
Weighted-average remaining lease term (years) on operating leases | 6.64 |  | 6.12
Weighted-average discount rates on operating leases | 3.96 | % |  | 3.78 | %
As the rates implicit in most of our leases are not readily determinable, we use a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments. We use the portfolio approach and group leases into short-, medium-, and long-term categories, applying the corresponding incremental borrowing rates to these categories. During 2024 and 2023, respectively, ROU assets obtained in exchange for new operating lease liabilities were $21 million and $65 million, respectively. Cash paid for amounts included in the measurement of lease liabilities was $102 million and $117 million in 2024 and 2023, respectively, and is included in operating cash flows. Future minimum lease payments under non-cancellable operating leases are as follows:
| December 31, 2024
| ($ in millions)
2025 | $ | 89 |
2026 | 69 |
2027 | 47 |
2028 | 35 |
2029 | 27 |
2030 and subsequent years | 47 |
Total lease payments | 314 |
Less: Interest | 42 |
Present value of lease liabilities | $ | 272 |
| December 31, 2023
| ($ in millions)
2024 | $ | 116 |
2025 | 105 |
2026 | 85 |
2027 | 42 |
2028 | 30 |
2029 and subsequent years | 66 |
Total lease payments | 444 |
Less: Interest | 52 |
Present value of lease liabilities | $ | 392 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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