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Leases | 12 Months Ended
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Dec. 31, 2023
Leases [Abstract] |
LEASES | 5. LEASES General We have entered into long-term leasing arrangements for the right to use various classes of underlying assets as follows: •Pipelines, Terminals, and Tanks includes facilities and equipment used in the storage, transportation, production, and sale of refinery feedstock, refined petroleum product, ethanol, and corn inventories; •Marine Transportation includes time charters for ocean-going tankers and coastal vessels; •Rail Transportation includes railcars and related storage facilities; and •Other includes machinery, equipment, and various facilities used in our refining, renewable diesel, and ethanol operations; facilities and equipment related to industrial gases and power used in our operations; land and rights-of-way associated with our refineries, plants, and pipelines and other logistics assets, as well as office facilities; and equipment primarily used at our corporate offices, such as printers and copiers. In addition to fixed lease payments, some arrangements contain provisions for variable lease payments. Certain leases for pipelines, terminals, and tanks provide for variable lease payments based on, among other things, throughput volumes in excess of a base amount. Certain marine transportation leases contain provisions for payments that are contingent on usage. Additionally, if the rental increases are not scheduled in the lease, such as an increase based on subsequent changes in the index or rate, those rents are considered variable lease payments. In all instances, variable lease payments are recognized in the period in which the obligation for those payments is incurred. Lease Costs and Other Supplemental Information Our total lease cost comprises costs that are included in our statements of income, as well as costs capitalized as part of an item of property, plant, and equipment or inventory. Total lease cost was as follows (in millions):
| Pipelines, Terminals, and Tanks |  | Transportation |  | Other |  | Total
|  | Marine |  | Rail |  |
Year ended December 31, 2023 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 213 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 30 |  |  | $ | 246 |
Interest on lease liabilities | 101 |  |  | — |  |  | 1 |  |  | 5 |  |  | 107 |
Operating lease cost | 166 |  |  | 127 |  |  | 80 |  |  | 45 |  |  | 418 |
Variable lease cost | 114 |  |  | 61 |  |  | — |  |  | 8 |  |  | 183 |
Short-term lease cost | 18 |  |  | 125 |  |  | 2 |  |  | 112 |  |  | 257 |
Sublease income | — |  |  | (29) |  |  | — |  |  | (2) |  |  | (31) |
Total lease cost | $ | 612 |  |  | $ | 284 |  |  | $ | 86 |  |  | $ | 198 |  |  | $ | 1,180 |
Year ended December 31, 2022 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 183 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 32 |  |  | $ | 218 |
Interest on lease liabilities | 78 |  |  | — |  |  | 1 |  |  | 5 |  |  | 84 |
Operating lease cost | 171 |  |  | 102 |  |  | 68 |  |  | 38 |  |  | 379 |
Variable lease cost | 79 |  |  | 50 |  |  | — |  |  | 9 |  |  | 138 |
Short-term lease cost | 15 |  |  | 82 |  |  | 3 |  |  | 57 |  |  | 157 |
Sublease income | — |  |  | (27) |  |  | — |  |  | (2) |  |  | (29) |
Total lease cost | $ | 526 |  |  | $ | 207 |  |  | $ | 75 |  |  | $ | 139 |  |  | $ | 947 |
Year ended December 31, 2021 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 137 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 28 |  |  | $ | 167 |
Interest on lease liabilities | 66 |  |  | — |  |  | 1 |  |  | 5 |  |  | 72 |
Operating lease cost | 163 |  |  | 105 |  |  | 64 |  |  | 49 |  |  | 381 |
Variable lease cost | 51 |  |  | 21 |  |  | — |  |  | 7 |  |  | 79 |
Short-term lease cost | 5 |  |  | 44 |  |  | 1 |  |  | 46 |  |  | 96 |
Sublease income | — |  |  | (4) |  |  | — |  |  | (3) |  |  | (7) |
Total lease cost | $ | 422 |  |  | $ | 166 |  |  | $ | 68 |  |  | $ | 132 |  |  | $ | 788 |
The following table presents additional information related to our operating and finance leases (in millions, except for lease terms and discount rates):
| December 31, 2023 |  | December 31, 2022
| Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Supplemental balance sheet information |  |  |  |  |  |  |
ROU assets, net reflected in the following balance sheet line items: |  |  |  |  |  |  |
Property, plant, and equipment, net | $ | — |  | $ | 2,195 |  | $ | — |  | $ | 2,278
Deferred charges and other assets, net | 1,136 |  | — |  | 1,114 |  | —
Total ROU assets, net | $ | 1,136 |  | $ | 2,195 |  | $ | 1,114 |  | $ | 2,278
Current lease liabilities reflected in the following balance sheet line items: |  |  |  |  |  |  |
Current portion of debt and finance lease obligations | $ | — |  | $ | 209 |  | $ | — |  | $ | 248
Accrued expenses | 360 |  | — |  | 311 |  | —
Noncurrent lease liabilities reflected in the following balance sheet line items: |  |  |  |  |  |  |
Debt and finance lease obligations, less current portion | — |  | 2,097 |  | — |  | 2,146
Other long-term liabilities | 753 |  | — |  | 776 |  | —
Total lease liabilities | $ | 1,113 |  | $ | 2,306 |  | $ | 1,087 |  | $ | 2,394
Other supplemental information |  |  |  |  |  |  |
Weighted-average remaining lease term | 6.9 years |  | 14.3 years |  | 7.5 years |  | 14.6 years
Weighted-average discount rate | 5.7 | % |  | 4.8 | % |  | 5.2 | % |  | 4.6 | %
Supplemental cash flow information related to our operating and finance leases is presented in Note 18. DGD Port Arthur Plant Finance Lease In connection with the construction of the DGD plant located next to our Port Arthur Refinery (the DGD Port Arthur Plant), DGD entered into an agreement with a third party to utilize certain rail facilities, truck rack facilities, and tanks for the transportation and storage of feedstocks and renewable diesel. The agreement commenced in the fourth quarter of 2022, upon completion of the DGD Port Arthur Plant, and has an initial term of 20 years with two automatic five-year renewal periods. In the fourth quarter of 2022, DGD recognized a finance lease ROU asset and related liability of approximately $500 million in connection with this agreement. Maturity Analyses As of December 31, 2023, the remaining minimum lease payments due under our long-term leases were as follows (in millions):
| Operating Leases |  | Finance Leases |  |  |  |
2024 | $ | 398 |  |  | $ | 312 |  |  |  |  |
2025 | 254 |  |  | 298 |  |  |  |  |
2026 | 195 |  |  | 274 |  |  |  |  |
2027 | 103 |  |  | 244 |  |  |  |  |
2028 | 64 |  |  | 243 |  |  |  |  |
Thereafter | 386 |  |  | 1,967 |  |  |  |  |
Total undiscounted lease payments | 1,400 |  |  | 3,338 |  |  |  |  |
Less: Amount associated with discounting | 287 |  |  | 1,032 |  |  |  |  |
Total lease liabilities | $ | 1,113 |  |  | $ | 2,306 |  |  |  |  |
LEASES | 5. LEASES General We have entered into long-term leasing arrangements for the right to use various classes of underlying assets as follows: •Pipelines, Terminals, and Tanks includes facilities and equipment used in the storage, transportation, production, and sale of refinery feedstock, refined petroleum product, ethanol, and corn inventories; •Marine Transportation includes time charters for ocean-going tankers and coastal vessels; •Rail Transportation includes railcars and related storage facilities; and •Other includes machinery, equipment, and various facilities used in our refining, renewable diesel, and ethanol operations; facilities and equipment related to industrial gases and power used in our operations; land and rights-of-way associated with our refineries, plants, and pipelines and other logistics assets, as well as office facilities; and equipment primarily used at our corporate offices, such as printers and copiers. In addition to fixed lease payments, some arrangements contain provisions for variable lease payments. Certain leases for pipelines, terminals, and tanks provide for variable lease payments based on, among other things, throughput volumes in excess of a base amount. Certain marine transportation leases contain provisions for payments that are contingent on usage. Additionally, if the rental increases are not scheduled in the lease, such as an increase based on subsequent changes in the index or rate, those rents are considered variable lease payments. In all instances, variable lease payments are recognized in the period in which the obligation for those payments is incurred. Lease Costs and Other Supplemental Information Our total lease cost comprises costs that are included in our statements of income, as well as costs capitalized as part of an item of property, plant, and equipment or inventory. Total lease cost was as follows (in millions):
| Pipelines, Terminals, and Tanks |  | Transportation |  | Other |  | Total
|  | Marine |  | Rail |  |
Year ended December 31, 2023 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 213 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 30 |  |  | $ | 246 |
Interest on lease liabilities | 101 |  |  | — |  |  | 1 |  |  | 5 |  |  | 107 |
Operating lease cost | 166 |  |  | 127 |  |  | 80 |  |  | 45 |  |  | 418 |
Variable lease cost | 114 |  |  | 61 |  |  | — |  |  | 8 |  |  | 183 |
Short-term lease cost | 18 |  |  | 125 |  |  | 2 |  |  | 112 |  |  | 257 |
Sublease income | — |  |  | (29) |  |  | — |  |  | (2) |  |  | (31) |
Total lease cost | $ | 612 |  |  | $ | 284 |  |  | $ | 86 |  |  | $ | 198 |  |  | $ | 1,180 |
Year ended December 31, 2022 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 183 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 32 |  |  | $ | 218 |
Interest on lease liabilities | 78 |  |  | — |  |  | 1 |  |  | 5 |  |  | 84 |
Operating lease cost | 171 |  |  | 102 |  |  | 68 |  |  | 38 |  |  | 379 |
Variable lease cost | 79 |  |  | 50 |  |  | — |  |  | 9 |  |  | 138 |
Short-term lease cost | 15 |  |  | 82 |  |  | 3 |  |  | 57 |  |  | 157 |
Sublease income | — |  |  | (27) |  |  | — |  |  | (2) |  |  | (29) |
Total lease cost | $ | 526 |  |  | $ | 207 |  |  | $ | 75 |  |  | $ | 139 |  |  | $ | 947 |
Year ended December 31, 2021 |  |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |  |
Amortization of ROU assets | $ | 137 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 28 |  |  | $ | 167 |
Interest on lease liabilities | 66 |  |  | — |  |  | 1 |  |  | 5 |  |  | 72 |
Operating lease cost | 163 |  |  | 105 |  |  | 64 |  |  | 49 |  |  | 381 |
Variable lease cost | 51 |  |  | 21 |  |  | — |  |  | 7 |  |  | 79 |
Short-term lease cost | 5 |  |  | 44 |  |  | 1 |  |  | 46 |  |  | 96 |
Sublease income | — |  |  | (4) |  |  | — |  |  | (3) |  |  | (7) |
Total lease cost | $ | 422 |  |  | $ | 166 |  |  | $ | 68 |  |  | $ | 132 |  |  | $ | 788 |
The following table presents additional information related to our operating and finance leases (in millions, except for lease terms and discount rates):
| December 31, 2023 |  | December 31, 2022
| Operating Leases |  | Finance Leases |  | Operating Leases |  | Finance Leases
Supplemental balance sheet information |  |  |  |  |  |  |
ROU assets, net reflected in the following balance sheet line items: |  |  |  |  |  |  |
Property, plant, and equipment, net | $ | — |  | $ | 2,195 |  | $ | — |  | $ | 2,278
Deferred charges and other assets, net | 1,136 |  | — |  | 1,114 |  | —
Total ROU assets, net | $ | 1,136 |  | $ | 2,195 |  | $ | 1,114 |  | $ | 2,278
Current lease liabilities reflected in the following balance sheet line items: |  |  |  |  |  |  |
Current portion of debt and finance lease obligations | $ | — |  | $ | 209 |  | $ | — |  | $ | 248
Accrued expenses | 360 |  | — |  | 311 |  | —
Noncurrent lease liabilities reflected in the following balance sheet line items: |  |  |  |  |  |  |
Debt and finance lease obligations, less current portion | — |  | 2,097 |  | — |  | 2,146
Other long-term liabilities | 753 |  | — |  | 776 |  | —
Total lease liabilities | $ | 1,113 |  | $ | 2,306 |  | $ | 1,087 |  | $ | 2,394
Other supplemental information |  |  |  |  |  |  |
Weighted-average remaining lease term | 6.9 years |  | 14.3 years |  | 7.5 years |  | 14.6 years
Weighted-average discount rate | 5.7 | % |  | 4.8 | % |  | 5.2 | % |  | 4.6 | %
Supplemental cash flow information related to our operating and finance leases is presented in Note 18. DGD Port Arthur Plant Finance Lease In connection with the construction of the DGD plant located next to our Port Arthur Refinery (the DGD Port Arthur Plant), DGD entered into an agreement with a third party to utilize certain rail facilities, truck rack facilities, and tanks for the transportation and storage of feedstocks and renewable diesel. The agreement commenced in the fourth quarter of 2022, upon completion of the DGD Port Arthur Plant, and has an initial term of 20 years with two automatic five-year renewal periods. In the fourth quarter of 2022, DGD recognized a finance lease ROU asset and related liability of approximately $500 million in connection with this agreement. Maturity Analyses As of December 31, 2023, the remaining minimum lease payments due under our long-term leases were as follows (in millions):
| Operating Leases |  | Finance Leases |  |  |  |
2024 | $ | 398 |  |  | $ | 312 |  |  |  |  |
2025 | 254 |  |  | 298 |  |  |  |  |
2026 | 195 |  |  | 274 |  |  |  |  |
2027 | 103 |  |  | 244 |  |  |  |  |
2028 | 64 |  |  | 243 |  |  |  |  |
Thereafter | 386 |  |  | 1,967 |  |  |  |  |
Total undiscounted lease payments | 1,400 |  |  | 3,338 |  |  |  |  |
Less: Amount associated with discounting | 287 |  |  | 1,032 |  |  |  |  |
Total lease liabilities | $ | 1,113 |  |  | $ | 2,306 |  |  |  |  |

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