Leases

12 Months Ended

Dec. 31, 2022

Leases

Lessee Accounting

The Company leases certain transportation equipment, plant equipment, office equipment, land, buildings, and storage facilities. Most leases include options to renew, with renewal terms that can extend the lease term from 6 months to 49 years. The renewal options are not included in the measurement of the right of use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Certain leases also include index and non-index escalation clauses and options to purchase the leased property. Leases accounted for as finance leases were immaterial at December 31, 2022.

As an accounting policy election, the Company does not apply the recognition requirements of Topic 842 to short-term leases in all of its underlying asset categories. The Company recognizes short-term lease payments in earnings on a straight-line basis over the lease term, and variable lease payments in the period in which the obligation for those payments is incurred. The Company also combines lease and non-lease contract components in all of its underlying asset categories as an accounting policy election.

The following table sets forth the amounts relating to the Company’s total lease cost and other information.


	Year Ended December 31
	2022		2021			2020
	(In millions)
Lease cost:
Operating lease cost	$	356	$	336		$	315
Short-term lease cost	127		117			101
Total lease cost	$	483	$	453		$	416

Other information:
Operating lease liability principal payments	$	339	$	325		$	302
Right-of-use assets obtained in exchange for new operating lease liabilities	$	357	$	197		$	314

			December 31
			2022			2021
Weighted-average remaining lease term - operating leases (in years)			7			6
Weighted average discount rate - operating leases			3.7		%	3.8		%

Below is a tabular disclosure of the future annual undiscounted cash flows for operating lease liabilities as of December 31, 2022.


	Undiscounted
	Cash Flows
	(In millions)
2023	$	325
2024	259
2025	186
2026	124
2027	94
Thereafter	268
Total	1,256

Less interest (1)	(148)
Lease liability	$	1,108

(1) Calculated using the implicit rate of the lease, if available, or the incremental borrowing rate that is appropriate for the tenor and geography of the lease.