Leases

12 Months Ended

Dec. 31, 2022

We have operating leases for certain property and equipment under various noncancelable agreements, the most significant of which are rail car leases and barge tow charters for the distribution of our products. The rail car leases currently have minimum terms ranging from one to eleven years and the barge tow charter commitments range from one to six years. Our rail car leases and barge tow charters commonly contain provisions for automatic renewal that can extend the lease term unless cancelled by either party. We also have operating leases for terminal and warehouse storage for our distribution system, some of which contain minimum throughput requirements. The storage agreements contain minimum terms generally ranging from one to five years and commonly contain provisions for automatic renewal thereafter unless cancelled by either party. The renewal provisions for our rail car leases, barge tow charters and terminal and warehouse storage agreements are not reasonably certain to be exercised.

The components of lease costs were as follows:


	Year ended December 31,
	2022		2021		2020
	(in millions)
Operating lease cost	$	103	$	102	$	107



Short-term lease cost	48		25		17
Variable lease cost	6		7		6

Total lease cost	$	157	$	134	$	130

Supplemental cash flow information related to leases was as follows:


	Year ended December 31,
	2022		2021		2020
	(in millions)

Operating cash flows - cash paid for amounts included in the measurement of operating lease liabilities	$	100	$	97	$	105




Right-of-use (ROU) assets obtained in exchange for operating lease obligations	106		80		80

Supplemental balance sheet information related to leases was as follows:


	December 31,
	2022		2021
	(in millions)

Operating lease ROU assets	$	254	$	243

Current operating lease liabilities	$	93	$	89
Operating lease liabilities	167		162
Total operating lease liabilities	$	260	$	251


	December 31,
	2022		2021
Operating leases
Weighted-average remaining lease term	4 years		4 years
Weighted-average discount rate(1)	3.9	%	3.8	%

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(1)Upon adoption of the new lease accounting standard, discount rates used for existing leases were established at January 1, 2019.

As of December 31, 2022, we have entered into two additional leases that have not yet commenced. These leases will commence in fiscal year 2023 with future minimum lease payments of $11 million and lease terms of three and five years.

The following table reconciles the undiscounted cash flows for our operating leases to the operating lease liabilities recorded on our consolidated balance sheet as of December 31, 2022.


	Operating lease payments
	(in millions)
2023	$	95
2024	73
2025	47
2026	35
2027	19
Thereafter	11
Total lease payments	280
Less: imputed interest	(20)

Present value of lease liabilities	260
Less: Current operating lease liabilities	(93)
Operating lease liabilities	$	167