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Leases | 12 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
Leases | Leases We have leases primarily for facilities, vehicles, and equipment. The amounts recorded on the Consolidated Balance Sheets as of December 31, 2024 and 2023 related to our lease agreements are as follows (in millions):
|  |  |  | December 31,
Leases |  | Classification |  | 2024 |  | 2023
Assets |  |  |  |  |  |
Operating lease ROU assets, net |  | Operating lease assets, net |  | $ | 1,388 |  |  | $ | 1,336 |
Finance lease assets, net |  | Property, plant and equipment, net |  | 96 |  |  | 80 |
Total leased assets |  |  |  | $ | 1,484 |  |  | $ | 1,416 |
Liabilities |  |  |  |  |  |
Current |  |  |  |  |  |
Operating |  | Current portion of operating lease liabilities |  | $ | 237 |  |  | $ | 224 |
Finance |  | Current portion of long-term obligations |  | 28 |  |  | 26 |
Noncurrent |  |  |  |  |  |
Operating |  | Long-term operating lease liabilities, excluding current portion |  | 1,207 |  |  | 1,163 |
Finance |  | Long-term obligations, excluding current portion |  | 72 |  |  | 57 |
Total lease liabilities |  |  |  | $ | 1,544 |  |  | $ | 1,470 |
The components of lease expense are as follows (in millions):
|  | Year Ended December 31,
Lease Cost |  | 2024 |  | 2023 |  | 2022
Operating lease cost |  | $ | 350 |  |  | $ | 305 |  |  | $ | 282 |
Short-term lease cost |  | 19 |  |  | 20 |  |  | 16 |
Variable lease cost |  | 135 |  |  | 113 |  |  | 96 |
Finance lease cost |  |  |  |  |  |
Amortization of leased assets |  | 25 |  |  | 19 |  |  | 12 |
Interest on lease liabilities |  | 5 |  |  | 4 |  |  | 2 |
Sublease income |  | (5) |  |  | (6) |  |  | (5) |
Net lease cost |  | $ | 529 |  |  | $ | 455 |  |  | $ | 403 |
The future lease commitments under our leases at December 31, 2024 are as follows (in millions):
Years Ending December 31, | Operating leases |  | Finance leases (1) |  | Total
2025 | $ | 333 |  |  | $ | 33 |  |  | $ | 366 |
2026 | 298 |  |  | 27 |  |  | 325 |
2027 | 253 |  |  | 19 |  |  | 272 |
2028 | 207 |  |  | 12 |  |  | 219 |
2029 | 160 |  |  | 6 |  |  | 166 |
Thereafter | 587 |  |  | 27 |  |  | 614 |
Future lease payments | 1,838 |  |  | 124 |  |  | 1,962 |
Less: Interest | 394 |  |  | 24 |  |  | 418 |
Present value of lease liabilities | $ | 1,444 |  |  | $ | 100 |  |  | $ | 1,544 |
(1) Amounts are included in the scheduled maturities of long-term obligations in Note 18, "Long-Term Obligations". As of December 31, 2024, operating lease payments for leases that have not yet commence d totaled $41 million, which primarily includes the synthetic lease arrangements discussed below. These operating leases will commence in the n ext 21 months with lease te rms of 3 to 15 years. Most of these leases have not commenced because the assets are in the process of being constructed. Synthetic Lease Arrangements In the fourth quarter of 2024, we entered into two synthetic leases to finance the construction of salvage yard facilities, with an aggregate estimated cost of approximately $100 million. These leases have an aggregate future lease commitment of approximately $35 million as of December 31, 2024. The leases will commence upon completion of construction of the facilities which are expected to be in the later part of 2026. Each lease term is five years after commencement. At the end of the leases' terms, we will be required to purchase the facilities or, in the event that option is not elected, to request to extend the leases, or vacate the property and relocate. Upon each lease commencement, the lease classification, right-of-use asset, and lease liability will be determined and recorded. Each lease arrangement contains a residual value guarantee of 100% of the total construction cost. The synthetic leases contain covenants that are consistent with our Senior Unsecured Credit Agreement. See Note 18, "Long-Term Obligations" for further information on our Senior Unsecured Credit Agreement. Other information related to leases is as follows:
|  | December 31,
Lease Term and Discount Rate |  | 2024 |  | 2023
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 7.7 |  | 8.2
Finance leases |  | 7.2 |  | 6.7
Weighted-average discount rate |  |  |  |
Operating leases |  | 5.92 | % |  | 6.00 | %
Finance leases |  | 5.06 | % |  | 4.83 | %
|  | Year Ended December 31,
Supplemental cash flows information (in millions) |  | 2024 |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |
Operating cash outflows from operating leases |  | $ | 328 |  |  | $ | 299 |  |  | $ | 284 |
Financing cash outflows from finance leases |  | 28 |  |  | 19 |  |  | 14 |
Leased assets obtained in exchange for finance lease liabilities |  | 49 |  |  | 49 |  |  | 15 |
Leased assets obtained in exchange for operating lease liabilities |  | 384 |  |  | 310 |  |  | 159 |

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