XML 26 R13.htm IDEA: XBRL DOCUMENT

Leases

12 Months Ended

Dec. 31, 2022

4. 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 income statement, 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, 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

Year ended December 31, 2020
Finance lease cost:
Amortization of ROU assets	$	109	$	—	$	2	$	17	$	128
Interest on lease liabilities	92		—		—		6		98
Operating lease cost	165		156		61		52		434
Variable lease cost	53		40		1		5		99
Short-term lease cost	9		45		—		37		91
Sublease income	—		(10)		—		(2)		(12)
Total lease cost	$	428	$	231	$	64	$	115	$	838

The following table presents additional information related to our operating and finance leases (in millions, except for lease terms and discount rates):


	December 31, 2022						December 31, 2021
	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	$	—		$	2,278		$	—		$	1,846
Deferred charges and other assets, net	1,114			—			1,284			—
Total ROU assets, net	$	1,114		$	2,278		$	1,284		$	1,846

Current lease liabilities reflected in the following balance sheet line items:
Current portion of debt and finance lease obligations	$	—		$	248		$	—		$	154
Accrued expenses	311			—			315			—
Noncurrent lease liabilities reflected in the following balance sheet line items:
Debt and finance lease obligations, less current portion	—			2,146			—			1,766
Other long-term liabilities	776			—			940			—
Total lease liabilities	$	1,087		$	2,394		$	1,255		$	1,920

Other supplemental information
Weighted-average remaining lease term	7.5 years			14.6 years			7.1 years			14.3 years
Weighted-average discount rate	5.2		%	4.6		%	4.2		%	4.0		%

Supplemental cash flow information related to our operating and finance leases is presented in Note 17.

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, 2022, the remaining minimum lease payments due under our long-term leases were as follows (in millions):


	Operating Leases		Finance Leases

2023	$	345	$	350
2024	240		287
2025	163		278
2026	125		254
2027	81		224
Thereafter	434		2,069
Total undiscounted lease payments	1,388		3,462
Less: Amount associated with discounting	301		1,068
Total lease liabilities	$	1,087	$	2,394

LEASES