Leases

12 Months Ended

Dec. 31, 2022

LEASES

Our leased assets consist primarily of LNG vessel time charters (“vessel charters”) and additionally include tug vessels, office space and facilities and land sites. All of our leases are classified as operating leases except for certain of our vessel charters and tug vessels, which are classified as finance leases.

The following table shows the classification and location of our right-of-use assets and lease liabilities on our Consolidated Balance Sheets (in millions):


		December 31,

	Consolidated Balance Sheets Location	2022		2021
Right-of-use assets—Operating	Operating lease assets	$	2,625	$	2,102
Right-of-use assets—Financing	Property, plant and equipment, net of accumulated depreciation	511		50
Total right-of-use assets		$	3,136	$	2,152

Current operating lease liabilities	Current operating lease liabilities	$	616	$	535
Current finance lease liabilities	Other current liabilities	28		2
Non-current operating lease liabilities	Operating lease liabilities	1,971		1,541
Non-current finance lease liabilities	Finance lease liabilities	494		57
Total lease liabilities		$	3,109	$	2,135

The following table shows the classification and location of our lease costs on our Consolidated Statements of Operations (in millions):


	Consolidated Statements of Operations Location	Year Ended December 31,
			2022		2021		2020
Operating lease cost (a)	Operating costs and expenses (1)		$	828	$	621	$	432
Finance lease cost:
Amortization of right-of-use assets	Depreciation and amortization expense		12		3		2
Interest on lease liabilities	Interest expense, net of capitalized interest		14		9		7

Total lease cost			$	854	$	633	$	441

(a) Included in operating lease cost:
Short-term lease costs			$	122	$	139	$	93
Variable lease costs			18		21		16

(1)Presented in cost of sales, operating and maintenance expense or selling, general and administrative expense consistent with the nature of the asset under lease.

Future annual minimum lease payments for operating and finance leases as of December 31, 2022 are as follows (in millions):


Years Ending December 31,	Operating Leases		Finance Leases
2023	$	690	$	63
2024	644		66
2025	505		71
2026	372		75
2027	275		77
Thereafter	492		427
Total lease payments (1)	2,978		779
Less: Interest	(391)		(257)
Present value of lease liabilities	$	2,587	$	522

(1)Does not include approximately $3.3 billion of legally binding minimum payments primarily for vessel charters contracted for as of December 31, 2022, which will commence in future periods with fixed minimum lease terms of up to 15 years.

The following table shows the weighted-average remaining lease term and the weighted-average discount rate for our operating leases and finance leases:


	December 31, 2022		December 31, 2021
	Operating Leases	Finance Leases	Operating Leases	Finance Leases
Weighted-average remaining lease term (in years)	5.9	10.6	5.6	16.7
Weighted-average discount rate (1)	4.2%	7.8%	3.6%	16.2%

(1)The weighted average discount rate is impacted by certain finance leases that commenced prior to the adoption of the current leasing standard under GAAP. In accordance with previous accounting guidance, the implied rate is based on the fair value of the underlying assets.

The following table includes other quantitative information for our operating and finance leases (in millions):


	Year Ended December 31,
	2022		2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	713	$	483	$	309
Operating cash flows from finance leases	14		10		10

Right-of-use assets obtained in exchange for operating lease liabilities	1,220		1,736		615
Right-of-use assets obtained in exchange for finance lease liabilities (1)	473		—		—

(1)Includes $88 million reclassified from operating leases to finance leases during the year ended December 31, 2022, as a result of modifications of the underlying vessel charters.

LNG Vessel Subcharters

From time to time, we sublease certain LNG vessels under charter to third parties while retaining our existing obligation to the original lessor. The following table shows the sublease income recognized in other revenues on our Consolidated Statements of Operations (in millions):


	Year Ended December 31,
		2022		2021		2020
Fixed income		$	371	$	72	$	68
Variable income		79		37		27
Total sublease income		$	450	$	109	$	95

Future annual minimum sublease payments to be received from LNG vessel subcharters as of December 31, 2022 are as follows (in millions):


Years Ending December 31,	LNG Vessel Subcharters
2023	$	165
2024	18
2025	—
2026	—
2027	—
Thereafter	—
Total lease payments	183