Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

10.  Leases

All Segments and Holding Company

We have operating and finance leases primarily within our Automotive, Energy and Food Packaging segments. Our Automotive segment leases assets, primarily real estate (operating) and vehicles (financing). Our Energy segment leases certain pipelines, storage tanks, railcars, office space, land and equipment (operating and financing). Our Food Packaging segment leases assets, primarily real estate, equipment and vehicles (primarily operating). Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Right-of-use assets and related liabilities are recorded on the balance sheet for leases with an initial lease term in excess of twelve months and therefore, do not include any lease arrangements with initial lease terms of twelve months or less.

Right-of-use assets and lease liabilities are as follows:

	March 31,		December 31,
	2023		2022
	(in millions)
Operating Leases:
Right-of-use assets (other assets)	$	514	$	478
Lease liabilities (accrued expenses and other liabilities)		523		484
Financing Leases:
Right-of-use assets (property, plant and equipment, net)		46		48
Lease liabilities (debt)		63		64

Additional information with respect to our operating leases as of March 31, 2023 and December 31, 2022 is presented below. The lease terms and discount rates for our Energy, Automotive and Food Packaging segments represent weighted averages based on their respective lease liability balances.

	Right-Of-Use		Lease			Discount
Operating Leases as of March 31, 2023	Assets		Liabilities		Lease Term	Rate
	(in millions)
Energy	$	41	$	41	4.0 years	5.4%
Automotive		421		434	5.4 years	5.9%
Food Packaging		24		27	10 years	7.4%
Other segments and Holding Company		28		21
	$	514	$	523

	Right-Of-Use		Lease			Discount
Operating Leases as of December 31, 2022	Assets		Liabilities		Lease Term	Rate
	(in millions)
Energy	$	40	$	40	4.1 years	5.2%
Automotive		386		395	4.7 years	5.9%
Food Packaging		24		27	9.8 years	7.4%
Other segments and Holding Company		28		22
	$	478	$	484

For the three months ended March 31, 2023 and 2022, lease cost was comprised of (i) operating lease cost of $41 million and $47 million, respectively, (ii) amortization of financing lease right-of-use assets of $1 million and $3 million, respectively, and (iii) interest expense on financing lease liabilities of $1 million and $1 million, respectively.

Our automotive segment accounted for $33 million and $40 million of total lease cost for the three months ended March 31, 2023 and 2022, respectively.

Automotive

Our Automotive segment leases certain operating locations under long-term operating leases. Our Automotive segment’s revenues from operating leases were $16 million and $9 million for the three months ended March 31, 2023 and 2022, respectively. Revenues from operating leases are included in other revenue from operations in the condensed consolidated statements of operations.

Real Estate

Our Real Estate segment leases real estate, primarily commercial properties under long-term operating leases. As of March 31, 2023 and December 31, 2022, our Real Estate segment had assets leased to others included in property, plant and equipment of $284 million and $252 million, respectively, net of accumulated depreciation. Our Real Estate segment’s revenue from operating leases were $5 million and $2 million for the three months ended March 31, 2023 and 2022, respectively. Revenues from operating leases are included in other revenue from operations in the condensed consolidated statements of operations.