Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Our leased assets consist primarily of tug vessels and land sites, all of which are classified as operating 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 2021 2020
Right-of-use assets—Operating Operating lease assets $ 98  $ 99 
Current operating lease liabilities Current operating lease liabilities
Non-current operating lease liabilities Operating lease liabilities 89  90 

The following table shows the classification and location of our lease costs on our Consolidated Statements of Income (in millions):
Year Ended December 31,
Consolidated Statements of Income Location
2021 2020 2019
Operating lease cost (1) Operating costs and expenses (2) $ 12  $ 12  $ 11 
(1)Includes $1 million of variable lease costs paid to the lessor during each of the years ended December 31, 2021, 2020 and 2019, respectively.
(2)Presented in cost of sales, operating and maintenance expense, general and administrative expense or general and administrative expense—affiliate consistent with the nature of the asset under lease.
Future annual minimum lease payments for operating leases as of December 31, 2021 are as follows (in millions): 
Years Ending December 31, Operating Leases (1)
2022 $ 11 
2023 12 
2024 12 
2025 12 
2026 12 
Thereafter 106 
Total lease payments 165 
Less: Interest (68)
Present value of lease liabilities $ 97 
(1)Does not include $26 million of legally binding minimum lease payments primarily for tugboats which were executed as of December 31, 2021 but will commence in future periods primarily in the next year and have fixed minimum lease terms of up to six years.

The following table shows the weighted-average remaining lease term and the weighted-average discount rate for our operating leases:
December 31,
2021 2020
Weighted-average remaining lease term (in years) 23.4 24.5
Weighted-average discount rate 3.6  % 4.1  %

The following table includes other quantitative information for our operating leases (in millions):
Year Ended December 31,
2021 2020 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 11  $ 11  $ 10 
Leased assets obtained in exchange for new operating lease liabilities 11 5