| LEASES Our leased assets consist primarily of tug vessels and land sites. All of our leases are classified as operating leases except for certain of our 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 |
|
2023 |
|
2022 |
| Right-of-use assets—Operating |
Operating lease assets |
|
$ |
81 |
|
|
$ |
89 |
|
| Right-of-use assets—Financing |
Property, plant and equipment, net of accumulated depreciation |
|
17 |
|
|
21 |
|
| Total right-of-use assets |
|
|
$ |
98 |
|
|
$ |
110 |
|
|
|
|
|
|
|
| Current operating lease liabilities |
Other current liabilities |
|
10 |
|
|
10 |
|
| Current finance lease liabilities |
Other current liabilities |
|
4 |
|
|
4 |
|
| Non-current operating lease liabilities |
Operating lease liabilities |
|
71 |
|
|
80 |
|
| Non-current finance lease liabilities |
Finance lease liabilities |
|
14 |
|
|
18 |
|
| Total lease liabilities |
|
|
$ |
99 |
|
|
112 |
|
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 |
|
|
|
|
|
2023 |
|
2022 |
|
2021 |
| Operating lease cost (1) |
Operating costs and expenses (2) |
|
|
|
|
|
$ |
13 |
|
|
$ |
13 |
|
|
$ |
12 |
|
| Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
| Amortization of right-of-use assets |
Depreciation and amortization expense |
|
|
|
|
|
4 |
|
|
2 |
|
|
— |
|
| Interest on lease liabilities |
Interest expense, net of capitalized interest |
|
|
|
|
|
1 |
|
|
— |
|
|
— |
|
| Total lease cost |
|
|
|
|
|
|
$ |
18 |
|
|
$ |
15 |
|
|
$ |
12 |
|
(1)Includes $1 million of variable lease costs incurred during each of the years ended December 31, 2023, 2022 and 2021, 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 and finance leases as of December 31, 2023 are as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
| Years Ending December 31, |
Operating Leases |
|
Finance Leases |
| 2024 |
$ |
12 |
|
|
$ |
5 |
|
| 2025 |
12 |
|
|
5 |
|
| 2026 |
12 |
|
|
5 |
|
| 2027 |
12 |
|
|
5 |
|
| 2028 |
3 |
|
|
— |
|
| Thereafter |
92 |
|
|
— |
|
| Total lease payments |
143 |
|
|
20 |
|
| Less: Interest |
(62) |
|
|
(2) |
|
| Present value of lease liabilities |
$ |
81 |
|
|
$ |
18 |
|
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, 2023 |
|
December 31, 2022 |
|
|
|
|
|
|
|
|
|
Operating Leases |
|
Finance Leases |
|
Operating Leases |
|
Finance Leases |
| Weighted-average remaining lease term (in years) |
24.6 |
|
4.1 |
|
23.8 |
|
5.1 |
| Weighted-average discount rate |
3.9 |
% |
|
4.8 |
% |
|
3.8 |
% |
|
4.8 |
% |
The following table includes other quantitative information for our operating and finance leases (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2023 |
|
2022 |
|
2021 |
| Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
| Operating cash flows from operating leases |
12 |
|
|
10 |
|
|
11 |
|
|
|
|
|
|
|
| Right-of-use assets obtained in exchange for operating lease liabilities |
1 |
|
|
— |
|
|
7 |
|
| Right-of-use assets obtained in exchange for finance lease liabilities |
— |
|
|
23 |
|
|
— |
|
|