Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
 3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Leases LEASES
We are the lessee of LNG vessels leased under time charters (“vessel charters”) as well as tug vessels, office space and facilities and land sites. All of our leases where we are the lessee are classified as operating leases except for certain of our vessel charters, tug vessels and marine equipment, 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):
March 31, December 31,
Consolidated Balance Sheets Location 2024 2023
Right-of-use assets—Operating Operating lease assets $ 2,924  $ 2,641 
Right-of-use assets—Financing Property, plant and equipment, net of accumulated depreciation 456  469 
Total right-of-use assets $ 3,380  $ 3,110 
Current operating lease liabilities Current operating lease liabilities $ 678  $ 655 
Current finance lease liabilities Other current liabilities 39  35 
Non-current operating lease liabilities Operating lease liabilities 2,247  1,971 
Non-current finance lease liabilities Finance lease liabilities 458  467 
Total lease liabilities $ 3,422  $ 3,128 

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
 Three Months Ended March 31,
2024 2023
Operating lease cost (a) Operating costs and expenses (1) $ 201  $ 213 
Finance lease cost:
Amortization of right-of-use assets Depreciation and amortization expense 13  13 
Interest on lease liabilities Interest expense, net of capitalized interest 9  9 
Total lease cost $ 223  $ 235 
(a) Included in operating lease cost:
Short-term lease costs $ 4  $ 23 
Variable lease costs 1  12 
(1)Presented in the appropriate line item within operating costs and expenses, consistent with the nature of the asset under lease.
Future annual minimum lease payments for operating and finance leases as of March 31, 2024 are as follows (in millions): 
Years Ending December 31, Operating Leases Finance Leases
2024 $ 624  $ 52 
2025 671  72 
2026 538  75 
2027 441  77 
2028 287  73 
Thereafter 932  355 
Total lease payments (1) 3,493  704 
Less: Interest (568) (207)
Present value of lease liabilities $ 2,925  $ 497 
(1)Does not include approximately $3.2 billion of legally binding minimum payments for leases executed as of March 31, 2024 that will commence in future periods, consisting entirely of vessel charters, 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:
March 31, 2024 December 31, 2023
Operating Leases Finance Leases Operating Leases Finance Leases
Weighted-average remaining lease term (in years) 6.3 9.5 6.3 9.7
Weighted-average discount rate (1) 4.8% 7.7% 4.7% 7.7%
(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):
Three Months Ended March 31,
2024 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 181  $ 181 
Operating cash flows from finance leases 8  8 
Financing cash flows from finance leases 7  — 
Right-of-use assets obtained in exchange for operating lease liabilities 446  90 

LNG Vessel Subcharters

We sublease certain LNG vessels under charter to third parties while retaining our existing obligation to the original lessor. All of our sublease arrangements have been assessed as operating leases. The following table shows the sublease income recognized in other revenues on our Consolidated Statements of Operations (in millions):
Three Months Ended March 31,
2024 2023
Fixed income $ 98  $ 134 
Variable income 7  23 
Total sublease income $ 105  $ 157 
Future annual minimum sublease payments to be received from LNG vessel subcharters as of March 31, 2024 are as follows (in millions): 
Years Ending December 31, Sublease Payments
2024 $ 130 
2025 13 
Total sublease payments $ 143