Quarterly report pursuant to Section 13 or 15(d)

Leases

v3.24.3
Leases
 9 Months Ended
Sep. 30, 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, land sites and equipment. All of our leases where we are the lessee are classified as operating leases except for certain of our vessel charters, tug vessels and equipment, which are classified as finance leases.

Future annual minimum lease payments for operating and finance leases as of September 30, 2024 are as follows (in millions): 
Years Ending December 31, Operating Leases Finance Leases
2024 $ 330  $ 18 
2025 1,095  77 
2026 700  80 
2027 489  82 
2028 321  84 
Thereafter 1,131  406 
Total lease payments (1) 4,066  747 
Less: Interest (1,211) (209)
Present value of lease liabilities $ 2,855  $ 538 
(1)Does not include approximately $3.3 billion of legally binding minimum payments for leases executed as of September 30, 2024 that will commence in future periods, consisting primarily 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:
September 30, 2024 December 31, 2023
Operating Leases Finance Leases Operating Leases Finance Leases
Weighted-average remaining lease term (in years) 7.0 9.1 6.3 9.7
Weighted-average discount rate (1) 5.0% 7.5% 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):
Nine Months Ended September 30,
2024 2023
Right-of-use assets obtained in exchange for operating lease liabilities (1) $ 718  $ 388 
Right-of-use assets obtained in exchange for finance lease liabilities (2) 59  8 
(1)Net of $33 million reclassified from operating leases to finance leases during the nine months ended September 30, 2024, as a result of modifications of the underlying tug vessel leases.
(2)Net of $15 million reclassified from finance leases to operating leases during the nine months ended September 30, 2024, as a result of modifications of the underlying tug vessel leases.

LNG Vessel Subleases

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 September 30, Nine Months Ended September 30,
2024 2023 2024 2023
Fixed income $ 72  $ 96  $ 238  $ 327 
Variable income 11  5  28  41 
Total sublease income $ 83  $ 101  $ 266  $ 368 

Future annual minimum sublease payments to be received from LNG vessel subleases as of September 30, 2024 are as follows (in millions): 
Years Ending December 31, Sublease Payments
2024 $ 30 
2025 12 
Total sublease payments $ 42