Leases
Operating leases consist primarily of leased land, LNG tankers, and office space and facilities. Finance leases consist primarily of leased marine vessels and a bridge.
During the year ended December 31, 2025, the Company determined that it was reasonably certain to exercise certain options to renew various land leases thereby extending the remaining lease terms. This was recognized as a lease modification and resulted in an increase in right-of-use assets in exchange for operating lease liabilities of $88 million.
The following table presents the line item classification of right-of-use assets and lease liabilities on the consolidated balance sheets:
| | | | | | | | | | | | | | | | | |
| | | December 31, |
| Line item | | 2025 | | 2024 |
| | | | | |
| Right-of-use assets—operating | Right-of-use assets | | $ | 737 | | | $ | 602 | |
| Right-of-use assets—finance | Property, plant and equipment, net | | 286 | | | 279 | |
| Total right-of-use assets | | | $ | 1,023 | | | $ | 881 | |
| | | | | |
| Current operating lease liabilities | Accrued and other liabilities | | $ | 62 | | | $ | 81 | |
| Current finance lease liabilities | Accrued and other liabilities | | 9 | | | 10 | |
| Noncurrent operating lease liabilities | Noncurrent operating lease liabilities | | 696 | | | 536 | |
| Noncurrent finance lease liabilities | Other noncurrent liabilities | | 249 | | | 248 | |
| Total lease liabilities | | | $ | 1,016 | | | $ | 875 | |
The Company's lease costs are presented in various line items consistent with the underlying nature of the lease. The following table presents the components of total lease costs included in the consolidated statements of operations.
| | | | | | | | | | | | | | | | | | | | | | |
| | | | Years ended December 31, |
| | | | | | 2025 | | 2024 | | 2023 |
| | | | | | | | | | |
| Operating lease cost | | | | | | $ | 133 | | | $ | 97 | | | $ | 49 | |
| Finance lease cost | | | | | | 36 | | | 29 | | | 17 | |
| Total lease cost | | | | | | $ | 169 | | | $ | 126 | | | $ | 66 | |
Future annual minimum lease payments for operating and finance leases as of December 31, 2025 are as follows:
| | | | | | | | | | | | | | |
| Years ended December 31, | | Operating leases | | Finance leases |
| | | | |
| 2026 | | $ | 106 | | | $ | 30 | |
| 2027 | | 76 | | | 27 | |
| 2028 | | 55 | | | 26 | |
| 2029 | | 56 | | | 26 | |
| 2030 | | 55 | | | 26 | |
| Thereafter | | 2,262 | | | 400 | |
| Total lease payments | | $ | 2,610 | | | $ | 535 | |
| Less: Interest | | (1,852) | | | (277) | |
| Present value of lease liabilities | | $ | 758 | | | $ | 258 | |
The following table presents the weighted-average remaining lease term (in years) and the weighted-average discount rate for the Company's operating leases and finance leases:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| | Operating leases | | Finance leases | | Operating leases | | Finance leases |
| | | | | | | | |
| Weighted-average remaining lease term | | 31.6 | | 20.3 | | 19.2 | | 20.9 |
| Weighted-average discount rate | | 7.7% | | 8.4% | | 7.8% | | 8.6% |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.