LEASES (Notes)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

LEASES

Operating lease ROU assets are included in "Operating lease right-of-use assets" and finance lease ROU assets are included in "Net property" in the consolidated balance sheets. With respect to lease liabilities, operating lease liabilities are included in "Operating lease liabilities - current" and "Operating lease liabilities - noncurrent," and finance lease liabilities are included in "Long-term debt due within one year" and "Long-Term Debt" in the consolidated balance sheets.

The Corporation routinely leases sales and administrative offices, product and utility production facilities, warehouses and tanks for product storage, motor vehicles, railcars, computers, office machines and equipment. Some leases contain renewal provisions, purchase options and escalation clauses. The terms for these leased assets vary depending on the lease agreement. These leased assets have remaining lease terms that currently range from 1 to 10 years. The Corporation's lease agreements do not contain any material residual value guarantees or restrictive covenants. See Notes 1 and 2 for additional information on leases.

The components of lease cost for operating and finance leases for the three and six months ended June 30, 2019 were as follows:

Lease Cost	Three Months Ended  Jun 30, 2019		Six Months Ended Jun 30, 2019
In millions
Operating lease cost	$	5	$	11
Short-term lease cost	7		14
Variable lease cost	2		2
Amortization of right-of-use assets - finance	1		1
Total lease cost	$	15	$	28

The following table provides supplemental cash flow information related to leases:

Other Lease Information	Six Months Ended  Jun 30, 2019
In millions
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	11

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at June 30, 2019:

Lease Position	Balance Sheet Classification	Jun 30, 2019
In millions
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 1		$	105
Assets
Operating lease assets	Operating lease right-of-use assets	$	95
Finance lease assets	Property	12
Finance lease amortization	Accumulated depreciation	(6		)
Total lease assets		$	101
Liabilities
Current
Operating	Operating lease liabilities - current	$	17
Finance	Long-term debt due within one year	1
Noncurrent
Operating	Operating lease liabilities - noncurrent	78
Finance	Long-Term Debt	5
Total lease liabilities		$	101

1. Includes $99 million related to the adoption of Topic 842. See Note 2 for additional information.

Lease Term and Discount Rate	Jun 30, 2019
Weighted-average remaining lease term
Operating leases	6.6 years
Finance leases	5.0 years
Weighted-average discount rate
Operating leases	4.26	%
Finance leases	4.22	%

The following table provides the maturities of lease liabilities at June 30, 2019:

Maturities of Lease Liabilities at Jun 30, 2019	Operating Leases		Finance Leases
In millions
2019	$	11	$	1
2020	19		1
2021	16		1
2022	14		2
2023	13		1
2024 and thereafter	36		1
Total future undiscounted lease payments	$	109	$	7
Less imputed interest	14		1
Total present value of lease liabilities	$	95	$	6

At June 30, 2019, the Corporation had an additional lease of approximately $5 million for a rail yard, which has not yet commenced. This lease is expected to commence in late 2019, with a lease term of 10 years.

Future minimum lease payments for operating leases accounted for under ASC 840, "Leases," with remaining non-cancelable terms in excess of one year were as follows at December 31, 2018:

Minimum Lease Commitments at Dec 31, 2018
In millions
2019	$	18
2020	16
2021	14
2022	13
2023	13
2024 and thereafter	37
Total	$	111