LEASES (Notes)

9 Months Ended

Sep. 30, 2020

LEASES

For additional information on the Corporation's leases, see Note 15 to the Consolidated Financial Statements included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019.

The components of lease cost for operating and finance leases for the three and nine months ended September 30, 2020 and 2019 were as follows:


Lease Cost	Three Months Ended						Nine Months Ended
In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Operating lease cost	$	5	$	7	$	15	$	18
Short-term lease cost	6		6		17		20
Variable lease cost	2		1		6		3

Amortization of right-of-use assets - finance	—		—		1		1

Total lease cost	$	13	$	14	$	39	$	42

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


Other Lease Information	Nine Months Ended
In millions	Sep 30, 2020		Sep 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	14	$	18
Financing cash flows for finance leases	$	1	$	1

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at September 30, 2020 and December 31, 2019:


Lease Position	Balance Sheet Classification	Sep 30, 2020		Dec 31, 2019
In millions
Right-of-use assets obtained in exchange for lease obligations:
Operating leases ¹		$	8	$	105
Finance leases		$	1	$	—
Assets
Operating lease assets	Operating lease right-of-use assets	$	81	$	89
Finance lease assets	Property	12		12
Finance lease amortization	Accumulated depreciation	(7)		(6)
Total lease assets		$	86	$	95
Liabilities
Current
Operating	Operating lease liabilities - current	$	15	$	16
Finance	Long-term debt due within one year	1		1
Noncurrent
Operating	Operating lease liabilities - noncurrent	67		74
Finance	Long-Term Debt	4		5
Total lease liabilities		$	87	$	96

1.Includes $99 million for the period ended December 31, 2019 related to the adoption of ASU 2016-02, "Leases (Topic 842)," and the associated ASUs, in the first quarter of 2019.

The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at September 30, 2020 and December 31, 2019 are provided below:


Lease Term and Discount Rate	Sep 30, 2020		Dec 31, 2019
Weighted-average remaining lease term
Operating leases	5.9 years		6.3 years
Finance leases	3.6 years		4.5 years
Weighted-average discount rate
Operating leases	3.99	%	4.13	%
Finance leases	4.03	%	4.22	%

The following table provides the maturities of lease liabilities at September 30, 2020:


Maturities of Lease Liabilities	Sep 30, 2020
	Operating Leases		Finance Leases
In millions
2020	$	5	$	—
2021	17		2
2022	16		2
2023	14		1
2024	14		1
2025 and thereafter	27		—
Total future undiscounted lease payments	$	93	$	6
Less imputed interest	11		1
Total present value of lease liabilities	$	82	$	5

At September 30, 2020, the Corporation had additional leases of approximately $16 million for equipment and a rail yard, which had not yet commenced. These leases are expected to commence in 2020 and 2021, with lease terms of up to 20 years.