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LEASES (Tables)

12 Months Ended

Dec. 31, 2021

The components of lease cost for operating and finance leases for the years ended December 31, 2021, 2020 and 2019 were as follows:


Lease Cost	2021		2020		2019
In millions
Operating lease cost	$	494	$	484	$	532
Finance lease cost
Amortization of right-of-use assets - finance	76		58		39
Interest on lease liabilities - finance	27		25		25
Total finance lease cost	103		83		64
Short-term lease cost	238		213		204
Variable lease cost	381		199		198
Sublease income	(6)		(5)		(4)
Total lease cost	$	1,210	$	974	$	994

Schedule of Supplemental Cash Flow Information Related to Leases [Table Text Block]

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


Other Lease Information	2021		2020		2019
In millions	2021		2020		2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	497	$	482	$	544
Operating cash flows for finance leases	$	27	$	25	$	25
Financing cash flows for finance leases	$	74	$	58	$	34
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 1, 2	$	(25)	$	185	$	2,476
Finance leases 1	$	512	$	178	$	89

1.In 2021, $193 million of leased assets were reclassified from Operating leases to Finance leases due to an amendment that extended the term of the agreement.

2.2019 includes $2.3 billion related to the adoption of Topic 842. See Note 1 for additional information.

Schedule of Lease Assets and Liabilities [Table Text Block]

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at December 31, 2021 and 2020.


Lease Position	Balance Sheet Classification	Dec 31, 2021		Dec 31, 2020
In millions
Assets
Operating lease assets	Operating lease right-of-use assets	$	1,412	$	1,856
Finance lease assets	Property	1,158		665
Finance lease amortization	Accumulated depreciation	(368)		(216)
Total lease assets		$	2,202	$	2,305
Liabilities
Current
Operating	Operating lease liabilities - current	$	314	$	416
Finance	Long-term debt due within one year	106		54
Noncurrent
Operating	Operating lease liabilities - noncurrent	1,149		1,521
Finance	Long-Term Debt	763		464
Total lease liabilities		$	2,332	$	2,455

In 2021, the Company executed buy-outs of certain leased assets for $687 million. The lease buy-outs reduced “Operating lease right-of-use assets” by $166 million and reduced “Operating lease liabilities - current” and “Operating lease liabilities - noncurrent” by $44 million and $158 million, respectively. The Company recognized a pretax loss related to the lease buy-outs of $37 million included in “Sundry income (expense) - net” in the consolidated statements of income. The lease buy-outs are included in “Purchases of previously leased assets” in the consolidated statements of cash flows.

Additionally, in 2021, the Company amended an agreement to extend leases of certain assets. The amendment and related remeasurement resulted in a reclassification of $73 million from “Operating lease liabilities – noncurrent” to “Long-Term Debt” and $34 million from “Operating lease liabilities - current” to “Long-term debt due within one year." In addition to the reclassifications, the amendment increased “Long-Term Debt” by $152 million and decreased “Long-term debt due within one year" by $2 million.

Lease Terms and Discount Rates [Table Text Block]

The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at December 31, 2021 and 2020 are provided below:


Lease Term and Discount Rate	Dec 31, 2021		Dec 31, 2020
Weighted-average remaining lease term
Operating leases	7.9 years		7.6 years
Finance leases	11.8 years		11.6 years
Weighted-average discount rate
Operating leases	3.72	%	3.84	%
Finance leases	4.17	%	5.41	%

Maturities of Lease Liabilities [Table Text Block]

The following table provides the maturities of lease liabilities at December 31, 2021:


Maturities of Lease Liabilities	Operating Leases		Finance Leases
In millions
2022	$	346	$	137
2023	281		162
2024	218		103
2025	181		74
2026	145		69
2027 and thereafter	570		551
Total future undiscounted lease payments	$	1,741	$	1,096
Less: Imputed interest	278		227
Total present value of lease liabilities	$	1,463	$	869

Schedule of Guarantor Obligations

The following table provides a summary of the final expiration, maximum future payments and recorded liability reflected in the consolidated balance sheets for guarantees:


Guarantees	Dec 31, 2021					Dec 31, 2020
In millions	Final Expiration	Maximum Future Payments 1		Recorded Liability		Final Expiration	Maximum Future Payments		Recorded Liability
Guarantees	2038	$	1,273	$	220	2023	$	251	$	2

1.In addition, TDCC has provided guarantees, in proportion to the Company's 35 percent ownership interest, of all future interest payments that will become due on Sadara’s project financing debt during the grace period, which Dow's share is estimated to be $446 million at December 31, 2021. Based on Sadara's current forecasted cash flows, the Company does not expect to be required to perform under the guarantees.

Residual Value Guarantees

Schedule of Guarantor Obligations


Lease Guarantees	Dec 31, 2021					Dec 31, 2020
In millions	Final Expiration	Maximum Future Payments		Recorded Liability		Final Expiration	Maximum Future Payments		Recorded Liability
Residual value guarantees	2031	$	280	$	—	2030	$	818	$	22