LEASES

Operating lease ROU assets are included in "Operating lease right-of-use assets" while 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.

TDCC routinely leases sales and administrative offices, power plants, production facilities, warehouses and tanks for product storage, aircraft, motor vehicles, railcars, computers, office machines and equipment. Some leases contain renewal provisions, purchase options and escalation clauses and 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 50 years. See Notes 1 and 2 for additional information on leases.

The components of lease cost for operating and finance leases for the three months ended March 31, 2019 were as follows:



Lease Cost	Three Months Ended Mar 31, 2019
In millions	Three Months Ended Mar 31, 2019
Operating lease cost	$	147
Finance lease cost
Amortization of right-of-use assets - finance	6
Interest on lease liabilities - finance	6
Total finance lease cost	$	12
Short-term lease cost	55
Variable lease cost	85
Sublease income	(1		)
Total lease cost	$	298

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



Other Lease Information	Three Months Ended Mar 31, 2019
In millions	Three Months Ended Mar 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	154
Operating cash flows from finance leases	$	6
Financing cash flows from finance leases	$	3

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



Lease Position	Balance Sheet Classification	Mar 31, 2019
In millions	Balance Sheet Classification	Mar 31, 2019
Right-of-use assets obtained in exchange for lease obligations:
Operating leases ¹		$	2,714
Assets
Operating lease assets	Operating lease right-of-use assets	$	2,584
Finance lease assets	Property	437
Finance lease amortization	Accumulated depreciation	(143		)
Total lease assets		$	2,878
Liabilities
Current
Operating	Operating lease liabilities - current	$	477
Finance	Long-term debt due within one year	20
Noncurrent
Operating	Operating lease liabilities - noncurrent	2,126
Finance	Long-Term Debt	349
Total lease liabilities		$	2,972


1.	Includes $2.7 billion related to the adoption of Topic 842. See Note 2 for additional information.



Lease Term and Discount Rate	Mar 31, 2019
Weighted-average remaining lease term
Operating leases	8.7 years
Finance leases	18.7 years
Weighted-average discount rate
Operating leases	4.12	%
Finance leases	6.98	%

The following table provides the maturities of lease liabilities at March 31, 2019:



Maturities of Lease Liabilities at Mar 31, 2019	Operating Leases		Finance Leases
In millions	Operating Leases		Finance Leases
2019	$	437	$	38
2020	515		48
2021	421		46
2022	343		44
2023	291		71
2024 and thereafter	1,157		309
Total future undiscounted lease payments	$	3,164	$	556
Less imputed interest	561		187
Total present value of lease liabilities	$	2,603	$	369

At March 31, 2019, TDCC had additional leases of approximately $45 million, primarily for buildings and equipment, which had not yet commenced. These leases are expected to commence later in 2019, with lease terms 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 at December 31, 2018 were as follows:



Minimum Lease Commitments at Dec 31, 2018
In millions
2019	$	412
2020	369
2021	328
2022	297
2023	253
2024 and thereafter	978
Total	$	2,637

TDCC provides guarantees related to certain leased assets, specifying the residual value that will be available to the lessor at lease termination through the sale of the assets to the lessee or third parties. The following table provides a summary of the final expiration, maximum future payment and recorded liability reflected in the consolidated balance sheets for residual value guarantees at March 31, 2019 and December 31, 2018. There was no recorded liability related to these residual value guarantees at March 31, 2019, as payment of such residual value guarantees was not determined to be probable. The lease agreements do not contain any material restrictive covenants.



Lease Guarantees	March 31, 2019					December 31, 2018
In millions	Final Expiration	Maximum Future Payments		Recorded Liability		Final Expiration	Maximum Future Payments		Recorded Liability
Residual value guarantees	2028	$	885	$	—	2028	$	885	$	130