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.

Dow 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 of up to 53 years. See Note 1 for additional information on leases.

The components of lease cost for operating and finance leases for the years ended December 31, 2022, 2021 and 2020 were as follows:


Lease Cost	2022		2021		2020
In millions
Operating lease cost	$	397	$	494	$	484
Finance lease cost
Amortization of right-of-use assets - finance	105		76		58
Interest on lease liabilities - finance	32		27		25
Total finance lease cost	137		103		83
Short-term lease cost	255		238		213
Variable lease cost	611		381		199
Sublease income	(10)		(6)		(5)
Total lease cost	$	1,390	$	1,210	$	974


Other Lease Information	2022		2021		2020
In millions	2022		2021		2020

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	393	$	497	$	482
Operating cash flows for finance leases	$	32	$	27	$	25
Financing cash flows for finance leases	$	114	$	74	$	58
Right-of-use assets obtained in exchange for lease obligations:
Operating leases 1	$	151	$	(25)	$	185
Finance leases 1	$	62	$	512	$	178

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.

The following table summarizes the lease-related assets and liabilities recorded in the consolidated balance sheets at December 31, 2022 and 2021.


Lease Position	Balance Sheet Classification	Dec 31, 2022		Dec 31, 2021
In millions
Assets
Operating lease assets	Operating lease right-of-use assets	$	1,227	$	1,412
Finance lease assets	Property	1,167		1,158
Finance lease amortization	Accumulated depreciation	(441)		(368)
Total lease assets		$	1,953	$	2,202
Liabilities
Current
Operating	Operating lease liabilities - current	$	287	$	314
Finance	Long-term debt due within one year	109		106
Noncurrent
Operating	Operating lease liabilities - noncurrent	997		1,149
Finance	Long-Term Debt	681		763
Total lease liabilities		$	2,074	$	2,332

In 2021, the Company executed buy-outs of certain leased assets for $687 million. The lease buyouts 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.

The weighted-average remaining lease term and discount rate for leases recorded in the consolidated balance sheets at December 31, 2022 and 2021 are provided below:


Lease Term and Discount Rate	Dec 31, 2022		Dec 31, 2021
Weighted-average remaining lease term
Operating leases	7.6 years		7.9 years
Finance leases	11.0 years		11.8 years
Weighted-average discount rate
Operating leases	4.49	%	3.72	%
Finance leases	4.29	%	4.17	%


Maturities of Lease Liabilities	Operating Leases		Finance Leases
In millions
2023	$	333	$	138
2024	253		153
2025	199		78
2026	160		70
2027	129		64
2028 and thereafter	470		487
Total future undiscounted lease payments	$	1,544	$	990
Less: Imputed interest	260		200
Total present value of lease liabilities	$	1,284	$	790

At December 31, 2022, Dow had additional leases of approximately $142 million, primarily for equipment, which had not yet commenced. These leases are expected to commence in 2023 and 2025, with lease terms of up to 16 years.

Dow 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 payments and recorded liability reflected in the consolidated balance sheets for residual value guarantees at December 31, 2022 and 2021. The lease agreements do not contain any material restrictive covenants.


Lease Guarantees	Dec 31, 2022					Dec 31, 2021
In millions	Final Expiration	Maximum Future Payments		Recorded Liability		Final Expiration	Maximum Future Payments		Recorded Liability
Residual value guarantees	2031	$	258	$	—	2031	$	280	$	—