LEASES AND OTHER COMMITMENTS LEASES AND OTHER COMMITMENTS

12 Months Ended

Dec. 31, 2020

LEASES AND OTHER COMMITMENTS

Leases

The Company has operating leases, as a lessee, with customary terms that do not include: significant variable lease payments; significant reasonably certain extensions or options required to be included in the lease term; restrictions; or other covenants for real property, rolling stock, and machinery and equipment. Real property leases primarily consist of office space and rolling stock leases primarily for railcars and fleet vehicles. At December 31, 2020 and December 31, 2019, operating right-to-use assets of $176 million and $197 million, respectively, are included as a part of "Other noncurrent assets" in the Consolidated Statements of Financial Position and includes $9 million and $8 million, respectively, of assets previously classified as lease intangibles. Operating lease liabilities are included as a part of "Payables and other current liabilities" and "Other long-term liabilities" in the Consolidated Statements of Financial Position.

As of December 31, 2020, maturities of operating lease liabilities is provided below:


(Dollars in millions)	Operating lease liabilities
2021	$	60
2022	44
2023	31
2024	18
2025	12
2026 and beyond	28
Total lease payments	193
Less: amounts of lease payments representing interest	14
Present value of future lease payments	179
Less: current obligations under leases	56
Long-term lease obligations	$	123

As of December 31, 2019, maturities of operating lease liabilities is provided below:


(Dollars in millions)	Operating lease liabilities
2020	$	62
2021	49
2022	38
2023	25
2024	14
2025 and beyond	30
Total lease payments	218
Less: amounts of lease payments representing interest	22
Present value of future lease payments	196
Less: current obligations under leases	55
Long-term lease obligations	$	141

The Company has operating leases, primarily leases for railcars, with terms that require the Company to guarantee a portion of the residual value of the leased assets upon termination of the lease that will expire beginning in second quarter 2021. Management's current expectation is that the likelihood of material residual guarantee payments is remote.

Lease costs during the period and other information is provided below:


(Dollars in millions)		2020			2019
Lease costs:
	Operating lease costs	$	73		$	70
	Short-term lease costs	37			40
	Sublease income	(4)			(2)
	Total	$	106		$	108

Other operating lease information:
	Cash paid for amounts included in the measurement of lease liabilities	$	72		$	72
	Right-to-use assets obtained in exchange for new lease liabilities	$	55		$	54

	Weighted-average remaining lease term, in years	5			5
	Weighted-average discount rate	3.6		%	4.0		%

Debt and Other Commitments

Eastman's obligations are summarized in the following table.


(Dollars in millions)	Payments Due for
Period	Debt Securities		Credit Facilities and Other		Interest Payable		Purchase Obligations		Operating Leases		Other Liabilities		Total
2021	$	299	$	50	$	172	$	187	$	60	$	274	$	1,042
2022	744		—		174		174		44		95		1,231
2023	919		—		157		137		31		91		1,335
2024	241		—		137		140		18		99		635
2025	701		—		119		112		12		87		1,031
2026 and beyond	2,664		—		1,291		2,432		28		1,191		7,606
Total	$	5,568	$	50	$	2,050	$	3,182	$	193	$	1,837	$	12,880

Estimated future payments of debt securities assumes the repayment of principal upon stated maturity, and actual amounts and the timing of such payments may differ materially due to repayment or other changes in the terms of such debt prior to maturity.

Eastman had various purchase obligations at December 31, 2020 totaling approximately $3.2 billion over a period of approximately 30 years for materials, supplies, and energy incident to the ordinary conduct of business.

Amounts in other liabilities represent the current estimated cash payments required to be made by the Company primarily for pension and other postretirement benefits, environmental loss contingency estimates, accrued compensation benefits, uncertain tax liabilities, and commodity and foreign exchange hedging in the periods indicated. Due to uncertainties in the timing of the effective settlement of tax positions with respect to taxing authorities, management is unable to determine the timing of payments related to uncertain tax liabilities and these amounts are included in the "2026 and beyond" line item.

The amount and timing of pension and other postretirement benefit payments included in other liabilities is dependent upon interest rates, health care cost trends, actual returns on plan assets, retirement and attrition rates of employees, continuation or modification of the benefit plans, and other factors. Such factors can significantly impact the amount and timing of any future contributions by the Company. Excess contributions are periodically made by management in order to keep the plans' funded status above 80 percent under the funding provisions of the Pension Protection Act to avoid partial benefit restrictions on accelerated forms of payment. The Company's U.S. defined benefit pension plans are not currently under any benefit restrictions. See Note 10, "Retirement Plans", for more information regarding pension and other postretirement benefit obligations.

The resolution of uncertainties related to environmental matters included in other liabilities may have a material adverse effect on the Company's consolidated results of operations in the period recognized, however, because of the availability of legal defenses, the Company's preliminary assessment of actions that may be required, and, if applicable, the expected sharing of costs, management does not believe that the Company's liability for these environmental matters, individually or in the aggregate, will be material to the Company's consolidated financial position, results of operations, or cash flows. See Note 1, "Significant Accounting Policies", for environmental costs, and see Note 12, "Environmental Matters and Asset Retirement Obligations", for more information regarding outstanding environmental matters and asset retirement obligations.

Guarantees and claims also arise during the ordinary course of business from relationships with customers, suppliers, joint venture partners, and other parties when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Non-performance under a contract could trigger an obligation of the Company. The Company's current other guarantees include guarantees relating to intellectual property, environmental matters, and other indemnifications and have arisen through the normal course of business. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the final outcome of these claims, if they were to occur. These other guarantees have terms up to 30 years with maximum potential future payments of approximately $25 million in the aggregate, with none of these guarantees being individually significant to the Company's operating results, financial position, or liquidity. Management's current expectation is that future payment or performance related to non-performance under other guarantees is remote.