Leases

9 Months Ended

Sep. 30, 2019

LEASES

As a lessee, the Corporation has entered into operating leases for the majority of its real estate locations, primarily retail and office space. Total lease expenses were $20 million, including $16 million of operating lease expense and $4 million of variable lease expense, for the three months ended September 30, 2019 and $58 million, including $47 million of operating lease expense and $11 million of variable lease expense, for the nine months ended September 30, 2019.

At September 30, 2019, the Corporation's ROU assets and operating lease liabilities were $320 million and $358 million, respectively. The weighted average lease term for the lease liabilities was 9 years, and the weighted average discount rate of remaining payments was 3.82 percent. Lease liabilities from new ROU assets obtained during the nine months ended September 30, 2019 totaled $35 million. Cash paid on operating lease liabilities was $17 million and $50 million for the three and nine months ended September 30, 2019, respectively.

As of September 30, 2019, the contractual maturities of operating lease liabilities were as follows:



(in millions)
Years Ending December 31
2019 (a)	$	10
2020	64
2021	59
2022	50
2023	44
Thereafter	204
Total contractual maturities	431
Less imputed interest	(73		)
Total operating lease liabilities	$	358


(a)	Contractual maturities for the three months remaining in 2019.

As a lessor, the Corporation leases certain types of manufacturing and warehouse equipment as well as public and private transportation vehicles to its customers. The Corporation recognized lease-related revenue, primarily interest income from sales-type and direct financing leases of $4 million and $10 million for the three and nine months ended September 30, 2019, respectively. At September 30, 2019, the Corporation's net investment in sales-type and direct financing leases was $361 million.

As of September 30, 2019, the contractual maturities of sales-type and direct financing lease receivables were as follows:



(in millions)
Years Ending December 31
2019 (a)	$	18
2020	63
2021	52
2022	88
2023	39
Thereafter	58
Total lease payments receivable	318
Unguaranteed residual values	64
Less deferred interest income	(21		)
Total lease receivables (b)	$	361


(a)	Contractual maturities for the three months remaining in 2019.

(b)

Excludes net investment in leveraged leases of $217 million.