Leases

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Leases

Leases

The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.

Lessor Arrangements

The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

The table below presents the net investment in sales-type and direct financing leases at December 31, 2022 and 2021.

Net Investment (1)
	December 31
(Dollars in millions)	2022		2021
Lease receivables	$	15,123	$	16,806
Unguaranteed residuals	2,143		2,078
Total net investment in sales-type and direct       financing leases	$	17,266	$	18,884

(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $6.5 billion and $7.1 billion at December 31, 2022 and 2021.

The table below presents lease income for 2022, 2021 and 2020.

Lease Income
(Dollars in millions)	2022		2021		2020
Sales-type and direct financing leases	$	589	$	613	$	707
Operating leases	941		930		931
Total lease income	$	1,530	$	1,543	$	1,638

Lessee Arrangements

The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.

Lease terms may contain renewal and extension options and early termination features. Generally, these options do not impact the lease term because the Corporation is not reasonably certain that it will exercise the options.

The following table provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2022 and 2021.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2022			2021
Right-of-use asset	$	9,755		$	10,233
Lease liabilities	10,359			10,858
Weighted-average discount rate used to calculate present value of future minimum lease payments	3.25		%	2.91		%
Weighted-average lease term (in years)	8.6			9.0
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	824		$	1,713
	2022			2021			2020
Operating cash flows from   operating leases (2)	$	1,986		$	1,964		$	2,039
Lease Cost and Supplemental   Information:
Operating lease cost	$	2,008		$	2,025		$	2,149
Variable lease cost (3)	464			462			474
Total lease cost (4)	$	2,472		$	2,487		$	2,623

(1)Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows.

(2)Represents cash paid for amounts included in the measurements of lease liabilities.

(3)Primarily consists of payments for common area maintenance and property taxes.

(4)Amounts are recorded in occupancy and equipment expense in the Consolidated Statement of Income.

Maturity Analysis

The maturities of lessor and lessee arrangements outstanding at December 31, 2022 are presented in the table below based on undiscounted cash flows.

Maturities of Lessor and Lessee Arrangements
	Lessor				Lessee (1)
	Operating Leases		Sales-type and Direct Financing Leases (2)		Operating Leases
(Dollars in millions)	December 31, 2022
2023	$	819	$	4,932	$	1,998
2024	682		4,399		1,850
2025	509		2,539		1,567
2026	368		1,993		1,354
2027	289		990		1,131
Thereafter	664		1,635		4,189
Total undiscounted cash flows	$	3,331	16,488		12,089
Less: Net present value adjustment			1,365		1,730
Total (3)			$	15,123	$	10,359

(1)Excludes $278 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2023.

(2)Includes $10.2 billion in commercial lease financing receivables and $4.9 billion in direct/indirect consumer lease financing receivables.

(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.

Leases

Leases

The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.

Lessor Arrangements

The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

The table below presents the net investment in sales-type and direct financing leases at December 31, 2022 and 2021.

Net Investment (1)
	December 31
(Dollars in millions)	2022		2021
Lease receivables	$	15,123	$	16,806
Unguaranteed residuals	2,143		2,078
Total net investment in sales-type and direct       financing leases	$	17,266	$	18,884

(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $6.5 billion and $7.1 billion at December 31, 2022 and 2021.

The table below presents lease income for 2022, 2021 and 2020.

Lease Income
(Dollars in millions)	2022		2021		2020
Sales-type and direct financing leases	$	589	$	613	$	707
Operating leases	941		930		931
Total lease income	$	1,530	$	1,543	$	1,638

Lessee Arrangements

The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.

Lease terms may contain renewal and extension options and early termination features. Generally, these options do not impact the lease term because the Corporation is not reasonably certain that it will exercise the options.

The following table provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2022 and 2021.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2022			2021
Right-of-use asset	$	9,755		$	10,233
Lease liabilities	10,359			10,858
Weighted-average discount rate used to calculate present value of future minimum lease payments	3.25		%	2.91		%
Weighted-average lease term (in years)	8.6			9.0
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	824		$	1,713
	2022			2021			2020
Operating cash flows from   operating leases (2)	$	1,986		$	1,964		$	2,039
Lease Cost and Supplemental   Information:
Operating lease cost	$	2,008		$	2,025		$	2,149
Variable lease cost (3)	464			462			474
Total lease cost (4)	$	2,472		$	2,487		$	2,623

(1)Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows.

(2)Represents cash paid for amounts included in the measurements of lease liabilities.

(3)Primarily consists of payments for common area maintenance and property taxes.

(4)Amounts are recorded in occupancy and equipment expense in the Consolidated Statement of Income.

Maturity Analysis

The maturities of lessor and lessee arrangements outstanding at December 31, 2022 are presented in the table below based on undiscounted cash flows.

Maturities of Lessor and Lessee Arrangements
	Lessor				Lessee (1)
	Operating Leases		Sales-type and Direct Financing Leases (2)		Operating Leases
(Dollars in millions)	December 31, 2022
2023	$	819	$	4,932	$	1,998
2024	682		4,399		1,850
2025	509		2,539		1,567
2026	368		1,993		1,354
2027	289		990		1,131
Thereafter	664		1,635		4,189
Total undiscounted cash flows	$	3,331	16,488		12,089
Less: Net present value adjustment			1,365		1,730
Total (3)			$	15,123	$	10,359

(1)Excludes $278 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2023.

(2)Includes $10.2 billion in commercial lease financing receivables and $4.9 billion in direct/indirect consumer lease financing receivables.

(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.

Leases

Leases

The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.

Lessor Arrangements

The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

The table below presents the net investment in sales-type and direct financing leases at December 31, 2022 and 2021.

Net Investment (1)
	December 31
(Dollars in millions)	2022		2021
Lease receivables	$	15,123	$	16,806
Unguaranteed residuals	2,143		2,078
Total net investment in sales-type and direct       financing leases	$	17,266	$	18,884

(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $6.5 billion and $7.1 billion at December 31, 2022 and 2021.

The table below presents lease income for 2022, 2021 and 2020.

Lease Income
(Dollars in millions)	2022		2021		2020
Sales-type and direct financing leases	$	589	$	613	$	707
Operating leases	941		930		931
Total lease income	$	1,530	$	1,543	$	1,638

Lessee Arrangements

The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.

Lease terms may contain renewal and extension options and early termination features. Generally, these options do not impact the lease term because the Corporation is not reasonably certain that it will exercise the options.

The following table provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2022 and 2021.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2022			2021
Right-of-use asset	$	9,755		$	10,233
Lease liabilities	10,359			10,858
Weighted-average discount rate used to calculate present value of future minimum lease payments	3.25		%	2.91		%
Weighted-average lease term (in years)	8.6			9.0
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	824		$	1,713
	2022			2021			2020
Operating cash flows from   operating leases (2)	$	1,986		$	1,964		$	2,039
Lease Cost and Supplemental   Information:
Operating lease cost	$	2,008		$	2,025		$	2,149
Variable lease cost (3)	464			462			474
Total lease cost (4)	$	2,472		$	2,487		$	2,623

(1)Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows.

(2)Represents cash paid for amounts included in the measurements of lease liabilities.

(3)Primarily consists of payments for common area maintenance and property taxes.

(4)Amounts are recorded in occupancy and equipment expense in the Consolidated Statement of Income.

Maturity Analysis

The maturities of lessor and lessee arrangements outstanding at December 31, 2022 are presented in the table below based on undiscounted cash flows.

Maturities of Lessor and Lessee Arrangements
	Lessor				Lessee (1)
	Operating Leases		Sales-type and Direct Financing Leases (2)		Operating Leases
(Dollars in millions)	December 31, 2022
2023	$	819	$	4,932	$	1,998
2024	682		4,399		1,850
2025	509		2,539		1,567
2026	368		1,993		1,354
2027	289		990		1,131
Thereafter	664		1,635		4,189
Total undiscounted cash flows	$	3,331	16,488		12,089
Less: Net present value adjustment			1,365		1,730
Total (3)			$	15,123	$	10,359

(1)Excludes $278 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2023.

(2)Includes $10.2 billion in commercial lease financing receivables and $4.9 billion in direct/indirect consumer lease financing receivables.

(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.

Leases

Leases

The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.

Lessor Arrangements

The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.

The table below presents the net investment in sales-type and direct financing leases at December 31, 2022 and 2021.

Net Investment (1)
	December 31
(Dollars in millions)	2022		2021
Lease receivables	$	15,123	$	16,806
Unguaranteed residuals	2,143		2,078
Total net investment in sales-type and direct       financing leases	$	17,266	$	18,884

(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $6.5 billion and $7.1 billion at December 31, 2022 and 2021.

The table below presents lease income for 2022, 2021 and 2020.

Lease Income
(Dollars in millions)	2022		2021		2020
Sales-type and direct financing leases	$	589	$	613	$	707
Operating leases	941		930		931
Total lease income	$	1,530	$	1,543	$	1,638

Lessee Arrangements

The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.

Lease terms may contain renewal and extension options and early termination features. Generally, these options do not impact the lease term because the Corporation is not reasonably certain that it will exercise the options.

The following table provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2022 and 2021.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2022			2021
Right-of-use asset	$	9,755		$	10,233
Lease liabilities	10,359			10,858
Weighted-average discount rate used to calculate present value of future minimum lease payments	3.25		%	2.91		%
Weighted-average lease term (in years)	8.6			9.0
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	824		$	1,713
	2022			2021			2020
Operating cash flows from   operating leases (2)	$	1,986		$	1,964		$	2,039
Lease Cost and Supplemental   Information:
Operating lease cost	$	2,008		$	2,025		$	2,149
Variable lease cost (3)	464			462			474
Total lease cost (4)	$	2,472		$	2,487		$	2,623

(1)Represents non-cash activity and, accordingly, is not reflected in the Consolidated Statement of Cash Flows.

(2)Represents cash paid for amounts included in the measurements of lease liabilities.

(3)Primarily consists of payments for common area maintenance and property taxes.

(4)Amounts are recorded in occupancy and equipment expense in the Consolidated Statement of Income.

Maturity Analysis

The maturities of lessor and lessee arrangements outstanding at December 31, 2022 are presented in the table below based on undiscounted cash flows.

Maturities of Lessor and Lessee Arrangements
	Lessor				Lessee (1)
	Operating Leases		Sales-type and Direct Financing Leases (2)		Operating Leases
(Dollars in millions)	December 31, 2022
2023	$	819	$	4,932	$	1,998
2024	682		4,399		1,850
2025	509		2,539		1,567
2026	368		1,993		1,354
2027	289		990		1,131
Thereafter	664		1,635		4,189
Total undiscounted cash flows	$	3,331	16,488		12,089
Less: Net present value adjustment			1,365		1,730
Total (3)			$	15,123	$	10,359

(1)Excludes $278 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2023.

(2)Includes $10.2 billion in commercial lease financing receivables and $4.9 billion in direct/indirect consumer lease financing receivables.

(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.