Leases

12 Months Ended

Dec. 31, 2023

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, 2023 and 2022.

Net Investment (1)
	December 31
(Dollars in millions)	2023		2022
Lease receivables	$	16,565	$	15,123
Unguaranteed residuals	2,485		2,143
Total net investment in sales-type and direct       financing leases	$	19,050	$	17,266

(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 $6.8 billion and $6.5 billion at December 31, 2023 and 2022.

The table below presents lease income for 2023, 2022 and 2021.

Lease Income
(Dollars in millions)	2023		2022		2021
Sales-type and direct financing leases	$	788	$	589	$	613
Operating leases	945		941		930
Total lease income	$	1,733	$	1,530	$	1,543

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 table below provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2023 and 2022.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2023			2022
Right-of-use assets	$	9,150		$	9,755
Lease liabilities	9,782			10,359
Weighted-average discount rate   used to calculate present   value of future minimum lease   payments	3.51		%	3.25		%
Weighted-average lease term   (in years)	8.2			8.6
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	430		$	824
	2023			2022			2021
Operating cash flows from   operating leases (2)	$	1,975		$	1,986		$	1,964
Lease Cost and Supplemental   Information:
Operating lease cost	$	1,981		$	2,008		$	2,025
Variable lease cost (3)	460			464			462
Total lease cost (4)	$	2,441		$	2,472		$	2,487

(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, 2023 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, 2023
2024	$	838	$	5,248	$	1,947
2025	647		4,137		1,734
2026	504		4,397		1,515
2027	393		1,588		1,308
2028	319		1,382		1,027
Thereafter	533		1,688		11,307
Total undiscounted cash flows	$	3,234	18,440		18,838
Less: Net present value adjustment			1,875		9,056
Total (3)			$	16,565	$	9,782

(1)Excludes $98 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2024.

(2)Includes $11.3 billion in commercial lease financing receivables and $5.3 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, 2023 and 2022.

Net Investment (1)
	December 31
(Dollars in millions)	2023		2022
Lease receivables	$	16,565	$	15,123
Unguaranteed residuals	2,485		2,143
Total net investment in sales-type and direct       financing leases	$	19,050	$	17,266

(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 $6.8 billion and $6.5 billion at December 31, 2023 and 2022.

The table below presents lease income for 2023, 2022 and 2021.

Lease Income
(Dollars in millions)	2023		2022		2021
Sales-type and direct financing leases	$	788	$	589	$	613
Operating leases	945		941		930
Total lease income	$	1,733	$	1,530	$	1,543

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 table below provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2023 and 2022.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2023			2022
Right-of-use assets	$	9,150		$	9,755
Lease liabilities	9,782			10,359
Weighted-average discount rate   used to calculate present   value of future minimum lease   payments	3.51		%	3.25		%
Weighted-average lease term   (in years)	8.2			8.6
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	430		$	824
	2023			2022			2021
Operating cash flows from   operating leases (2)	$	1,975		$	1,986		$	1,964
Lease Cost and Supplemental   Information:
Operating lease cost	$	1,981		$	2,008		$	2,025
Variable lease cost (3)	460			464			462
Total lease cost (4)	$	2,441		$	2,472		$	2,487

(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, 2023 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, 2023
2024	$	838	$	5,248	$	1,947
2025	647		4,137		1,734
2026	504		4,397		1,515
2027	393		1,588		1,308
2028	319		1,382		1,027
Thereafter	533		1,688		11,307
Total undiscounted cash flows	$	3,234	18,440		18,838
Less: Net present value adjustment			1,875		9,056
Total (3)			$	16,565	$	9,782

(1)Excludes $98 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2024.

(2)Includes $11.3 billion in commercial lease financing receivables and $5.3 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, 2023 and 2022.

Net Investment (1)
	December 31
(Dollars in millions)	2023		2022
Lease receivables	$	16,565	$	15,123
Unguaranteed residuals	2,485		2,143
Total net investment in sales-type and direct       financing leases	$	19,050	$	17,266

(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 $6.8 billion and $6.5 billion at December 31, 2023 and 2022.

The table below presents lease income for 2023, 2022 and 2021.

Lease Income
(Dollars in millions)	2023		2022		2021
Sales-type and direct financing leases	$	788	$	589	$	613
Operating leases	945		941		930
Total lease income	$	1,733	$	1,530	$	1,543

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 table below provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2023 and 2022.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2023			2022
Right-of-use assets	$	9,150		$	9,755
Lease liabilities	9,782			10,359
Weighted-average discount rate   used to calculate present   value of future minimum lease   payments	3.51		%	3.25		%
Weighted-average lease term   (in years)	8.2			8.6
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	430		$	824
	2023			2022			2021
Operating cash flows from   operating leases (2)	$	1,975		$	1,986		$	1,964
Lease Cost and Supplemental   Information:
Operating lease cost	$	1,981		$	2,008		$	2,025
Variable lease cost (3)	460			464			462
Total lease cost (4)	$	2,441		$	2,472		$	2,487

(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, 2023 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, 2023
2024	$	838	$	5,248	$	1,947
2025	647		4,137		1,734
2026	504		4,397		1,515
2027	393		1,588		1,308
2028	319		1,382		1,027
Thereafter	533		1,688		11,307
Total undiscounted cash flows	$	3,234	18,440		18,838
Less: Net present value adjustment			1,875		9,056
Total (3)			$	16,565	$	9,782

(1)Excludes $98 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2024.

(2)Includes $11.3 billion in commercial lease financing receivables and $5.3 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, 2023 and 2022.

Net Investment (1)
	December 31
(Dollars in millions)	2023		2022
Lease receivables	$	16,565	$	15,123
Unguaranteed residuals	2,485		2,143
Total net investment in sales-type and direct       financing leases	$	19,050	$	17,266

(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 $6.8 billion and $6.5 billion at December 31, 2023 and 2022.

The table below presents lease income for 2023, 2022 and 2021.

Lease Income
(Dollars in millions)	2023		2022		2021
Sales-type and direct financing leases	$	788	$	589	$	613
Operating leases	945		941		930
Total lease income	$	1,733	$	1,530	$	1,543

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 table below provides information on the right-of-use assets, lease liabilities and weighted-average discount rates and lease terms at December 31, 2023 and 2022.

Supplemental Information for Lessee Arrangements
	December 31
(Dollars in millions)	2023			2022
Right-of-use assets	$	9,150		$	9,755
Lease liabilities	9,782			10,359
Weighted-average discount rate   used to calculate present   value of future minimum lease   payments	3.51		%	3.25		%
Weighted-average lease term   (in years)	8.2			8.6
Right-of-use assets obtained in   exchange for new operating   lease liabilities (1)	$	430		$	824
	2023			2022			2021
Operating cash flows from   operating leases (2)	$	1,975		$	1,986		$	1,964
Lease Cost and Supplemental   Information:
Operating lease cost	$	1,981		$	2,008		$	2,025
Variable lease cost (3)	460			464			462
Total lease cost (4)	$	2,441		$	2,472		$	2,487

(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, 2023 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, 2023
2024	$	838	$	5,248	$	1,947
2025	647		4,137		1,734
2026	504		4,397		1,515
2027	393		1,588		1,308
2028	319		1,382		1,027
Thereafter	533		1,688		11,307
Total undiscounted cash flows	$	3,234	18,440		18,838
Less: Net present value adjustment			1,875		9,056
Total (3)			$	16,565	$	9,782

(1)Excludes $98 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2024.

(2)Includes $11.3 billion in commercial lease financing receivables and $5.3 billion in direct/indirect consumer lease financing receivables.

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