Annual report [Section 13 and 15(d), not S-K Item 405]

Leases

v3.25.0.1
Leases
 12 Months Ended
Dec. 31, 2024
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, 2024 and 2023.
Net Investment (1)
December 31
(Dollars in millions) 2024 2023
Lease receivables $ 18,559  $ 16,565 
Unguaranteed residuals 2,543  2,485 
   Total net investment in sales-type and direct
      financing leases		 $ 21,102  $ 19,050 
(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 $8.0 billion and $6.8 billion at December 31, 2024 and 2023.
The table below presents lease income for 2024, 2023 and 2022.
Lease Income
(Dollars in millions) 2024 2023 2022
Sales-type and direct financing leases $ 1,082  $ 788  $ 589 
Operating leases 931  945  941 
   Total lease income $ 2,013  $ 1,733  $ 1,530 
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, 2024 and 2023.
Supplemental Information for Lessee Arrangements
December 31
(Dollars in millions) 2024 2023
Right-of-use assets $ 8,527  $ 9,150 
Lease liabilities 9,135  9,782 
Weighted-average discount rate
  used to calculate present
  value of future minimum lease
  payments		 3.93  % 3.51  %
Weighted-average lease term
  (in years)		 8.0 8.2
Right-of-use assets obtained in
  exchange for new operating
  lease liabilities (1)
$ 603  $ 430 
2024 2023 2022
Operating cash flows from
  operating leases (2)
$ 1,972  $ 1,975  $ 1,986 
Lease Cost and Supplemental
  Information:
Operating lease cost $ 1,971  $ 1,981  $ 2,008 
Variable lease cost (3)
471  460  464 
   Total lease cost (4)
$ 2,442  $ 2,441  $ 2,472 
(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, 2024 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, 2024
2025 $ 586  $ 5,183  $ 1,770 
2026 491  5,645  1,596 
2027 416  4,760  1,409 
2028 333  1,967  1,142 
2029 230  1,398  832 
Thereafter 335  1,967  3,500 
Total undiscounted
cash flows
 $ 2,391  20,920  10,249 
Less: Net present
value adjustment
 2,361  1,114 
Total (3)
$ 18,559  $ 9,135 
(1)Excludes $845 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2025.
(2)Includes $12.2 billion in commercial lease financing receivables and $6.4 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, 2024 and 2023.
Net Investment (1)
December 31
(Dollars in millions) 2024 2023
Lease receivables $ 18,559  $ 16,565 
Unguaranteed residuals 2,543  2,485 
   Total net investment in sales-type and direct
      financing leases		 $ 21,102  $ 19,050 
(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 $8.0 billion and $6.8 billion at December 31, 2024 and 2023.
The table below presents lease income for 2024, 2023 and 2022.
Lease Income
(Dollars in millions) 2024 2023 2022
Sales-type and direct financing leases $ 1,082  $ 788  $ 589 
Operating leases 931  945  941 
   Total lease income $ 2,013  $ 1,733  $ 1,530 
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, 2024 and 2023.
Supplemental Information for Lessee Arrangements
December 31
(Dollars in millions) 2024 2023
Right-of-use assets $ 8,527  $ 9,150 
Lease liabilities 9,135  9,782 
Weighted-average discount rate
  used to calculate present
  value of future minimum lease
  payments		 3.93  % 3.51  %
Weighted-average lease term
  (in years)		 8.0 8.2
Right-of-use assets obtained in
  exchange for new operating
  lease liabilities (1)
$ 603  $ 430 
2024 2023 2022
Operating cash flows from
  operating leases (2)
$ 1,972  $ 1,975  $ 1,986 
Lease Cost and Supplemental
  Information:
Operating lease cost $ 1,971  $ 1,981  $ 2,008 
Variable lease cost (3)
471  460  464 
   Total lease cost (4)
$ 2,442  $ 2,441  $ 2,472 
(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, 2024 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, 2024
2025 $ 586  $ 5,183  $ 1,770 
2026 491  5,645  1,596 
2027 416  4,760  1,409 
2028 333  1,967  1,142 
2029 230  1,398  832 
Thereafter 335  1,967  3,500 
Total undiscounted
cash flows
 $ 2,391  20,920  10,249 
Less: Net present
value adjustment
 2,361  1,114 
Total (3)
$ 18,559  $ 9,135 
(1)Excludes $845 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2025.
(2)Includes $12.2 billion in commercial lease financing receivables and $6.4 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, 2024 and 2023.
Net Investment (1)
December 31
(Dollars in millions) 2024 2023
Lease receivables $ 18,559  $ 16,565 
Unguaranteed residuals 2,543  2,485 
   Total net investment in sales-type and direct
      financing leases		 $ 21,102  $ 19,050 
(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 $8.0 billion and $6.8 billion at December 31, 2024 and 2023.
The table below presents lease income for 2024, 2023 and 2022.
Lease Income
(Dollars in millions) 2024 2023 2022
Sales-type and direct financing leases $ 1,082  $ 788  $ 589 
Operating leases 931  945  941 
   Total lease income $ 2,013  $ 1,733  $ 1,530 
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, 2024 and 2023.
Supplemental Information for Lessee Arrangements
December 31
(Dollars in millions) 2024 2023
Right-of-use assets $ 8,527  $ 9,150 
Lease liabilities 9,135  9,782 
Weighted-average discount rate
  used to calculate present
  value of future minimum lease
  payments		 3.93  % 3.51  %
Weighted-average lease term
  (in years)		 8.0 8.2
Right-of-use assets obtained in
  exchange for new operating
  lease liabilities (1)
$ 603  $ 430 
2024 2023 2022
Operating cash flows from
  operating leases (2)
$ 1,972  $ 1,975  $ 1,986 
Lease Cost and Supplemental
  Information:
Operating lease cost $ 1,971  $ 1,981  $ 2,008 
Variable lease cost (3)
471  460  464 
   Total lease cost (4)
$ 2,442  $ 2,441  $ 2,472 
(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, 2024 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, 2024
2025 $ 586  $ 5,183  $ 1,770 
2026 491  5,645  1,596 
2027 416  4,760  1,409 
2028 333  1,967  1,142 
2029 230  1,398  832 
Thereafter 335  1,967  3,500 
Total undiscounted
cash flows
 $ 2,391  20,920  10,249 
Less: Net present
value adjustment
 2,361  1,114 
Total (3)
$ 18,559  $ 9,135 
(1)Excludes $845 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2025.
(2)Includes $12.2 billion in commercial lease financing receivables and $6.4 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, 2024 and 2023.
Net Investment (1)
December 31
(Dollars in millions) 2024 2023
Lease receivables $ 18,559  $ 16,565 
Unguaranteed residuals 2,543  2,485 
   Total net investment in sales-type and direct
      financing leases		 $ 21,102  $ 19,050 
(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 $8.0 billion and $6.8 billion at December 31, 2024 and 2023.
The table below presents lease income for 2024, 2023 and 2022.
Lease Income
(Dollars in millions) 2024 2023 2022
Sales-type and direct financing leases $ 1,082  $ 788  $ 589 
Operating leases 931  945  941 
   Total lease income $ 2,013  $ 1,733  $ 1,530 
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, 2024 and 2023.
Supplemental Information for Lessee Arrangements
December 31
(Dollars in millions) 2024 2023
Right-of-use assets $ 8,527  $ 9,150 
Lease liabilities 9,135  9,782 
Weighted-average discount rate
  used to calculate present
  value of future minimum lease
  payments		 3.93  % 3.51  %
Weighted-average lease term
  (in years)		 8.0 8.2
Right-of-use assets obtained in
  exchange for new operating
  lease liabilities (1)
$ 603  $ 430 
2024 2023 2022
Operating cash flows from
  operating leases (2)
$ 1,972  $ 1,975  $ 1,986 
Lease Cost and Supplemental
  Information:
Operating lease cost $ 1,971  $ 1,981  $ 2,008 
Variable lease cost (3)
471  460  464 
   Total lease cost (4)
$ 2,442  $ 2,441  $ 2,472 
(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, 2024 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, 2024
2025 $ 586  $ 5,183  $ 1,770 
2026 491  5,645  1,596 
2027 416  4,760  1,409 
2028 333  1,967  1,142 
2029 230  1,398  832 
Thereafter 335  1,967  3,500 
Total undiscounted
cash flows
 $ 2,391  20,920  10,249 
Less: Net present
value adjustment
 2,361  1,114 
Total (3)
$ 18,559  $ 9,135 
(1)Excludes $845 million in commitments under lessee arrangements that have not yet commenced with lease terms that will begin in 2025.
(2)Includes $12.2 billion in commercial lease financing receivables and $6.4 billion in direct/indirect consumer lease financing receivables.
(3)Represents lease receivables for lessor arrangements and lease liabilities for lessee arrangements.