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Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

10. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet. Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. Leases with an initial term of less than one year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Operating lease cost						$	122		$	128
Finance lease cost:
Amortization of right-of-use assets						1			1
Interest on lease liabilities						—			—
Variable lease cost						19			24
Total lease cost (a)						$	142		$	153

(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2023, and December 31, 2022

Cash flows related to leases are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	135		$	139
Financing cash flows from finance leases						1			1
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases						$	65		$	46

(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2023 or December 31, 2022.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions			Balance sheet classification			December 31, 2023			December 31, 2022
Operating lease assets			Accrued income and other assets			$	479		$	525
Operating lease liabilities			Accrued expense and other liabilities			548			601
Finance leases:
Property and equipment, gross			Premises and equipment			$	18		$	18
Accumulated depreciation			Premises and equipment			(15)			(14)
Property and equipment, net						3			4
Finance lease liabilities			Long-term debt			5			6

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

			December 31, 2023			December 31, 2022
Weighted-average remaining lease term:
Operating leases			5.69			6.10
Finance leases			3.53			4.53
Weighted-average discount rate:
Operating leases			3.09		%	2.78		%
Finance leases			4.54		%	4.54		%

Maturities of lease liabilities are summarized as follows:

Dollars in millions			Operating Leases			Finance Leases			Total
2024			$	133		$	2		$	135
2025			118			1			119
2026			102			—			102
2027			84			—			84
2028			64			—			64
Thereafter			103			3			106
Total lease payments			$	604		$	6		$	610
Less imputed interest			56			1			57
Total			$	548		$	5		$	553

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

Dollars in millions						December 31, 2023			December 31, 2022
Sales-type and direct financing leases
Interest income on lease receivable						$	78		$	64
Interest income related to accretion of unguaranteed residual asset						13			15
Interest income on deferred fees and costs						4			—
Total sales-type and direct financing lease income						95			79
Operating leases
Operating lease income related to lease payments						84			105
Other operating leasing gains and (losses)						8			(2)
Total operating lease income and other leasing gains						92			103
Total lease income						$	187		$	182

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

Dollars in millions			December 31, 2023			December 31, 2022
Lease receivables			$	2,896		$	3,170
Unearned income			(286)			(253)
Unguaranteed residual value			468			472
Deferred fees and costs			2			5
Net investment in sales-type and direct financing leases			$	3,080		$	3,394

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Key assesses net investments in leases, including residual values, for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees at December 31, 2023, and December 31, 2022, was $258 million and $270 million, respectively.

At December 31, 2023, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions			Sales-type and direct financing lease payments
2024			$	823
2025			615
2026			485
2027			316
2028			192
Thereafter			445
Total lease payments			$	2,876

At December 31, 2023, minimum future lease payments to be received for operating leases are as follows:

Dollars in millions			Operating lease payments
2024			$	63
2025			52
2026			36
2027			24
2028			14
Thereafter			32
Total lease payments			$	220

The carrying amount of operating lease assets at December 31, 2023 and December 31, 2022, was $372 million and $505 million, respectively.

Leases

10. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet. Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. Leases with an initial term of less than one year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Operating lease cost						$	122		$	128
Finance lease cost:
Amortization of right-of-use assets						1			1
Interest on lease liabilities						—			—
Variable lease cost						19			24
Total lease cost (a)						$	142		$	153

(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2023, and December 31, 2022

Cash flows related to leases are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	135		$	139
Financing cash flows from finance leases						1			1
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases						$	65		$	46

(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2023 or December 31, 2022.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions			Balance sheet classification			December 31, 2023			December 31, 2022
Operating lease assets			Accrued income and other assets			$	479		$	525
Operating lease liabilities			Accrued expense and other liabilities			548			601
Finance leases:
Property and equipment, gross			Premises and equipment			$	18		$	18
Accumulated depreciation			Premises and equipment			(15)			(14)
Property and equipment, net						3			4
Finance lease liabilities			Long-term debt			5			6

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

			December 31, 2023			December 31, 2022
Weighted-average remaining lease term:
Operating leases			5.69			6.10
Finance leases			3.53			4.53
Weighted-average discount rate:
Operating leases			3.09		%	2.78		%
Finance leases			4.54		%	4.54		%

Maturities of lease liabilities are summarized as follows:

Dollars in millions			Operating Leases			Finance Leases			Total
2024			$	133		$	2		$	135
2025			118			1			119
2026			102			—			102
2027			84			—			84
2028			64			—			64
Thereafter			103			3			106
Total lease payments			$	604		$	6		$	610
Less imputed interest			56			1			57
Total			$	548		$	5		$	553

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

Dollars in millions						December 31, 2023			December 31, 2022
Sales-type and direct financing leases
Interest income on lease receivable						$	78		$	64
Interest income related to accretion of unguaranteed residual asset						13			15
Interest income on deferred fees and costs						4			—
Total sales-type and direct financing lease income						95			79
Operating leases
Operating lease income related to lease payments						84			105
Other operating leasing gains and (losses)						8			(2)
Total operating lease income and other leasing gains						92			103
Total lease income						$	187		$	182

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

Dollars in millions			December 31, 2023			December 31, 2022
Lease receivables			$	2,896		$	3,170
Unearned income			(286)			(253)
Unguaranteed residual value			468			472
Deferred fees and costs			2			5
Net investment in sales-type and direct financing leases			$	3,080		$	3,394

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Key assesses net investments in leases, including residual values, for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees at December 31, 2023, and December 31, 2022, was $258 million and $270 million, respectively.

At December 31, 2023, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions			Sales-type and direct financing lease payments
2024			$	823
2025			615
2026			485
2027			316
2028			192
Thereafter			445
Total lease payments			$	2,876

At December 31, 2023, minimum future lease payments to be received for operating leases are as follows:

Dollars in millions			Operating lease payments
2024			$	63
2025			52
2026			36
2027			24
2028			14
Thereafter			32
Total lease payments			$	220

The carrying amount of operating lease assets at December 31, 2023 and December 31, 2022, was $372 million and $505 million, respectively.

Leases

10. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet. Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. Leases with an initial term of less than one year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Operating lease cost						$	122		$	128
Finance lease cost:
Amortization of right-of-use assets						1			1
Interest on lease liabilities						—			—
Variable lease cost						19			24
Total lease cost (a)						$	142		$	153

(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2023, and December 31, 2022

Cash flows related to leases are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	135		$	139
Financing cash flows from finance leases						1			1
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases						$	65		$	46

(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2023 or December 31, 2022.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions			Balance sheet classification			December 31, 2023			December 31, 2022
Operating lease assets			Accrued income and other assets			$	479		$	525
Operating lease liabilities			Accrued expense and other liabilities			548			601
Finance leases:
Property and equipment, gross			Premises and equipment			$	18		$	18
Accumulated depreciation			Premises and equipment			(15)			(14)
Property and equipment, net						3			4
Finance lease liabilities			Long-term debt			5			6

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

			December 31, 2023			December 31, 2022
Weighted-average remaining lease term:
Operating leases			5.69			6.10
Finance leases			3.53			4.53
Weighted-average discount rate:
Operating leases			3.09		%	2.78		%
Finance leases			4.54		%	4.54		%

Maturities of lease liabilities are summarized as follows:

Dollars in millions			Operating Leases			Finance Leases			Total
2024			$	133		$	2		$	135
2025			118			1			119
2026			102			—			102
2027			84			—			84
2028			64			—			64
Thereafter			103			3			106
Total lease payments			$	604		$	6		$	610
Less imputed interest			56			1			57
Total			$	548		$	5		$	553

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

Dollars in millions						December 31, 2023			December 31, 2022
Sales-type and direct financing leases
Interest income on lease receivable						$	78		$	64
Interest income related to accretion of unguaranteed residual asset						13			15
Interest income on deferred fees and costs						4			—
Total sales-type and direct financing lease income						95			79
Operating leases
Operating lease income related to lease payments						84			105
Other operating leasing gains and (losses)						8			(2)
Total operating lease income and other leasing gains						92			103
Total lease income						$	187		$	182

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

Dollars in millions			December 31, 2023			December 31, 2022
Lease receivables			$	2,896		$	3,170
Unearned income			(286)			(253)
Unguaranteed residual value			468			472
Deferred fees and costs			2			5
Net investment in sales-type and direct financing leases			$	3,080		$	3,394

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Key assesses net investments in leases, including residual values, for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees at December 31, 2023, and December 31, 2022, was $258 million and $270 million, respectively.

At December 31, 2023, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions			Sales-type and direct financing lease payments
2024			$	823
2025			615
2026			485
2027			316
2028			192
Thereafter			445
Total lease payments			$	2,876

At December 31, 2023, minimum future lease payments to be received for operating leases are as follows:

Dollars in millions			Operating lease payments
2024			$	63
2025			52
2026			36
2027			24
2028			14
Thereafter			32
Total lease payments			$	220

The carrying amount of operating lease assets at December 31, 2023 and December 31, 2022, was $372 million and $505 million, respectively.

Leases

10. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet. Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. Leases with an initial term of less than one year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Operating lease cost						$	122		$	128
Finance lease cost:
Amortization of right-of-use assets						1			1
Interest on lease liabilities						—			—
Variable lease cost						19			24
Total lease cost (a)						$	142		$	153

(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2023, and December 31, 2022

Cash flows related to leases are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	135		$	139
Financing cash flows from finance leases						1			1
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases						$	65		$	46

(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2023 or December 31, 2022.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions			Balance sheet classification			December 31, 2023			December 31, 2022
Operating lease assets			Accrued income and other assets			$	479		$	525
Operating lease liabilities			Accrued expense and other liabilities			548			601
Finance leases:
Property and equipment, gross			Premises and equipment			$	18		$	18
Accumulated depreciation			Premises and equipment			(15)			(14)
Property and equipment, net						3			4
Finance lease liabilities			Long-term debt			5			6

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

			December 31, 2023			December 31, 2022
Weighted-average remaining lease term:
Operating leases			5.69			6.10
Finance leases			3.53			4.53
Weighted-average discount rate:
Operating leases			3.09		%	2.78		%
Finance leases			4.54		%	4.54		%

Maturities of lease liabilities are summarized as follows:

Dollars in millions			Operating Leases			Finance Leases			Total
2024			$	133		$	2		$	135
2025			118			1			119
2026			102			—			102
2027			84			—			84
2028			64			—			64
Thereafter			103			3			106
Total lease payments			$	604		$	6		$	610
Less imputed interest			56			1			57
Total			$	548		$	5		$	553

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

Dollars in millions						December 31, 2023			December 31, 2022
Sales-type and direct financing leases
Interest income on lease receivable						$	78		$	64
Interest income related to accretion of unguaranteed residual asset						13			15
Interest income on deferred fees and costs						4			—
Total sales-type and direct financing lease income						95			79
Operating leases
Operating lease income related to lease payments						84			105
Other operating leasing gains and (losses)						8			(2)
Total operating lease income and other leasing gains						92			103
Total lease income						$	187		$	182

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

Dollars in millions			December 31, 2023			December 31, 2022
Lease receivables			$	2,896		$	3,170
Unearned income			(286)			(253)
Unguaranteed residual value			468			472
Deferred fees and costs			2			5
Net investment in sales-type and direct financing leases			$	3,080		$	3,394

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Key assesses net investments in leases, including residual values, for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees at December 31, 2023, and December 31, 2022, was $258 million and $270 million, respectively.

At December 31, 2023, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions			Sales-type and direct financing lease payments
2024			$	823
2025			615
2026			485
2027			316
2028			192
Thereafter			445
Total lease payments			$	2,876

At December 31, 2023, minimum future lease payments to be received for operating leases are as follows:

Dollars in millions			Operating lease payments
2024			$	63
2025			52
2026			36
2027			24
2028			14
Thereafter			32
Total lease payments			$	220

The carrying amount of operating lease assets at December 31, 2023 and December 31, 2022, was $372 million and $505 million, respectively.

Leases

10. Leases

As a lessee, we enter into leases of land, buildings, and equipment. Our real estate leases primarily relate to bank branches and office space. The leases of equipment principally relate to technology assets for data processing and data storage. As a lessor, we primarily provide financing through our equipment leasing business.

Lessee

Our leases are classified as either operating or financing and have remaining terms ranging from 1 to 20 years with the exception of certain ground leases that have terms over 30 years. For leases with initial terms greater than one year, a lease liability, measured as the present value of unpaid lease payments, and a corresponding right-of-use asset for the right to use the leased properties are reported on the balance sheet. Lease payments are discounted using Key’s incremental borrowing rate, consistent with what Key would pay to borrow on a collateralized basis over a term similar to each lease. Leases with an initial term of less than one year are not recorded on the balance sheet. The related expense is recognized on a straight-line basis over the lease term.

Certain leases contain options to extend the lease term for up to five years. Some leases give us the option to terminate, for a penalty or at the lessor's discretion. Leases with variable payments are primarily based on adjustments for inflation over the term of the lease based on a contractually defined index. Certain ATM leases include variable payments based on volume of transactions.

Operating lease expense is recognized in "net occupancy" and "equipment" on the income statement. The components of lease expense are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Operating lease cost						$	122		$	128
Finance lease cost:
Amortization of right-of-use assets						1			1
Interest on lease liabilities						—			—
Variable lease cost						19			24
Total lease cost (a)						$	142		$	153

(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2023, and December 31, 2022

Cash flows related to leases are summarized as follows:

Dollars in millions						December 31, 2023			December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	135		$	139
Financing cash flows from finance leases						1			1
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases						$	65		$	46

(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2023 or December 31, 2022.

Additional balance sheet information related to leases is summarized as follows:

Dollars in millions			Balance sheet classification			December 31, 2023			December 31, 2022
Operating lease assets			Accrued income and other assets			$	479		$	525
Operating lease liabilities			Accrued expense and other liabilities			548			601
Finance leases:
Property and equipment, gross			Premises and equipment			$	18		$	18
Accumulated depreciation			Premises and equipment			(15)			(14)
Property and equipment, net						3			4
Finance lease liabilities			Long-term debt			5			6

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:

			December 31, 2023			December 31, 2022
Weighted-average remaining lease term:
Operating leases			5.69			6.10
Finance leases			3.53			4.53
Weighted-average discount rate:
Operating leases			3.09		%	2.78		%
Finance leases			4.54		%	4.54		%

Maturities of lease liabilities are summarized as follows:

Dollars in millions			Operating Leases			Finance Leases			Total
2024			$	133		$	2		$	135
2025			118			1			119
2026			102			—			102
2027			84			—			84
2028			64			—			64
Thereafter			103			3			106
Total lease payments			$	604		$	6		$	610
Less imputed interest			56			1			57
Total			$	548		$	5		$	553

Lessor Equipment Leasing

Leases may have fixed or floating rate terms. Variable payments are based on an index or other specified rate and are included in rental payments. Certain leases contain an option to extend the lease term or the option to terminate at the discretion of the lessee. Under certain conditions, lease agreements may also contain the option for a lessee to purchase the underlying asset.

Interest income from sales-type and direct financing leases is recognized in "interest income — loans" on the statement of income. Income related to operating leases is recognized in “operating lease income and other leasing gains” on the income statement. The components of equipment leasing income are summarized in the table below:

Dollars in millions						December 31, 2023			December 31, 2022
Sales-type and direct financing leases
Interest income on lease receivable						$	78		$	64
Interest income related to accretion of unguaranteed residual asset						13			15
Interest income on deferred fees and costs						4			—
Total sales-type and direct financing lease income						95			79
Operating leases
Operating lease income related to lease payments						84			105
Other operating leasing gains and (losses)						8			(2)
Total operating lease income and other leasing gains						92			103
Total lease income						$	187		$	182

Equipment leasing receivables relate to sales-type and direct financing leases. The composition of the net investment in sales-type and direct financing leases is as follows:

Dollars in millions			December 31, 2023			December 31, 2022
Lease receivables			$	2,896		$	3,170
Unearned income			(286)			(253)
Unguaranteed residual value			468			472
Deferred fees and costs			2			5
Net investment in sales-type and direct financing leases			$	3,080		$	3,394

The residual value component of a lease represents the fair value of the leased asset at the end of the lease term. We rely on industry data, historical experience, independent appraisals and the experience of the equipment leasing asset management team to value lease residuals. Relationships with a number of equipment vendors give the asset management team insight into the life cycle of the leased equipment, pending product upgrades and competing products. Key assesses net investments in leases, including residual values, for impairment and recognizes any impairment losses in accordance with the impairment guidance for financial instruments. The carrying amount of residual assets covered by residual value guarantees at December 31, 2023, and December 31, 2022, was $258 million and $270 million, respectively.

At December 31, 2023, minimum future lease payments to be received for sales-type and direct financing leases are as follows:

Dollars in millions			Sales-type and direct financing lease payments
2024			$	823
2025			615
2026			485
2027			316
2028			192
Thereafter			445
Total lease payments			$	2,876

At December 31, 2023, minimum future lease payments to be received for operating leases are as follows:

Dollars in millions			Operating lease payments
2024			$	63
2025			52
2026			36
2027			24
2028			14
Thereafter			32
Total lease payments			$	220

The carrying amount of operating lease assets at December 31, 2023 and December 31, 2022, was $372 million and $505 million, respectively.

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