Leases

3 Months Ended

Dec. 31, 2019

The Company enters into various non-cancelable operating leases for certain facilities, including corporate offices, retail branches and data centers. The Company determines if an arrangement is a lease at inception. Operating leases with an initial term of 12 months or less are not recorded on the balance sheet and the related lease expense is recognized on a straight-line basis over the lease term. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement or remeasurement date of a lease based on the present value of lease payments over the lease term. The Company utilizes an incremental borrowing rate to determine the present value of lease payments for each lease, as the lease agreements do not provide an implicit rate. The estimated incremental borrowing rate reflects a secured rate and is based on the term of the lease and the interest rate environment at the lease commencement or remeasurement date. Operating lease ROU assets include (1) lease payments made at or before the commencement date and (2) initial indirect costs; and exclude lease incentives. The Company's lease terms may include options to extend or terminate the lease. Only those renewal and termination options which the Company is reasonably certain of exercising are included in the calculation of the lease liability.

The following tables present balance sheet and supplemental operating lease information (dollars in millions):



	December 31, 2019
Balance Sheet Information:
Assets:
Other assets:
Operating lease right-of-use assets, net	$	340
Liabilities:
Accounts payable and other liabilities:
Operating lease liabilities	$	373
Supplemental Information:
Weighted-average remaining lease term (years)	8.3
Weighted-average discount rate	2.49		%



	Three Months Ended December 31, 2019
Supplemental Cash Flow Information:
Cash paid for amounts included in the measurement of lease liabilities	$	17
Lease liabilities arising from obtaining right-of-use assets	$	8

The following table summarizes the amount and classification of operating lease expense (dollars in millions):


(1)	Includes short-term lease costs and is net of sublease income. The short-term lease costs and sublease income are not material for the period presented. Operating lease costs and sublease income include transactions with related parties, which are not material for the period presented.

Operating lease expense is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

The following table presents the maturities of lease liabilities as of December 31, 2019 (dollars in millions):



Fiscal Year	Operating Leases
2020 Remaining	$	25
2021	61
2022	54
2023	47
2024	44
Thereafter (to 2033)	192
Total lease payments	423
Amount representing interest	(50		)
Present value of lease liabilities	$	373

In accordance with the disclosure requirements for the adoption of ASU 2016-02, the Company is presenting its operating lease commitment table as of September 30, 2019, which was previously disclosed in Note 16 of the Company's annual report on Form 10-K for the fiscal year ended September 30, 2019 (dollars in millions):



Fiscal Year	Minimum Lease Payments		Sublease Income			Net Lease Commitments
2020	$	72	$	(2	)	$	70
2021	64		(1		)	63
2022	55		—			55
2023	49		—			49
2024	45		—			45
Thereafter (to 2033)	191		—			191
Total	$	476	$	(3	)	$	473

Description

Condensed Consolidated
Statements of Income Classification

Three Months Ended
December 31, 2019

Operating lease costs, net ⁽¹⁾

Occupancy and equipment costs