Leases

6 Months Ended

Jun. 30, 2022

Leases

Leases

10. Leases:

Accounting for Leases as a Lessor

The following table presents amounts included in the Consolidated Income Statement related to lessor activity:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in millions)	2022		2021		2022		2021
Lease income — sales-type and direct financing leases:
Sales-type lease selling price	$	735	$	390	$	789	$	751
Less: Carrying value of underlying assets*		(120)		(100)		(139)		(157)
Gross profit	$	615	$	290	$	651	$	594
Interest income on lease receivables		45		47		90		98
Total sales-type and direct financing lease income	$	660	$	337	$	741	$	692
Lease income — operating leases		27		47		56		98
Variable lease income		28		22		56		79
Total lease income	$	715	$	406	$	853	$	869

* Excludes unguaranteed residual value.

Sales-type lease revenue was $735 million and $789 million for the three and six months ended June 30, 2022, respectively, compared to $390 million and $751 million for the three and six months ended June 30, 2021, respectively. The increases in both the three and six month periods were predominantly due to the zSystems product cycle dynamics.