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Leases
 12 Months Ended
Dec. 31, 2021
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 millionsDecember 31, 2021December 31, 2020
Operating lease cost$133 $135 
Finance lease cost:
Amortization of right-of-use assets2 2 
Interest on lease liabilities— 1 
Variable lease cost22 20 
Total lease cost (a)
$157 $158 
(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2021, and December 31, 2020

Cash flows related to leases are summarized as follows:
Dollars in millionsDecember 31, 2021December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$— $1 
Operating cash flows from operating leases141 143 
Financing cash flows from finance leases2 2 
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases$85 $86 
(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2021 or December 31, 2020.

Additional balance sheet information related to leases is summarized as follows:
Dollars in millionsBalance sheet classificationDecember 31, 2021December 31, 2020
Operating lease assetsAccrued income and other assets$595 $630 
Operating lease liabilitiesAccrued expense and other liabilities676 711 
Finance leases:
Property and equipment, grossPremises and equipment18 28 
Accumulated depreciationPremises and equipment(13)(19)
Property and equipment, net5 9 
Finance lease liabilitiesLong-term debt7 11 

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:
December 31, 2021December 31, 2020
Weighted-average remaining lease term:
Operating leases6.567.09
Finance leases5.335.03
Weighted-average discount rate:
Operating leases2.78 %3.01 %
Finance leases4.50 %3.94 %

Maturities of lease liabilities are summarized as follows:
Dollars in millionsOperating LeasesFinance LeasesTotal
2022$138 $2 $140 
2023130 2 132 
2024115 2 117 
202596 1 97 
202680 — 80 
Thereafter187 2 189 
Total lease payments746 9 755 
Less imputed interest70 2 72 
Total$676 $7 $683 
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 millionsDecember 31, 2021December 31, 2020
Sales-type and direct financing leases
Interest income on lease receivable$75 $119 
 Interest income related to accretion of unguaranteed residual asset16 (3)
Total sales-type and direct financing lease income91 116 
Operating leases
Operating lease income related to lease payments127 136 
Other operating leasing gains21 31 
Total operating lease income and other leasing gains148 167 
Total lease income$239 $283 

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 millionsDecember 31, 2021December 31, 2020
Lease receivables$3,205 $3,570 
Unearned income(193)(257)
Unguaranteed residual value450 478 
Deferred fees and costs14 8 
Net investment in sales-type and direct financing leases$3,476 $3,799 

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, 2021, and December 31, 2020, was $255 million and $269 million, respectively.

At December 31, 2021, minimum future lease payments to be received for sales-type and direct financing leases are as follows:
Dollars in millionsSales-type and direct financing lease payments
2022$970 
2023725 
2024501 
2025327 
2026239 
Thereafter444 
Total lease payments$3,206 
At December 31, 2021, minimum future lease payments to be received for operating leases are as follows:
Dollars in millionsOperating lease payments
2022$110 
202392 
202479 
202566 
202650 
Thereafter84 
Total lease payments$480 
The carrying amount of operating lease assets at December 31, 2021 and December 31, 2020, was $740 million and $859 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 millionsDecember 31, 2021December 31, 2020
Operating lease cost$133 $135 
Finance lease cost:
Amortization of right-of-use assets2 2 
Interest on lease liabilities— 1 
Variable lease cost22 20 
Total lease cost (a)
$157 $158 
(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2021, and December 31, 2020

Cash flows related to leases are summarized as follows:
Dollars in millionsDecember 31, 2021December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$— $1 
Operating cash flows from operating leases141 143 
Financing cash flows from finance leases2 2 
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases$85 $86 
(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2021 or December 31, 2020.

Additional balance sheet information related to leases is summarized as follows:
Dollars in millionsBalance sheet classificationDecember 31, 2021December 31, 2020
Operating lease assetsAccrued income and other assets$595 $630 
Operating lease liabilitiesAccrued expense and other liabilities676 711 
Finance leases:
Property and equipment, grossPremises and equipment18 28 
Accumulated depreciationPremises and equipment(13)(19)
Property and equipment, net5 9 
Finance lease liabilitiesLong-term debt7 11 

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:
December 31, 2021December 31, 2020
Weighted-average remaining lease term:
Operating leases6.567.09
Finance leases5.335.03
Weighted-average discount rate:
Operating leases2.78 %3.01 %
Finance leases4.50 %3.94 %

Maturities of lease liabilities are summarized as follows:
Dollars in millionsOperating LeasesFinance LeasesTotal
2022$138 $2 $140 
2023130 2 132 
2024115 2 117 
202596 1 97 
202680 — 80 
Thereafter187 2 189 
Total lease payments746 9 755 
Less imputed interest70 2 72 
Total$676 $7 $683 
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 millionsDecember 31, 2021December 31, 2020
Sales-type and direct financing leases
Interest income on lease receivable$75 $119 
 Interest income related to accretion of unguaranteed residual asset16 (3)
Total sales-type and direct financing lease income91 116 
Operating leases
Operating lease income related to lease payments127 136 
Other operating leasing gains21 31 
Total operating lease income and other leasing gains148 167 
Total lease income$239 $283 

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 millionsDecember 31, 2021December 31, 2020
Lease receivables$3,205 $3,570 
Unearned income(193)(257)
Unguaranteed residual value450 478 
Deferred fees and costs14 8 
Net investment in sales-type and direct financing leases$3,476 $3,799 

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, 2021, and December 31, 2020, was $255 million and $269 million, respectively.

At December 31, 2021, minimum future lease payments to be received for sales-type and direct financing leases are as follows:
Dollars in millionsSales-type and direct financing lease payments
2022$970 
2023725 
2024501 
2025327 
2026239 
Thereafter444 
Total lease payments$3,206 
At December 31, 2021, minimum future lease payments to be received for operating leases are as follows:
Dollars in millionsOperating lease payments
2022$110 
202392 
202479 
202566 
202650 
Thereafter84 
Total lease payments$480 
The carrying amount of operating lease assets at December 31, 2021 and December 31, 2020, was $740 million and $859 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 millionsDecember 31, 2021December 31, 2020
Operating lease cost$133 $135 
Finance lease cost:
Amortization of right-of-use assets2 2 
Interest on lease liabilities— 1 
Variable lease cost22 20 
Total lease cost (a)
$157 $158 
(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2021, and December 31, 2020

Cash flows related to leases are summarized as follows:
Dollars in millionsDecember 31, 2021December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$— $1 
Operating cash flows from operating leases141 143 
Financing cash flows from finance leases2 2 
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases$85 $86 
(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2021 or December 31, 2020.

Additional balance sheet information related to leases is summarized as follows:
Dollars in millionsBalance sheet classificationDecember 31, 2021December 31, 2020
Operating lease assetsAccrued income and other assets$595 $630 
Operating lease liabilitiesAccrued expense and other liabilities676 711 
Finance leases:
Property and equipment, grossPremises and equipment18 28 
Accumulated depreciationPremises and equipment(13)(19)
Property and equipment, net5 9 
Finance lease liabilitiesLong-term debt7 11 

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:
December 31, 2021December 31, 2020
Weighted-average remaining lease term:
Operating leases6.567.09
Finance leases5.335.03
Weighted-average discount rate:
Operating leases2.78 %3.01 %
Finance leases4.50 %3.94 %

Maturities of lease liabilities are summarized as follows:
Dollars in millionsOperating LeasesFinance LeasesTotal
2022$138 $2 $140 
2023130 2 132 
2024115 2 117 
202596 1 97 
202680 — 80 
Thereafter187 2 189 
Total lease payments746 9 755 
Less imputed interest70 2 72 
Total$676 $7 $683 
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 millionsDecember 31, 2021December 31, 2020
Sales-type and direct financing leases
Interest income on lease receivable$75 $119 
 Interest income related to accretion of unguaranteed residual asset16 (3)
Total sales-type and direct financing lease income91 116 
Operating leases
Operating lease income related to lease payments127 136 
Other operating leasing gains21 31 
Total operating lease income and other leasing gains148 167 
Total lease income$239 $283 

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 millionsDecember 31, 2021December 31, 2020
Lease receivables$3,205 $3,570 
Unearned income(193)(257)
Unguaranteed residual value450 478 
Deferred fees and costs14 8 
Net investment in sales-type and direct financing leases$3,476 $3,799 

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, 2021, and December 31, 2020, was $255 million and $269 million, respectively.

At December 31, 2021, minimum future lease payments to be received for sales-type and direct financing leases are as follows:
Dollars in millionsSales-type and direct financing lease payments
2022$970 
2023725 
2024501 
2025327 
2026239 
Thereafter444 
Total lease payments$3,206 
At December 31, 2021, minimum future lease payments to be received for operating leases are as follows:
Dollars in millionsOperating lease payments
2022$110 
202392 
202479 
202566 
202650 
Thereafter84 
Total lease payments$480 
The carrying amount of operating lease assets at December 31, 2021 and December 31, 2020, was $740 million and $859 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 millionsDecember 31, 2021December 31, 2020
Operating lease cost$133 $135 
Finance lease cost:
Amortization of right-of-use assets2 2 
Interest on lease liabilities— 1 
Variable lease cost22 20 
Total lease cost (a)
$157 $158 
(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2021, and December 31, 2020

Cash flows related to leases are summarized as follows:
Dollars in millionsDecember 31, 2021December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$— $1 
Operating cash flows from operating leases141 143 
Financing cash flows from finance leases2 2 
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases$85 $86 
(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2021 or December 31, 2020.

Additional balance sheet information related to leases is summarized as follows:
Dollars in millionsBalance sheet classificationDecember 31, 2021December 31, 2020
Operating lease assetsAccrued income and other assets$595 $630 
Operating lease liabilitiesAccrued expense and other liabilities676 711 
Finance leases:
Property and equipment, grossPremises and equipment18 28 
Accumulated depreciationPremises and equipment(13)(19)
Property and equipment, net5 9 
Finance lease liabilitiesLong-term debt7 11 

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:
December 31, 2021December 31, 2020
Weighted-average remaining lease term:
Operating leases6.567.09
Finance leases5.335.03
Weighted-average discount rate:
Operating leases2.78 %3.01 %
Finance leases4.50 %3.94 %

Maturities of lease liabilities are summarized as follows:
Dollars in millionsOperating LeasesFinance LeasesTotal
2022$138 $2 $140 
2023130 2 132 
2024115 2 117 
202596 1 97 
202680 — 80 
Thereafter187 2 189 
Total lease payments746 9 755 
Less imputed interest70 2 72 
Total$676 $7 $683 
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 millionsDecember 31, 2021December 31, 2020
Sales-type and direct financing leases
Interest income on lease receivable$75 $119 
 Interest income related to accretion of unguaranteed residual asset16 (3)
Total sales-type and direct financing lease income91 116 
Operating leases
Operating lease income related to lease payments127 136 
Other operating leasing gains21 31 
Total operating lease income and other leasing gains148 167 
Total lease income$239 $283 

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 millionsDecember 31, 2021December 31, 2020
Lease receivables$3,205 $3,570 
Unearned income(193)(257)
Unguaranteed residual value450 478 
Deferred fees and costs14 8 
Net investment in sales-type and direct financing leases$3,476 $3,799 

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, 2021, and December 31, 2020, was $255 million and $269 million, respectively.

At December 31, 2021, minimum future lease payments to be received for sales-type and direct financing leases are as follows:
Dollars in millionsSales-type and direct financing lease payments
2022$970 
2023725 
2024501 
2025327 
2026239 
Thereafter444 
Total lease payments$3,206 
At December 31, 2021, minimum future lease payments to be received for operating leases are as follows:
Dollars in millionsOperating lease payments
2022$110 
202392 
202479 
202566 
202650 
Thereafter84 
Total lease payments$480 
The carrying amount of operating lease assets at December 31, 2021 and December 31, 2020, was $740 million and $859 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 millionsDecember 31, 2021December 31, 2020
Operating lease cost$133 $135 
Finance lease cost:
Amortization of right-of-use assets2 2 
Interest on lease liabilities— 1 
Variable lease cost22 20 
Total lease cost (a)
$157 $158 
(a)Short-term lease cost was less than $1 million for both the twelve months ended December 31, 2021, and December 31, 2020

Cash flows related to leases are summarized as follows:
Dollars in millionsDecember 31, 2021December 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases$— $1 
Operating cash flows from operating leases141 143 
Financing cash flows from finance leases2 2 
Right-of-use assets obtained in exchange for lease obligations: (a)
Operating leases$85 $86 
(a)There were no right-of-use assets obtained in exchange for finance lease obligations for either the twelve months ended December 31, 2021 or December 31, 2020.

Additional balance sheet information related to leases is summarized as follows:
Dollars in millionsBalance sheet classificationDecember 31, 2021December 31, 2020
Operating lease assetsAccrued income and other assets$595 $630 
Operating lease liabilitiesAccrued expense and other liabilities676 711 
Finance leases:
Property and equipment, grossPremises and equipment18 28 
Accumulated depreciationPremises and equipment(13)(19)
Property and equipment, net5 9 
Finance lease liabilitiesLong-term debt7 11 

Information pertaining to the lease term and weighted-average discount rate is summarized as follows:
December 31, 2021December 31, 2020
Weighted-average remaining lease term:
Operating leases6.567.09
Finance leases5.335.03
Weighted-average discount rate:
Operating leases2.78 %3.01 %
Finance leases4.50 %3.94 %

Maturities of lease liabilities are summarized as follows:
Dollars in millionsOperating LeasesFinance LeasesTotal
2022$138 $2 $140 
2023130 2 132 
2024115 2 117 
202596 1 97 
202680 — 80 
Thereafter187 2 189 
Total lease payments746 9 755 
Less imputed interest70 2 72 
Total$676 $7 $683 
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 millionsDecember 31, 2021December 31, 2020
Sales-type and direct financing leases
Interest income on lease receivable$75 $119 
 Interest income related to accretion of unguaranteed residual asset16 (3)
Total sales-type and direct financing lease income91 116 
Operating leases
Operating lease income related to lease payments127 136 
Other operating leasing gains21 31 
Total operating lease income and other leasing gains148 167 
Total lease income$239 $283 

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 millionsDecember 31, 2021December 31, 2020
Lease receivables$3,205 $3,570 
Unearned income(193)(257)
Unguaranteed residual value450 478 
Deferred fees and costs14 8 
Net investment in sales-type and direct financing leases$3,476 $3,799 

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, 2021, and December 31, 2020, was $255 million and $269 million, respectively.

At December 31, 2021, minimum future lease payments to be received for sales-type and direct financing leases are as follows:
Dollars in millionsSales-type and direct financing lease payments
2022$970 
2023725 
2024501 
2025327 
2026239 
Thereafter444 
Total lease payments$3,206 
At December 31, 2021, minimum future lease payments to be received for operating leases are as follows:
Dollars in millionsOperating lease payments
2022$110 
202392 
202479 
202566 
202650 
Thereafter84 
Total lease payments$480 
The carrying amount of operating lease assets at December 31, 2021 and December 31, 2020, was $740 million and $859 million, respectively.