Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 472 report information sustainability report Governance review review statements Annual Report 2022 Notes to the financial statements (continued) Assets at amortised cost and other investments Finance lease income Finance lease income is included within interest income. The following table shows amounts recognised in the income statement during the year. 2022 2021 £m £m Finance income from net investment in lease 2 21 Profit on sales — 1 As a Lessee The Group leases various offices, branches and other premises under non-cancellable lease arrangements to meet its operational business requirements. In some instances, Barclays will sublease property to third parties when it is no longer needed to meet business requirements. Currently, Barclays does not have any material subleasing arrangements. ROU asset balances relate to property leases only. Refer to Note 20 for the carrying amount of ROU assets. The total expenses recognised during the year for short term leases were £1m (2021: £3m). The portfolio of short term leases to which Barclays is exposed at the end of the year is not dissimilar to the expenses recognised in the year. Lease liabilities 2022 2021 £m £m As at 1 January 1,317 1,444 Interest expense 56 64 New leases 42 43 Disposals (13) (54) Cash payments (239) (258) Exchange and other movements 53 78 As at 31 December (see Note 23) 1,216 1,317 The below table sets out a maturity analysis of undiscounted lease liabilities, showing the lease payments after the reporting date. Undiscounted lease liabilities maturity analysis 2022 2021 £m £m Not more than one year 229 230 One to two years 216 215 Two to three years 193 197 Three to four years 160 182 Four to five years 140 149 Five to ten years 457 503 Greater than ten years 105 163 Total undiscounted lease liabilities as at 31 December 1,500 1,639 In addition to the cash flows identified above, Barclays is exposed to: ▪ Variable lease payments: This variability will typically arise from either inflation index instruments or market-based pricing adjustments. Currently, Barclays has 401 (2021: 609) leases out of the total 896 (2021: 1,111) leases which have variable lease payment terms based on market-based pricing adjustments. Of the gross cash flows identified above, £1,087m (2021: £1,196m) is attributable to leases with some degree of variability predominately linked to market-based pricing adjustments. ▪ Extension and termination options: The table above represents Barclays' best estimate of future cash outflows for leases, including assumptions regarding the exercising of contractual extension and termination options. The above gross cash flows have been reduced by £516m (2021: £434m) for leases where Barclays is highly expected to exercise an early termination option. However, there is no significant impact where Barclays is expected to exercise an extension option. In 2022, the Group recorded a one-off gain of £88m from sale and leaseback (2021: £33m). The Group does not have any restrictions or covenants imposed by the lessor on its property leases which restrict its businesses.