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Leases (Tables)

12 Months Ended

Dec. 31, 2019

Lease costs and supplemental cash flow information

The following table is a summary of the components of net lease cost for the year ended December 31, 2019:



In millions	2019
Operating lease cost	$	2,720
Finance lease cost:
Amortization of right-of-use assets	38
Interest on lease liabilities	44
Total finance lease costs	82
Short-term lease costs	24
Variable lease costs	581
Less: sublease income	50
Net lease cost	$	3,357

Supplemental cash flow information related to leases for the year ended December 31, 2019 is as follows:



In millions	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	2,701
Operating cash flows paid for interest portion of finance leases	44
Financing cash flows paid for principal portion of finance leases	26
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,824
Finance leases	283

Supplemental balance sheet information

Supplemental balance sheet information related to leases as of December 31, 2019 is as follows:



In millions, except remaining lease term and discount rate
Operating leases:
Operating lease right-of-use assets	$	20,860

Current portion of operating lease liabilities	$	1,596
Long-term operating lease liabilities	18,926
Total operating lease liabilities	$	20,522

Finance leases:⁽¹⁾
Property and equipment, gross	$	790
Accumulated depreciation ⁽²⁾	(38		)
Property and equipment, net	$	752

Current portion of long-term debt	$	27
Long-term debt	781
Total finance lease liabilities	$	808

Weighted average remaining lease term (in years)
Operating leases	13.8
Finance leases	20.5

Weighted average discount rate
Operating leases	4.6		%
Finance leases	6.7		%

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(1)	Finance lease right-of-use assets are included within property and equipment, net and the respective finance lease liabilities are included in current portion of long-term debt and long-term debt on the consolidated balance sheets.


(2)	In accordance with ASC 842, upon adoption the net carrying value of the prior capital leases became the initial basis of the Company’s finance leases. As a result, upon adoption there was no accumulated amortization associated with such finance leases.

Maturities of operating lease liabilities

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

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(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

The Company leases pharmacy and clinic space from Target Corporation. Amounts related to such finance and operating leases are reflected above. Pharmacy lease amounts due in excess of the remaining estimated economic life of the buildings of approximately $2.2 billion are not reflected in this table since the estimated economic life of the buildings is shorter than the contractual term of the pharmacy lease arrangement.

Maturities of financing lease liabilities

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

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(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

Schedule of net rental expense

The following table is a summary of the Company’s net rental expense for operating leases for the years ended December 31, 2018 and 2017:



In millions	2018			2017
Minimum rentals	$	2,528		$	2,455
Contingent rentals	28			29
Rental expense	2,556			2,484
Less: sublease income	(21		)	(24		)
Total rental expense, net	$	2,535		$	2,460

Schedule of capital leased assets

The amount of property and equipment under capital leases at December 31, 2018 was as follows:



In millions	2018
Property and equipment under capital leases	$	582
Accumulated amortization of property and equipment under capital leases	(163		)
Property and equipment under capital leases, net	$	419