Leases Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

Leases

As discussed in Note 2, “Significant Accounting Policies,” we elected the Topic 842 transition provision that allows entities to continue to apply the legacy guidance in Topic 840, Leases, including its disclosure requirements, in the comparative periods presented in the year of adoption. Accordingly, the Topic 842 disclosures below are presented as of and for the year ended December 31, 2019, only.

We are a party to operating and finance leases primarily for our corporate and health plan offices. Our operating leases have remaining lease terms up to 9 years, some of which include options to extend the leases for up to 10 years. As of December 31, 2019, the weighted average remaining operating lease term is 4 years.

Our finance leases have remaining lease terms of 2 years to 19 years, some of which include options to extend the leases for up to 25 years. As of December 31, 2019, the weighted average remaining finance lease term is 16 years.

As of December 31, 2019, the weighted-average discount rate used to compute the present value of lease payments was 5.6% for operating lease liabilities, and 6.5% for finance lease liabilities. The components of lease expense were as follows:

	Year Ended December 31, 2019
	(In millions)
Operating lease expense	$	34
Finance lease expense:
Amortization of ROU assets	$	17
Interest on lease liabilities	15
Total finance lease expense	$	32

Rental expense related to operating leases amounted to $62 million and $75 million for the years ended December 31, 2018 and 2017, respectively.

Supplemental consolidated cash flow information related to leases follows:

	Year Ended December 31, 2019
	(In millions)
Cash used in operating activities:
Operating leases	$	36
Finance leases	15
Cash used in financing activities:
Finance leases	6
ROU assets recognized in exchange for lease obligations:
Operating leases	99
Finance leases	245

Supplemental information related to leases, including location of amounts reported in the accompanying consolidated balance sheets, follows:

	December 31, 2019
	(In millions)
Operating leases:
ROU assets
Other assets	$	65
Lease liabilities
Accounts payable and accrued liabilities (current)	$	25
Other long-term liabilities (non-current)	48
Total operating lease liabilities	$	73
Finance leases:
ROU assets
Property, equipment, and capitalized software, net	$	228
Lease liabilities
Accounts payable and accrued liabilities (current)	$	8
Finance lease liabilities (non-current)	231
Total finance lease liabilities	$	239

Maturities of lease liabilities as of December 31, 2019, were as follows:

	Operating Leases			Finance Leases
	(In millions)
2020	$	28		$	23
2021	20			24
2022	14			21
2023	10			21
2024	5			22
Thereafter	3			289
Subtotal - undiscounted lease payments	80			400
Less imputed interest	(7		)	(161		)
Total	$	73		$	239

Leases

Leases

As discussed in Note 2, “Significant Accounting Policies,” we elected the Topic 842 transition provision that allows entities to continue to apply the legacy guidance in Topic 840, Leases, including its disclosure requirements, in the comparative periods presented in the year of adoption. Accordingly, the Topic 842 disclosures below are presented as of and for the year ended December 31, 2019, only.

We are a party to operating and finance leases primarily for our corporate and health plan offices. Our operating leases have remaining lease terms up to 9 years, some of which include options to extend the leases for up to 10 years. As of December 31, 2019, the weighted average remaining operating lease term is 4 years.

Our finance leases have remaining lease terms of 2 years to 19 years, some of which include options to extend the leases for up to 25 years. As of December 31, 2019, the weighted average remaining finance lease term is 16 years.

As of December 31, 2019, the weighted-average discount rate used to compute the present value of lease payments was 5.6% for operating lease liabilities, and 6.5% for finance lease liabilities. The components of lease expense were as follows:

	Year Ended December 31, 2019
	(In millions)
Operating lease expense	$	34
Finance lease expense:
Amortization of ROU assets	$	17
Interest on lease liabilities	15
Total finance lease expense	$	32

Rental expense related to operating leases amounted to $62 million and $75 million for the years ended December 31, 2018 and 2017, respectively.

Supplemental consolidated cash flow information related to leases follows:

	Year Ended December 31, 2019
	(In millions)
Cash used in operating activities:
Operating leases	$	36
Finance leases	15
Cash used in financing activities:
Finance leases	6
ROU assets recognized in exchange for lease obligations:
Operating leases	99
Finance leases	245

Supplemental information related to leases, including location of amounts reported in the accompanying consolidated balance sheets, follows:

	December 31, 2019
	(In millions)
Operating leases:
ROU assets
Other assets	$	65
Lease liabilities
Accounts payable and accrued liabilities (current)	$	25
Other long-term liabilities (non-current)	48
Total operating lease liabilities	$	73
Finance leases:
ROU assets
Property, equipment, and capitalized software, net	$	228
Lease liabilities
Accounts payable and accrued liabilities (current)	$	8
Finance lease liabilities (non-current)	231
Total finance lease liabilities	$	239

Maturities of lease liabilities as of December 31, 2019, were as follows:

	Operating Leases			Finance Leases
	(In millions)
2020	$	28		$	23
2021	20			24
2022	14			21
2023	10			21
2024	5			22
Thereafter	3			289
Subtotal - undiscounted lease payments	80			400
Less imputed interest	(7		)	(161		)
Total	$	73		$	239