Leases

6 Months Ended

Jun. 30, 2024

9. LEASES

The Company utilizes operating and finance leases for the use of certain hospitals, medical office buildings, and medical equipment. The components of lease cost and rent expense for the three and six months ended June 30, 2024 and 2023 are as follows (in millions):


	Three Months Ended June 30,						Six Months Ended June 30,
Lease Cost	2024			2023			2024			2023
Operating lease cost:
Operating lease cost	$	46		$	53		$	94		$	108
Short-term rent expense		22			22			45			44
Variable lease cost		6			6			14			12
Sublease income		(1	)		(1	)		(2	)		(3	)
Total operating lease cost	$	73		$	80		$	151		$	161
Finance lease cost:
Amortization of right-of-use assets	$	3		$	3		$	5		$	6
Interest on finance lease liabilities		3			3			7			7
Total finance lease cost	$	6		$	6		$	12		$	13

Supplemental balance sheet information related to leases is as follows (in millions):


	Balance Sheet Classification	June 30, 2024			December 31, 2023
Operating Leases:
Operating lease right-of-use assets	Other assets, net	$	634		$	665

Finance Leases:
Finance lease right-of-use assets	Property and equipment
	Land and improvements	$	—		$	—
	Buildings and improvements		248			246
	Equipment and fixtures		9			10
	Property and equipment		257			256
	Less accumulated depreciation and amortization		(57	)		(55	)
	Property and equipment, net	$	200		$	201

Current finance lease liabilities	Current maturities of long-term debt	$	2		$	2
Long-term finance lease liabilities	Long-term debt		216			214

Supplemental cash flow information related to leases for the six months ended June 30, 2024 and 2023 is as follows (in millions):


	Six Months Ended June 30,
Cash flow information	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (1)	$	91	$	103
Operating cash flows from finance leases		7		7
Financing cash flows from finance leases		2		2
Right-of-use assets obtained in exchange for new finance lease liabilities		3		—
Right-of-use assets obtained in exchange for new operating lease liabilities		32		49

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(1)

Included in the change in other operating assets and liabilities in the condensed consolidated statements of cash flows.