CVS HEALTH CorpCVS

CVS HEALTH Corp Leases Disclosure

10-KFiled Feb 10, 20263 min read
Leases
The Company leases most of its retail stores, mail order facilities and primary care centers, as well as certain distribution centers and corporate offices under operating or finance leases, typically with initial terms of 15 to 25 years. The Company also leases certain equipment and other assets under operating or finance leases, typically with initial terms of 3 to 10 years.

In addition, the Company leases pharmacy space at the stores of another retail chain for which the noncancelable contractual term of the pharmacy lease arrangement exceeds the remaining estimated economic life of the buildings. For these pharmacy lease arrangements, the Company concluded that for accounting purposes the lease term was the remaining estimated economic life of the buildings. Consequently, most of these individual pharmacy leases are finance leases.

The following table is a summary of the components of net lease cost for the years ended December 31, 2025, 2024 and 2023:
In millions202520242023
Operating lease cost$2,403 $2,423 $2,532 
Finance lease cost:
Amortization of right-of-use assets90 92 84 
Interest on lease liabilities69 71 73 
Total finance lease costs159 163 157 
Short-term lease costs36 33 22 
Variable lease costs646 635 635 
Less: sublease income(69)(67)(63)
Net lease cost$3,175 $3,187 $3,283 

Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 was as follows:
In millions202520242023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases$2,705 $2,733 $2,756 
Operating cash flows paid for interest portion of finance leases69 71 73 
Financing cash flows paid for principal portion of finance leases77 74 70 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases785 852 1,132 
Finance leases35 30 (4)
Supplemental balance sheet information related to leases as of December 31, 2025 and 2024 is as follows:
In millions, except remaining lease term and discount rate20252024
Operating leases:
Operating lease right-of-use assets
$14,973$15,944
Current portion of operating lease liabilities$1,737$1,751
Long-term operating lease liabilities13,64314,899
Total operating lease liabilities
$15,380$16,650
Finance leases:
Property and equipment, gross$1,622$1,587
Accumulated depreciation(528)(447)
Property and equipment, net$1,094$1,140
Current portion of long-term debt$61$65
Long-term debt1,2651,295
Total finance lease liabilities$1,326$1,360
Weighted average remaining lease term (in years)
Operating leases10.010.7
Finance leases15.716.5
Weighted average discount rate
Operating leases4.7 %4.6 %
Finance leases5.1 %5.1 %

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2025:
In millionsFinance
Leases
Operating
Leases (1)
Total
2026$139 $2,626 $2,765 
2027136 2,475 2,611 
2028133 2,300 2,433 
2029132 2,031 2,163 
2030129 1,789 1,918 
Thereafter1,291 8,166 9,457 
Total lease payments (2)
1,960 19,387 21,347 
Less: imputed interest(634)(4,007)(4,641)
Total lease liabilities$1,326 $15,380 $16,706 
_____________________________________________
(1)Future operating lease payments have not been reduced by minimum sublease rentals of $298 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 $2.3 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.

Historical Timeline

Fiscal YearFiled
2025Feb 10, 2026Showing above
2024Feb 12, 2025
2023Feb 7, 2024
2022Feb 8, 2023
2021Feb 9, 2022
2020Feb 16, 2021
2019Feb 18, 2020
2018Feb 28, 2019
2017Feb 14, 2018
2016Feb 9, 2017
2015Feb 9, 2016

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

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