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Accounting Policies (Tables) | 6 Months Ended
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Jun. 30, 2018
Schedule of accounts receivable |
|  | June 30, |  | December 31,
In millions |  | 2018 |  | 2017
Trade receivables |  | $ | 6,611 |  | $ | 7,873
Vendor and manufacturer receivables |  |  | 7,038 |  |  | 5,109
Other receivables |  |  | 509 |  |  | 199
Total accounts receivable, net |  | $ | 14,158 |  | $ | 13,181
Schedule of revenue disaggregation |
|  | Pharmacy |  |  |  | Intersegment |  | Consolidated
In millions |  | Services |  | Retail/LTC |  | Eliminations |  | Totals
Three Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Major goods/services lines: |  |  |  |  |  |  |  |  |  |  |  |
Pharmacy |  | $ | 32,353 |  | $ | 15,805 |  | $ | (7,211) |  | $ | 40,947
Front Store |  |  | — |  |  | 4,707 |  |  | — |  |  | 4,707
Other |  |  | 894 |  |  | 160 |  |  | — |  |  | 1,054
Total |  | $ | 33,247 |  | $ | 20,672 |  | $ | (7,211) |  | $ | 46,708
Pharmacy Services distribution channel: |  |  |  |  |  |  |  |  |  |  |  |
Mail choice (1) |  | $ | 11,787 |  |  |  |  |  |  |  |  |
Pharmacy network (2) |  |  | 20,566 |  |  |  |  |  |  |  |  |
Other |  |  | 894 |  |  |  |  |  |  |  |  |
Total |  | $ | 33,247 |  |  |  |  |  |  |  |  |
Six Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Major goods/services lines: |  |  |  |  |  |  |  |  |  |  |  |
Pharmacy |  | $ | 63,115 |  | $ | 31,305 |  | $ | (14,168) |  | $ | 80,252
Front Store |  |  | — |  |  | 9,433 |  |  | — |  |  | 9,433
Other |  |  | 2,350 |  |  | 366 |  |  | — |  |  | 2,716
Total |  | $ | 65,465 |  | $ | 41,104 |  | $ | (14,168) |  | $ | 92,401
Pharmacy Services distribution channel: |  |  |  |  |  |  |  |  |  |  |  |
Mail choice (1) |  | $ | 22,995 |  |  |  |  |  |  |  |  |
Pharmacy network (2) |  |  | 40,120 |  |  |  |  |  |  |  |  |
Other |  |  | 2,350 |  |  |  |  |  |  |  |  |
Total |  | $ | 65,465 |  |  |  |  |  |  |  |  |
| (1) |  | Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail facility, which includes specialty mail claims inclusive of Specialty Connect® claims picked up at retail, as well as prescriptions filled at our retail pharmacies under the Maintenance Choice® program.
| (2) |  | Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including our retail pharmacies and long-term care pharmacies, but excluding Maintenance Choice activity, which is included within the mail choice category.
Schedule of contract balances and activity | Contract Balances Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, for example ExtraBucks® Rewards and unredeemed CVS Health gift cards. The consideration received remains a contract liability until goods or services have been provided to the retail customer. In addition, the Company recognizes breakage on CVS Health gift cards based on historical redemption patterns. The following table provides information about receivables and contract liabilities from contracts with customers:
|  | June 30, |  | December 31,
In millions |  | 2018 |  | 2017
Trade receivables (included in accounts receivable, net) |  | $ | 6,611 |  | $ | 7,873
Contract liabilities (included in accrued expenses) |  |  | 72 |  |  | 53
During the six months ended June 30, 2018, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of CVS Health gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or CVS Health gift cards and breakage of CVS Health gift cards. Below is a summary of the changes:
In millions |  |
Balance, December 31, 2017 |  | $ | 53
Adoption of ASU 2014-09 |  |  | 17
Loyalty program earnings and gift card issuances |  |  | 166
Redemption and breakage |  |  | (164)
Balance, June 30, 2018 |  | $ | 72
Schedule of new accounting pronouncements and changes in accounting principles |
|  | June 30, |  | December 31,
In millions |  | 2018 |  | 2017
Cash and cash equivalents |  | $ | 43,815 |  | $ | 1,696
Restricted cash (included in other current assets) |  |  | 14 |  |  | 14
Restricted cash (included in other assets) |  |  | 228 |  |  | 190
Total cash, cash equivalents and restricted cash in the statement of cash flows |  | $ | 44,057 |  | $ | 1,900
Reconciliation of condensed consolidated statement of cash flows |
|  | As Previously |  |  |  |  |  |
In millions |  | Reported |  | Adjustments |  | As Revised
Six Months Ended June 30, 2017 |  |  |  |  |  |  |  |  |
Acquisitions (net of cash acquired) and other investments |  | $ | (315) |  | $ | 40 |  | $ | (275)
Net cash used in investing activities |  |  | (1,174) |  |  | 40 |  |  | (1,134)
Net decrease in cash, cash equivalents and restricted cash (1) |  |  | (1,277) |  |  | 40 |  |  | (1,237)
Cash, cash equivalents, and restricted cash at the beginning of the period (1) |  |  | 3,371 |  |  | 149 |  |  | 3,520
Cash, cash equivalents, and restricted cash at the end of the period (1) |  |  | 2,094 |  |  | 189 |  |  | 2,283
| (1) |  | Prior to the adoption of ASU 2016-18, these financial statement captions excluded restricted cash. The financial statement captions have been renamed to reflect the inclusion of restricted cash subsequent to the adoption of ASU 2016-18 on January 1, 2018.
ASU 2014-09 |
Schedule of new accounting pronouncements and changes in accounting principles |
|  | Impact of Change in Accounting Policy
|  | As Reported |  |  |  |  | Adjusted
In millions |  | December 31, 2017 |  | Adjustments |  | January 1, 2018
Condensed Consolidated Balance Sheet: |  |  |  |  |  |  |  |  |
Accrued expenses |  | $ | 6,609 |  | $ | 17 |  | $ | 6,626
Deferred income taxes |  |  | 2,996 |  |  | (4) |  |  | 2,992
Total liabilities |  |  | 57,436 |  |  | 13 |  |  | 57,449
Retained earnings |  |  | 43,556 |  |  | (13) |  |  | 43,543
Total CVS Health shareholders' equity |  |  | 37,691 |  |  | (13) |  |  | 37,678
Total shareholders' equity |  |  | 37,695 |  |  | (13) |  |  | 37,682
The following tables compare the reported condensed consolidated balance sheet, statement of operations, and statement of cash flows, as of and for the three and six months ended June 30, 2018, to the pro forma amounts had the previous revenue accounting guidance remained in effect:
|  | Impact of Change in Accounting Policy
|  | As Reported |  |  |  |  | Balances
|  | For the |  |  |  |  | Without
|  | Three Months Ended |  |  |  |  | Adoption of
In millions |  | June 30, 2018 |  | Adjustments |  | Topic 606
Condensed Consolidated Statement of Operations: |  |  |  |  |  |  |  |  |
Net revenues |  | $ | 46,708 |  | $ | 3 |  | $ | 46,711
Cost of revenues |  |  | 39,507 |  |  | 2 |  |  | 39,509
Gross profit |  |  | 7,201 |  |  | 1 |  |  | 7,202
Operating profit (loss) |  |  | (1,587) |  |  | 1 |  |  | (1,586)
Income (loss) before income tax provision |  |  | (2,065) |  |  | 1 |  |  | (2,064)
Income tax provision |  |  | 497 |  |  | — |  |  | 497
Income (loss) from continuing operations |  |  | (2,562) |  |  | 1 |  |  | (2,561)
Net income (loss) |  |  | (2,563) |  |  | 1 |  |  | (2,562)
Net income (loss) attributable to CVS Health |  |  | (2,563) |  |  | 1 |  |  | (2,562)
|  | Impact of Change in Accounting Policy
|  | As Reported |  |  |  |  | Balances
|  | As of/For the |  |  |  |  | Without
|  | Six Months Ended |  |  |  |  | Adoption of
In millions |  | June 30, 2018 |  | Adjustments |  | Topic 606
Condensed Consolidated Statement of Operations: |  |  |  |  |  |  |  |  |
Net revenues |  | $ | 92,401 |  | $ | 10 |  | $ | 92,411
Cost of revenues |  |  | 78,341 |  |  | 6 |  |  | 78,347
Gross profit |  |  | 14,060 |  |  | 4 |  |  | 14,064
Operating profit |  |  | 359 |  |  | 4 |  |  | 363
Income (loss) before income tax provision |  |  | (595) |  |  | 4 |  |  | (591)
Income tax provision |  |  | 969 |  |  | 1 |  |  | 970
Income (loss) from continuing operations |  |  | (1,564) |  |  | 3 |  |  | (1,561)
Net income (loss) |  |  | (1,565) |  |  | 3 |  |  | (1,562)
Net income (loss) attributable to CVS Health |  |  | (1,565) |  |  | 3 |  |  | (1,562)
Condensed Consolidated Balance Sheet: |  |  |  |  |  |  |  |  |
Accrued expenses |  |  | 7,640 |  |  | (21) |  |  | 7,619
Deferred income taxes |  |  | 3,054 |  |  | 5 |  |  | 3,059
Total liabilities |  |  | 97,679 |  |  | (16) |  |  | 97,663
Retained earnings |  |  | 40,965 |  |  | 16 |  |  | 40,981
Total CVS Health shareholders' equity |  |  | 35,607 |  |  | 16 |  |  | 35,623
Total shareholders' equity |  |  | 35,611 |  |  | 16 |  |  | 35,627
Condensed Consolidated Statement of Cash Flow: |  |  |  |  |  |  |  |  |
Reconciliation of net income (loss) to net cash provided by operating activities: |  |  |  |  |  |  |  |  |
Net income (loss) |  |  | (1,565) |  |  | 3 |  |  | (1,562)
Deferred income taxes and other noncash items |  |  | 252 |  |  | 1 |  |  | 253
Accrued expenses |  |  | 1,143 |  |  | (4) |  |  | 1,139

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