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v3.19.1

Segment Information (Tables) | 3 Months Ended
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Mar. 31, 2019 | Mar. 31, 2018
Segment Reporting [Abstract] |  |
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] |  | Effective for the first quarter of 2019, the Company realigned the composition of its segments to correspond with changes to its operating model and reflect how the CODM reviews information and manages the business. See Note 1 ‘‘Significant Accounting Policies’’ for further discussion. Segment financial information for the three months ended March 31, 2018, has been retrospectively adjusted to reflect these changes as shown below:
| Three Months Ended March 31, 2018
| Pharmacy |  | Retail/ |  | Health Care |  | Corporate/ |  | Intersegment |  | Consolidated
In millions | Services |  | LTC |  | Benefits |  | Other |  | Eliminations |  | Totals
Revenues, as previously reported | $ | 32,220 |  |  | $ | 20,432 |  |  | $ | — |  |  | $ | 48 |  |  | $ | (6,957 | ) |  | $ | 45,743 |
Adjustments | 326 |  |  | — |  |  | 1,318 |  |  | — |  |  | (1,644 | ) |  | — |
Revenues, as adjusted | $ | 32,546 |  |  | $ | 20,432 |  |  | $ | 1,318 |  |  | $ | 48 |  |  | $ | (8,601 | ) |  | $ | 45,743 |
Cost of products sold (1) | $ | 29,751 |  |  | $ | 14,516 |  |  | $ | — |  |  | $ | — |  |  | $ | (6,762 | ) |  | $ | 37,505 |
Adjustments | 1,556 |  |  | — |  |  | — |  |  | — |  |  | (1,556 | ) |  | — |
Cost of products sold | $ | 31,307 |  |  | $ | 14,516 |  |  | $ | — |  |  | $ | — |  |  | (8,318 | ) |  | $ | 37,505 |
Benefit costs (1) | $ | 1,329 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,329 |
Adjustments | (1,329 | ) |  | — |  |  | 1,329 |  |  | — |  |  | — |  |  | — |
Benefit costs | $ | — |  |  | $ | — |  |  | $ | 1,329 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,329 |
Operating expenses, as previously reported | $ | 377 |  |  | $ | 4,292 |  |  | $ | — |  |  | $ | 264 |  |  | $ | (20 | ) |  | $ | 4,913 |
Adjustments | (39 | ) |  | — |  |  | 127 |  |  | — |  |  | (88 | ) |  | — |
Operating expenses, as adjusted | $ | 338 |  |  | $ | 4,292 |  |  | $ | 127 |  |  | $ | 264 |  |  | $ | (108 | ) |  | $ | 4,913 |
Operating income (loss), as previously reported | $ | 763 |  |  | $ | 1,624 |  |  | $ | — |  |  | $ | (216 | ) |  | $ | (175 | ) |  | $ | 1,996 |
Adjustments | 138 |  |  | — |  |  | (138 | ) |  | — |  |  | — |  |  | — |
Operating income (loss), as adjusted | 901 |  |  | 1,624 |  |  | (138 | ) |  | (216 | ) |  | (175 | ) |  | 1,996 |
Adjustments | 86 |  |  | 212 |  |  | 1 |  |  | (2 | ) |  | — |  |  | 297 |
Adjusted operating income (loss) | $ | 987 |  |  | $ | 1,836 |  |  | $ | (137 | ) |  | $ | (218 | ) |  | $ | (175 | ) |  | $ | 2,293 |
_____________________________________________
(1) | The total of cost of products sold and benefit costs were previously reported as cost of revenues.
Summarized financial information of segments | The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals:
| Pharmacy |  | Retail/ |  | Health Care |  | Corporate/ |  | Intersegment |  | Consolidated
In millions | Services(1) |  | LTC |  | Benefits |  | Other |  | Eliminations(2) |  | Totals
Three Months Ended |  |  |  |  |  |  |  |  |  |  |
March 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 33,558 |  |  | $ | 21,115 |  |  | $ | 17,706 |  |  | $ | 25 |  |  | $ | (11,007 | ) |  | $ | 61,397 |
Net investment income | — |  |  | — |  |  | 164 |  |  | 85 |  |  | — |  |  | 249 |
Total revenues | 33,558 |  |  | 21,115 |  |  | 17,870 |  |  | 110 |  |  | (11,007 | ) |  | 61,646 |
Adjusted operating income (loss) | 947 |  |  | 1,489 |  |  | 1,562 |  |  | (231 | ) |  | (172 | ) |  | 3,595 |
March 31, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 32,546 |  |  | $ | 20,432 |  |  | $ | 1,316 |  |  | $ | — |  |  | $ | (8,601 | ) |  | $ | 45,693 |
Net investment income | — |  |  | — |  |  | 2 |  |  | 48 |  |  | — |  |  | 50 |
Total revenues | 32,546 |  |  | 20,432 |  |  | 1,318 |  |  | 48 |  |  | (8,601 | ) |  | 45,743 |
Adjusted operating income (loss) | 987 |  |  | 1,836 |  |  | (137 | ) |  | (218 | ) |  | (175 | ) |  | 2,293 |
_____________________________________________
(1) | Revenues of the Pharmacy Services segment include approximately $3.3 billion of retail co-payments for each of the three-month periods ended March 31, 2019 and 2018.
(2) |
Reconciliation of Operating Earnings to Net Income | The following is a reconciliation of consolidated operating income to adjusted operating income for the three months ended March 31, 2019 and 2018:
| Three Months Ended
| March 31,
In millions | 2019 |  | 2018
Operating income (GAAP measure) | $ | 2,690 |  |  | $ | 1,996 |
Amortization of intangible assets (1) | 622 |  |  | 210 |
Acquisition-related transaction and integration costs (2) | 148 |  |  | 43 |
Store rationalization charge (3) | 135 |  |  | — |
Loss on divestiture of subsidiary (4) | — |  |  | 86 |
Interest income on financing for the Aetna Acquisition (5) | — |  |  | (42 | )
Adjusted operating income | $ | 3,595 |  |  | $ | 2,293 |
_____________________________________________
(1) | Intangible assets relate to the Company's acquisition activities and are amortized over their useful lives. The amortization of intangible assets is reflected in the Company's unaudited GAAP condensed consolidated statements of operations in operating expenses within each segment. The amortization of intangible assets is not directly related to the core performance of the Company's business operations.
(2) | During the three months ended March 31, 2019, acquisition-related integration costs relate to the Aetna Acquisition. During the three months ended March 31, 2018, acquisition-related transaction and integration costs relate to the acquisitions of Aetna and Omnicare, Inc. The acquisition-related transaction and integration costs are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses primarily within the Corporate/Other segment.
(3) | During the three months ended March 31, 2019, the store rationalization charge primarily relates to operating lease right-of-use asset impairment charges in connection with the planned closure of 46 underperforming retail pharmacy stores in the second quarter of 2019. The store rationalization charge is reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Retail/LTC segment.
(4) | During the three months ended March 31, 2018, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of the Company’s RxCrossroads subsidiary for $725 million and is reflected in operating expenses in the Company’s unaudited GAAP condensed consolidated statement of operations within the Retail/LTC segment.
(5) | During the three months ended March 31, 2018, the Company recorded interest income of $42 million on the proceeds of its unsecured senior notes issued in March 2018 to partially fund the Aetna Acquisition. All amounts are for the periods prior to the close of the Aetna Acquisition, which occurred on November 28, 2018, and were recorded within the Corporate/Other segment.

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- Definition Tabular disclosure of the reconciliation of profit (loss) from reportable segments to the consolidated income (loss) before income tax expense (benefit) and discontinued operations. Includes, but is not limited to, reconciliation after income tax if income tax is allocated to the reportable segment. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8924-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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- Definition Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8813-108599 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=108376223&loc=d3e13816-109267 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8721-108599 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8906-108599 + Details
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