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Segment Reporting (Tables) | 6 Months Ended
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Jun. 30, 2019
Segment Reporting [Abstract] |
Schedule of Error Corrections and Prior Period Adjustments | Segment financial information for the three and six months ended June 30, 2018, has been retrospectively adjusted to reflect these changes as shown below:
| Three Months Ended June 30, 2018
| Pharmacy |  | Retail/ |  | Health Care |  | Corporate/ |  | Intersegment |  | Consolidated
In millions | Services |  | LTC |  | Benefits |  | Other |  | Eliminations |  | Totals
Revenues, as previously reported | $ | 33,251 |  |  | $ | 20,672 |  |  | $ | — |  |  | $ | 210 |  |  | $ | (7,211 | ) |  | $ | 46,922 |
Adjustments | 176 |  |  | — |  |  | 764 |  |  | — |  |  | (940 | ) |  | — |
Revenues, as adjusted | $ | 33,427 |  |  | $ | 20,672 |  |  | $ | 764 |  |  | $ | 210 |  |  | $ | (8,151 | ) |  | $ | 46,922 |
Cost of products sold (1) | $ | 31,121 |  |  | $ | 14,760 |  |  | $ | — |  |  | $ | — |  |  | $ | (7,005 | ) |  | $ | 38,876 |
Adjustments | 852 |  |  | — |  |  | — |  |  | — |  |  | (852 | ) |  | — |
Cost of products sold, as adjusted | $ | 31,973 |  |  | $ | 14,760 |  |  | $ | — |  |  | $ | — |  |  | $ | (7,857 | ) |  | $ | 38,876 |
Benefit costs (1) | $ | 631 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 631 |
Adjustments | (631 | ) |  | — |  |  | 631 |  |  | — |  |  | — |  |  | — |
Benefit costs, as adjusted | $ | — |  |  | $ | — |  |  | $ | 631 |  |  | $ | — |  |  | $ | — |  |  | $ | 631 |
Operating expenses, as previously reported | $ | 407 |  |  | $ | 4,216 |  |  | $ | — |  |  | $ | 263 |  |  | $ | (19 | ) |  | $ | 4,867 |
Adjustments | (45 | ) |  | — |  |  | 133 |  |  | — |  |  | (88 | ) |  | — |
Operating expenses, as adjusted | $ | 362 |  |  | $ | 4,216 |  |  | $ | 133 |  |  | $ | 263 |  |  | $ | (107 | ) |  | $ | 4,867 |
Operating income (loss), as previously reported | $ | 1,092 |  |  | $ | (2,225 | ) |  | $ | — |  |  | $ | (53 | ) |  | $ | (187 | ) |  | $ | (1,373 | )
Adjustments | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Operating income (loss), as adjusted | 1,092 |  |  | (2,225 | ) |  | — |  |  | (53 | ) |  | (187 | ) |  | (1,373 | )
Segment measure adjustments | 89 |  |  | 4,046 |  |  | — |  |  | (163 | ) |  | — |  |  | 3,972 |
Adjusted operating income (loss) | $ | 1,181 |  |  | $ | 1,821 |  |  | $ | — |  |  | $ | (216 | ) |  | $ | (187 | ) |  | $ | 2,599 |
_____________________________________________
(1) | The total of cost of products sold and benefit costs were previously reported as cost of revenues.
| Six Months Ended June 30, 2018
| Pharmacy |  | Retail/ |  | Health Care |  | Corporate/ |  | Intersegment |  | Consolidated
In millions | Services |  | LTC |  | Benefits |  | Other |  | Eliminations |  | Totals
Revenues, as previously reported | $ | 65,471 |  |  | $ | 41,104 |  |  | $ | — |  |  | $ | 258 |  |  | $ | (14,168 | ) |  | $ | 92,665 |
Adjustments | 502 |  |  | — |  |  | 2,082 |  |  | — |  |  | (2,584 | ) |  | — |
Revenues, as adjusted | $ | 65,973 |  |  | $ | 41,104 |  |  | $ | 2,082 |  |  | $ | 258 |  |  | $ | (16,752 | ) |  | $ | 92,665 |
Cost of products sold (1) | $ | 60,872 |  |  | $ | 29,276 |  |  | $ | — |  |  | $ | — |  |  | $ | (13,767 | ) |  | $ | 76,381 |
Adjustments | 2,408 |  |  | — |  |  | — |  |  | — |  |  | (2,408 | ) |  | — |
Cost of products sold, as adjusted | $ | 63,280 |  |  | $ | 29,276 |  |  | $ | — |  |  | $ | — |  |  | $ | (16,175 | ) |  | $ | 76,381 |
Benefit costs (1) | $ | 1,960 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,960 |
Adjustments | (1,960 | ) |  | — |  |  | 1,960 |  |  | — |  |  | — |  |  | — |
Benefit costs, as adjusted | $ | — |  |  | $ | — |  |  | $ | 1,960 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,960 |
Operating expenses, as previously reported | $ | 784 |  |  | $ | 8,508 |  |  | $ | — |  |  | $ | 527 |  |  | $ | (39 | ) |  | $ | 9,780 |
Adjustments | (84 | ) |  | — |  |  | 260 |  |  | — |  |  | (176 | ) |  | — |
Operating expenses, as adjusted | $ | 700 |  |  | $ | 8,508 |  |  | $ | 260 |  |  | $ | 527 |  |  | $ | (215 | ) |  | $ | 9,780 |
Operating income (loss), as previously reported | $ | 1,855 |  |  | $ | (601 | ) |  | $ | — |  |  | $ | (269 | ) |  | $ | (362 | ) |  | $ | 623 |
Adjustments | 138 |  |  | — |  |  | (138 | ) |  | — |  |  | — |  |  | — |
Operating income (loss), as adjusted | 1,993 |  |  | (601 | ) |  | (138 | ) |  | (269 | ) |  | (362 | ) |  | 623 |
Segment measure adjustments | 175 |  |  | 4,258 |  |  | 1 |  |  | (165 | ) |  | — |  |  | 4,269 |
Adjusted operating income (loss) | $ | 2,168 |  |  | $ | 3,657 |  |  | $ | (137 | ) |  | $ | (434 | ) |  | $ | (362 | ) |  | $ | 4,892 |
_____________________________________________ (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 |  |  |  |  |  |  |  |  |  |  |
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 34,842 |  |  | $ | 21,447 |  |  | $ | 17,255 |  |  | $ | 16 |  |  | $ | (10,422 | ) |  | $ | 63,138 |
Net investment income | — |  |  | — |  |  | 148 |  |  | 145 |  |  | — |  |  | 293 |
Total revenues | 34,842 |  |  | 21,447 |  |  | 17,403 |  |  | 161 |  |  | (10,422 | ) |  | 63,431 |
Adjusted operating income (loss) | 1,296 |  |  | 1,669 |  |  | 1,438 |  |  | (202 | ) |  | (170 | ) |  | 4,031 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 33,427 |  |  | $ | 20,672 |  |  | $ | 760 |  |  | $ | — |  |  | $ | (8,151 | ) |  | $ | 46,708 |
Net investment income | — |  |  | — |  |  | 4 |  |  | 210 |  |  | — |  |  | 214 |
Total revenues | 33,427 |  |  | 20,672 |  |  | 764 |  |  | 210 |  |  | (8,151 | ) |  | 46,922 |
Adjusted operating income (loss) | 1,181 |  |  | 1,821 |  |  | — |  |  | (216 | ) |  | (187 | ) |  | 2,599 |
Six Months Ended |  |  |  |  |  |  |  |  |  |  |
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 68,400 |  |  | $ | 42,562 |  |  | $ | 34,961 |  |  | $ | 41 |  |  | $ | (21,429 | ) |  | $ | 124,535 |
Net investment income | — |  |  | — |  |  | 312 |  |  | 230 |  |  | — |  |  | 542 |
Total revenues | 68,400 |  |  | 42,562 |  |  | 35,273 |  |  | 271 |  |  | (21,429 | ) |  | 125,077 |
Adjusted operating income (loss) | 2,243 |  |  | 3,158 |  |  | 3,000 |  |  | (433 | ) |  | (342 | ) |  | 7,626 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |
Revenues from customers | $ | 65,973 |  |  | $ | 41,104 |  |  | $ | 2,076 |  |  | $ | — |  |  | $ | (16,752 | ) |  | $ | 92,401 |
Net investment income | — |  |  | — |  |  | 6 |  |  | 258 |  |  | — |  |  | 264 |
Total revenues | 65,973 |  |  | 41,104 |  |  | 2,082 |  |  | 258 |  |  | (16,752 | ) |  | 92,665 |
Adjusted operating income (loss) | 2,168 |  |  | 3,657 |  |  | (137 | ) |  | (434 | ) |  | (362 | ) |  | 4,892 |
_____________________________________________
(1) | Revenues of the Pharmacy Services segment include approximately $2.9 billion and $2.8 billion of retail co-payments for the three months ended June 30, 2019 and 2018, respectively, as well as $6.2 billion and $6.1 billion of retail co-payments for the six months ended June 30, 2019 and 2018, respectively.
(2) Intersegment eliminations relate to intersegment revenue generating activities that occur between the Pharmacy Services segment, the Retail/LTC segment and/or the Health Care Benefits segment.
Reconciliation of Operating Earnings to Net Income | The following is a reconciliation of consolidated operating income (loss) to adjusted operating income for the three and six months ended June 30, 2019 and 2018:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
In millions | 2019 |  | 2018 |  | 2019 |  | 2018
Operating income (loss) (GAAP measure) | $ | 3,332 |  |  | $ | (1,373 | ) |  | $ | 6,022 |  |  | $ | 623 |
Amortization of intangible assets (1) | 593 |  |  | 214 |  |  | 1,215 |  |  | 424 |
Acquisition-related transaction and integration costs (2) | 106 |  |  | 39 |  |  | 254 |  |  | 82 |
Store rationalization charge (3) | — |  |  | — |  |  | 135 |  |  | — |
Goodwill impairment (4) | — |  |  | 3,921 |  |  | — |  |  | 3,921 |
Loss on divestiture of subsidiary (5) | — |  |  | — |  |  | — |  |  | 86 |
Interest income on financing for the Aetna Acquisition (6) | — |  |  | (202 | ) |  | — |  |  | (244 | )
Adjusted operating income | $ | 4,031 |  |  | $ | 2,599 |  |  | $ | 7,626 |  |  | $ | 4,892 |
_____________________________________________
(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 since this amortization does not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Subsequent to the applicable acquisition date, the Company’s revenues and results of operations include the results of each of the Company’s acquisitions, which are supported by these intangible assets.
(2) | During the three and six months ended June 30, 2019 and 2018, acquisition-related transaction and integration costs relate to the Aetna Acquisition. During the six months ended June 30, 2018, acquisition-related integration costs also relate to the acquisition of 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 six months ended June 30, 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 and six months ended June 30, 2018, the goodwill impairment charge relates to the LTC reporting unit within the Retail/LTC segment.
(5) | During the six months ended June 30, 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.
(6) During the three and six months ended June 30, 2018, the Company recorded interest income of $202 million and $244 million, respectively 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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