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Segment Reporting | 9 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting The Company has three operating segments, Pharmacy Services, Retail/LTC and Health Care Benefits, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s chief operating decision maker (the “CODM”) evaluates the segments’ operating results on a regular basis in deciding how to allocate resources among the segments and in assessing segment performance. The CODM evaluates the performance of the Company’s segments based on adjusted operating income, which is defined as operating income (GAAP measure) excluding the impact of amortization of intangible assets and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. See the reconciliations of operating income (GAAP measure) to adjusted operating income below for further context regarding the items excluded from operating income in determining adjusted operating income. The Company uses adjusted operating income as its principal measure of segment performance as it enhances the Company’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. Non-GAAP financial measures the Company discloses, such as consolidated adjusted operating income, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals:
In millions | Pharmacy Services (1) |  | Retail/ LTC |  | Health Care Benefits |  | Corporate/ Other |  | Intersegment Eliminations |  | Consolidated Totals
Three Months Ended |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 33,492 |  |  | $ | 14,770 |  |  | $ | 18,557 |  |  | $ | 33 |  |  | $ | — |  |  | $ | 66,852 |
Intersegment revenues | 2,219 |  |  | 7,955 |  |  | 20 |  |  | — |  |  | (10,194) |  |  | — |
Net investment income | — |  |  | — |  |  | 121 |  |  | 83 |  |  | — |  |  | 204 |
Total revenues | 35,711 |  |  | 22,725 |  |  | 18,698 |  |  | 116 |  |  | (10,194) |  |  | 67,056 |
Adjusted operating income (loss) | 1,619 |  |  | 1,412 |  |  | 1,080 |  |  | (303) |  |  | (186) |  |  | 3,622 |
September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 33,680 |  |  | $ | 13,805 |  |  | $ | 17,027 |  |  | $ | 35 |  |  | $ | — |  |  | $ | 64,547 |
Intersegment revenues | 2,338 |  |  | 7,661 |  |  | 8 |  |  | — |  |  | (10,007) |  |  | — |
Net investment income | — |  |  | — |  |  | 146 |  |  | 117 |  |  | — |  |  | 263 |
Total revenues | 36,018 |  |  | 21,466 |  |  | 17,181 |  |  | 152 |  |  | (10,007) |  |  | 64,810 |
Adjusted operating income (loss) | 1,439 |  |  | 1,516 |  |  | 1,423 |  |  | (252) |  |  | (179) |  |  | 3,947 |
Nine Months Ended |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 98,233 |  |  | $ | 44,314 |  |  | $ | 55,972 |  |  | $ | 83 |  |  | $ | — |  |  | $ | 198,602 |
Intersegment revenues | 7,350 |  |  | 22,822 |  |  | 51 |  |  | — |  |  | (30,223) |  |  | — |
Net investment income | — |  |  | — |  |  | 341 |  |  | 209 |  |  | — |  |  | 550 |
Total revenues | 105,583 |  |  | 67,136 |  |  | 56,364 |  |  | 292 |  |  | (30,223) |  |  | 199,152 |
Adjusted operating income (loss) | 4,127 |  |  | 4,371 |  |  | 6,035 |  |  | (931) |  |  | (539) |  |  | 13,063 |
September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 95,494 |  |  | $ | 41,536 |  |  | $ | 51,976 |  |  | $ | 76 |  |  | $ | — |  |  | $ | 189,082 |
Intersegment revenues | 8,924 |  |  | 22,492 |  |  | 20 |  |  | — |  |  | (31,436) |  |  | — |
Net investment income | — |  |  | — |  |  | 458 |  |  | 347 |  |  | — |  |  | 805 |
Total revenues | 104,418 |  |  | 64,028 |  |  | 52,454 |  |  | 423 |  |  | (31,436) |  |  | 189,887 |
Adjusted operating income (loss) | 3,682 |  |  | 4,674 |  |  | 4,423 |  |  | (685) |  |  | (521) |  |  | 11,573 |
_____________________________________________ (1)Total revenues of the Pharmacy Services segment include approximately $2.5 billion and $2.7 billion of retail co-payments for the three months ended September 30, 2020 and 2019, respectively, and $8.5 billion and $8.9 billion of retail co-payments for the nine months ended September 30, 2020 and 2019, respectively. The following are reconciliations of consolidated operating income to adjusted operating income for the three and nine months ended September 30, 2020 and 2019:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
In millions | 2020 |  | 2019 |  | 2020 |  | 2019
Operating income (GAAP measure) | $ | 3,249 |  |  | $ | 2,928 |  |  | $ | 11,387 |  |  | $ | 8,950 |
Amortization of intangible assets (1) | 587 |  |  | 607 |  |  | 1,751 |  |  | 1,822 |
Acquisition-related integration costs (2) | 57 |  |  | 111 |  |  | 196 |  |  | 365 |
(Gain) loss on divestiture of subsidiary (3) | (271) |  |  | 205 |  |  | (271) |  |  | 205 |
Store rationalization charges (4) | — |  |  | 96 |  |  | — |  |  | 231 |
Adjusted operating income | $ | 3,622 |  |  | $ | 3,947 |  |  | $ | 13,063 |  |  | $ | 11,573 |
_____________________________________________ (1)The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets 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. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised. (2)During the three and nine months ended September 30, 2020 and 2019, acquisition-related integration costs relate to the Aetna Acquisition. The acquisition-related integration costs are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Corporate/Other segment. (3)During the three and nine months ended September 30, 2020, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of the Workers’ Compensation business, which the Company sold on July 31, 2020 for approximately $850 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited GAAP condensed consolidated statements of operations within the Health Care Benefits segment. During the three and nine months ended September 30, 2019, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of Onofre, which occurred on July 1, 2019. The loss on divestiture primarily relates to the elimination of the cumulative translation adjustment from accumulated other comprehensive income and is reflected in operating expenses in the Company’s unaudited GAAP condensed consolidated statements of operations within the Retail/LTC segment. (4)During the three and nine months ended September 30, 2019, the store rationalization charges relate to the planned closure of 22 underperforming retail pharmacy stores in the first quarter of 2020. During the nine months ended September 30, 2019, the store rationalization charges also relate to the planned closure of 46 underperforming retail pharmacy stores in the second quarter of 2019. The store rationalization charges primarily relate to operating lease right-of-use asset impairment charges and are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Retail/LTC segment.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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