XML 58 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Segment Reporting
 6 Months Ended
Jun. 30, 2013
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
 
The Company has three reportable segments: Pharmacy Services, Retail Pharmacy and Corporate. The Company’s segments maintain separate financial information for which operating results are evaluated on a regular basis by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company evaluates its Pharmacy Services and Retail Pharmacy segments’ performance based on net revenue, gross profit and operating profit before the effect of nonrecurring charges and gains and certain intersegment activities. The Company evaluates the performance of its Corporate Segment based on operating expenses before the effect of nonrecurring charges and gains and certain intersegment activities.
 
The Pharmacy Services Segment provides a full range of pharmacy benefit management (“PBM”) services including mail order and specialty pharmacy services, plan design and administration, formulary management, discounted drug purchase arrangements, Medicare Part D services, retail pharmacy network management services, prescription management systems, clinical services, disease management services and pharmacogenomics. The Company’s customers are primarily employers, insurance companies, unions, government employee groups, managed care organizations, other sponsors of health benefit plans and individuals throughout the United States. In addition, through the Company’s SilverScript Insurance Company subsidiary, the Company is a national provider of drug benefits to eligible beneficiaries under the Federal Government’s Medicare Part D program. The Pharmacy Services business operates under the CVS Caremark® Pharmacy Services, Caremark®, CVS Caremark®, CarePlus CVS/pharmacy®, RxAmerica®, Accordant® and Novologix® names. As of June 30, 2013, the Pharmacy Services Segment operated 30 retail specialty pharmacy stores, 12 specialty mail order pharmacies and four mail service pharmacies located in 22 states, Puerto Rico and the District of Columbia.
 
The Retail Pharmacy Segment sells prescription drugs and a wide assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards and convenience foods through the Company’s CVS/pharmacy®, CVS®, Longs Drugs® and Drogaria Onofre® retail stores and online through CVS.com® and Onofre.com.br®. As of June 30, 2013, the Retail Pharmacy Segment included 7,553 retail drugstores (of which 7,495 operated a pharmacy), 18 onsite pharmacies, 684 retail health care clinics, and the online retail website, CVS.com and Onofre.com.br. The retail drugstores are located in 42 states, the District of Columbia, Puerto Rico and Brazil. The retail health care clinics operate under the MinuteClinic® name, and 676 are located within CVS/pharmacy stores. MinuteClinics utilize nationally-recognized medical protocols to diagnose and treat minor health conditions, perform health screenings, monitor chronic conditions and deliver vaccinations. The clinics are staffed by board-certified nurse practitioners and physician assistants who provide access to affordable care without appointment.
 
The Corporate Segment provides management and administrative services to support the Company. The Corporate Segment consists of certain aspects of executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance departments.
In millions
Pharmacy
Services
Segment(1)
 
Retail
Pharmacy
Segment
 
Corporate
Segment
 
Intersegment
Eliminations(2)
 
Consolidated
Totals
Three Months Ended
 
 
 
 
 
 
 
 
 
June 30, 2013:
 
 
 
 
 
 
 
 
 
Net revenues
$
18,800

 
$
16,139

 
$
—

 
$
(3,691
)
 
$
31,248

Gross profit
963

 
5,000

 
—

 
(127
)
 
5,836

Operating profit (loss)
675

 
1,596

 
(176
)
 
(127
)
 
1,968

June 30, 2012:
 

 
 

 
 

 
 

 
 

Net revenues
18,423

 
15,846

 
—

 
(3,555
)
 
30,714

Gross profit
777

 
4,769

 
—

 
(97
)
 
5,449

Operating profit (loss)
511

 
1,469

 
(175
)
 
(97
)
 
1,708

Six Months Ended
 

 
 

 
 

 
 

 
 

June 30, 2013:
 

 
 

 
 

 
 

 
 

Net revenues
37,111

 
32,191

 
—

 
(7,291
)
 
62,011

Gross profit
1,731

 
9,952

 
—

 
(265
)
 
11,418

Operating profit (loss)
1,174

 
3,133

 
(375
)
 
(265
)
 
3,667

June 30, 2012:
 

 
 

 
 

 
 

 
 

Net revenues
36,722

 
31,869

 
—

 
(7,079
)
 
61,512

Gross profit
1,393

 
9,341

 
—

 
(172
)
 
10,562

Operating profit (loss)
860

 
2,766

 
(343
)
 
(172
)
 
3,111

Total assets:
 

 
 

 
 

 
 

 
 

June 30, 2013
36,271

 
29,639

 
1,364

 
(990
)
 
66,284

December 31, 2012
36,057

 
29,183

 
1,408

 
(736
)
 
65,912

Goodwill:
 

 
 

 
 

 
 

 
 

June 30, 2013
19,658

 
6,896

 
—

 
—

 
26,554

December 31, 2012
19,646

 
6,749

 
—

 
—

 
26,395


(1)          Net revenues of the Pharmacy Services Segment include approximately $2.0 billion and $2.1 billion of retail co-payments for the three months ended June 30, 2013 and 2012, respectively, as well as $4.2 billion and $4.4 billion of retail co-payments for the six months ended June 30, 2013 and 2012, respectively.
(2)        Intersegment eliminations relate to two types of transactions: (i) Intersegment revenues that occur when Pharmacy Services Segment customers use Retail Pharmacy Segment stores to purchase covered products. When this occurs, both the Pharmacy Services and Retail Pharmacy segments record the revenue on a standalone basis, and (ii) Intersegment revenues, gross profit and operating profit that occur when Pharmacy Services Segment customers, through the Company’s intersegment activities (such as the Maintenance Choice® program), elect to pick-up their maintenance prescriptions at Retail Pharmacy Segment stores instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail Pharmacy segments record the revenue, gross profit and operating profit on a standalone basis. The following amounts are eliminated in consolidation in connection with the item (ii) intersegment activity: net revenues of $1.1 billion and $840 million for the three months ended June 30, 2013 and 2012, respectively, and $2.0 billion and $1.6 billion for the six months ended June 30, 2013 and 2012 respectively; gross profit and operating profit of $127 million and $97 million for the three months ended June 30, 2013 and 2012, respectively, and $265 million and $172 million for the six months ended June 30, 2013 and 2012, respectively.