Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2018

Summarized financial information of segments



	Pharmacy		Retail/		Health Care		Corporate/			Intersegment			Consolidated
In millions	Services ⁽¹⁾⁽²⁾		LTC ⁽²⁾		Benefits ⁽²⁾		Other			Eliminations ⁽²⁾			Totals
2018:
Revenues from customers	$	134,115	$	83,989	$	5,504	$	4		$	(29,693	)	$	193,919
Net investment income ⁽³⁾	13		—		45		602			—			660
Total revenues	134,128		83,989		5,549		606			(29,693		)	194,579
Operating income (loss) ⁽⁴⁾⁽⁵⁾	4,699		620		276		(805		)	(769		)	4,021
Depreciation and amortization	712		1,698		170		138			—			2,718
Additions to property and equipment	326		1,350		46		401			—			2,123
2017:
Revenues from customers	130,596		79,398		—		—			(25,229		)	184,765
Net investment income	5		—		—		16			—			21
Total revenues⁽⁷⁾	130,601		79,398		—		16			(25,229		)	184,786
Operating income (loss) ^(4)(5)(7)	4,657		6,558		—		(936		)	(741		)	9,538
Depreciation and amortization	712		1,651		—		116			—			2,479
Additions to property and equipment	311		1,398		—		340			—			2,049
2016:
Revenues from customers	119,963		81,100		—		—			(23,537		)	177,526
Net investment income	2		—		—		18			—			20
Total revenues⁽⁷⁾	119,965		81,100		—		18			(23,537		)	177,546
Operating income (loss) ^(4)(5)(6)(7)	4,570		7,437		—		(900		)	(721		)	10,386
Depreciation and amortization	714		1,642		—		119			—			2,475
Additions to property and equipment	295		1,732		—		252			—			2,279

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(1)	Total revenues of PSS include approximately $11.4 billion, $10.8 billion and $10.5 billion of Retail Co-Payments for 2018, 2017 and 2016, respectively. See Note 1 ‘‘Significant Accounting Policies’’ for additional information about Retail Co-Payments.


(2)	Intersegment eliminations relate to intersegment revenue generating activities that occur between PSS and RLS for 2018, 2017 and 2016. Effective November 28, 2018, intersegment eliminations also relate to intersegment revenue generating activities that occur between HCBS, PSS and/or RLS.


(3)	Corporate/Other segment net investment income for 2018 includes interest income of $536 million related to the proceeds of the $40 billion 2018 Notes. This amount is for the period prior to the close of the Aetna Acquisition, which occurred on November 28, 2018.

(4)

RLS operating income for 2018, 2017 and 2016 includes $7 million, $34 million and $281 million, respectively, of acquisition-related integration costs. The integration costs in 2018 and 2017 are related to the acquisition of Omnicare. The integration costs in 2016 are related to the acquisitions of Omnicare and the pharmacy and clinic businesses of Target. RLS operating income for 2018 and 2017 also includes goodwill impairment charges of $6.1 billion related to the LTC reporting unit and $181 million related to the RxCrossroads reporting unit, respectively. In addition, RLS operating income for 2017 and 2016 includes $215 million and $34 million, respectively, of charges associated with store rationalization and asset impairment charges in connection with planned store closures related to the Company’s enterprise streamlining initiative. RLS operating income for 2018 also includes a $43 million loss on impairment of long-lived assets primarily related to the impairment of property and equipment and an $86 million loss on the divestiture of the Company’s RxCrossroads subsidiary.

(5)

Corporate/Other segment operating loss for 2018, 2017 and 2016 includes $485 million, $40 million and $10 million, respectively, of divestiture and acquisition-related transaction and integration costs included in operating expenses in the consolidated statements of operations. The transaction and integration costs in 2018 are related to the acquisitions of Aetna and Omnicare. The transaction and integration costs in 2017 are related to the acquisitions of Aetna and Omnicare and the divestiture of RxCrossroads. The integration costs in 2016 are related to the acquisitions of Omnicare and the pharmacy and clinic businesses of Target.


(6)	PSS operating income for 2016 includes the reversal of an accrual of $88 million in connection with a legal settlement.


(7)	Amounts revised to reflect the reclassification of interest income from interest expense, net to net investment income within total revenues to conform with insurance company presentation which increased total revenues and operating income by $21 million and $20 million in 2017 and 2016, respectively.

Schedule of segment financial information adjusted

Segment financial information for the years ended December 31, 2017 and 2016, have been retrospectively adjusted to reflect this change to the Company’s cost allocation methodology and net investment income presentation as shown below:



	Year Ended December 31, 2017
	Pharmacy			Retail/			Corporate/			Intersegment			Consolidated
In millions	Services			LTC			Other			Eliminations			Totals
Revenues, as previously reported	$	130,596		$	79,398		$	—		$	(25,229	)	$	184,765
Adjustments	5			—			16			—			21
Revenues, as adjusted	$	130,601		$	79,398		$	16		$	(25,229	)	$	184,786

Cost of products sold ⁽¹⁾	$	121,746		$	56,081		$	—		$	(24,417	)	$	153,410
Adjustments	53			(15		)	—			—			38
Cost of products sold	$	121,799		$	56,066		$	—		$	(24,417	)	$	153,448

Benefit costs ⁽¹⁾	$	2,810		$	—		$	—		$	—		$	2,810
Adjustments	—			—			—			—			—
Benefit costs	$	2,810		$	—		$	—		$	—		$	2,810

Operating expenses, as previously reported	$	1,285		$	16,848		$	966		$	(71	)	$	19,028
Adjustments	50			(74		)	(14		)	—			(38		)
Operating expenses, as adjusted	$	1,335		$	16,774		$	952		$	(71	)	$	18,990

Operating income (loss), as previously reported	$	4,755		$	6,469		$	(966	)	$	(741	)	$	9,517
Adjustments	(98		)	89			30			—			21
Operating income (loss), as adjusted	$	4,657		$	6,558		$	(936	)	$	(741	)	$	9,538

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(1) The total of cost of products sold and benefit costs previously was reported as cost of revenues.



	Year Ended December 31, 2016
	Pharmacy			Retail/			Corporate/			Intersegment			Consolidated
In millions	Services			LTC			Other			Eliminations			Totals
Revenues, as previously reported	$	119,963		$	81,100		$	—		$	(23,537	)	$	177,526
Adjustments	2			—			18			—			20
Revenues, as adjusted	$	119,965		$	81,100		$	18		$	(23,537	)	$	177,546

Cost of products sold ⁽¹⁾	$	111,883		$	57,362		$	—		$	(22,755	)	$	146,490
Adjustments	66			(23		)	—			—			43
Cost of products sold	$	111,949		$	57,339		$	—		$	(22,755	)	$	146,533

Benefit costs ⁽¹⁾	$	2,179		$	—		$	—		$	—		$	2,179
Adjustments	—			—			—			—			—
Benefit costs	$	2,179		$	—		$	—		$	—		$	2,179

Operating expenses, as previously reported	$	1,225		$	16,436		$	891		$	(61	)	$	18,491
Adjustments	42			(112		)	27			—			(43		)
Operating expenses, as adjusted	$	1,267		$	16,324		$	918		$	(61	)	$	18,448

Operating income (loss), as previously reported	$	4,676		$	7,302		$	(891	)	$	(721	)	$	10,366
Adjustments	(106		)	135			(9		)	—			20
Operating income (loss), as adjusted	$	4,570		$	7,437		$	(900	)	$	(721	)	$	10,386

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(1) The total of cost of products sold and benefit costs previously was reported as cost of revenues.