10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to_________

Commission File Number: 001-01011

CVS HEALTH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	05-0494040
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

	One CVS Drive,	Woonsocket,	Rhode Island	02895
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code:				(401)	765-1500
Former name, former address and former fiscal year, if changed since last report:				N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CVS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of October 26, 2022, the registrant had 1,313,966,912 shares of common stock issued and outstanding.

TABLE OF CONTENTS
		Page
Part I	Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	64
Item 4.	Controls and Procedures	64
Part II	Other Information
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	65
Item 6.	Exhibits	66
Signatures		67

Part I.Financial Information

Item 1.Financial Statements

Index to Condensed Consolidated Financial Statements

	Page
Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2022 and 2021	2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and nine months ended September 30, 2022 and 2021	3
Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2022 and December 31, 2021	4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2022 and 2021	5
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended September 30, 2022 and 2021, the three months ended June 30, 2022 and 2021 and the three months ended March 31, 2022 and 2021	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Report of Independent Registered Public Accounting Firm	39

1

CVS Health Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2022		2021		2022		2021
Revenues:
Products	$	57,643	$	51,853	$	166,959	$	149,765
Premiums	21,003		18,984		63,894		56,927
Services	2,312		2,711		7,253		7,983
Net investment income	201		246		515		832
Total revenues	81,159		73,794		238,621		215,507
Operating costs:
Cost of products sold	50,365		45,011		145,164		129,425
Benefit costs	17,419		16,081		52,976		47,686
Opioid litigation charges	5,220		—		5,704		—
Loss on assets held for sale	2,480		—		2,521		—
Goodwill impairment	—		431		—		431
Operating expenses	9,606		9,210		28,128		27,001
Total operating costs	85,090		70,733		234,493		204,543
Operating income (loss)	(3,931)		3,061		4,128		10,964
Interest expense	566		602		1,735		1,895
Loss on early extinguishment of debt	—		363		—		363
Other income	(41)		(49)		(126)		(144)
Income (loss) before income tax provision	(4,456)		2,145		2,519		8,850
Income tax provision (benefit)	(1,047)		558		654		2,248
Net income (loss)	(3,409)		1,587		1,865		6,602
Net (income) loss attributable to noncontrolling interests	(7)		11		(18)		2
Net income (loss) attributable to CVS Health	$	(3,416)	$	1,598	$	1,847	$	6,604
Net income (loss) per share attributable to CVS Health:
Basic	$	(2.60)	$	1.21	$	1.41	$	5.01
Diluted	$	(2.60)	$	1.20	$	1.40	$	4.98
Weighted average shares outstanding:
Basic	1,315		1,321		1,313		1,318
Diluted	1,315		1,329		1,324		1,326
Dividends declared per share	$	0.55	$	0.50	$	1.65	$	1.50

See accompanying notes to condensed consolidated financial statements (unaudited).

2

CVS Health Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Net income (loss)	$	(3,409)	$	1,587	$	1,865	$	6,602
Other comprehensive loss, net of tax:
Net unrealized investment losses	(623)		(73)		(2,591)		(310)
Foreign currency translation adjustments	(7)		(5)		(5)		(6)
Net cash flow hedges	8		(15)		20		(22)
Pension and other postretirement benefits	1		—		2		1
Other comprehensive loss	(621)		(93)		(2,574)		(337)
Comprehensive income (loss)	(4,030)		1,494		(709)		6,265
Comprehensive (income) loss attributable to noncontrolling interests	(7)		11		(18)		2
Comprehensive income (loss) attributable to CVS Health	$	(4,037)	$	1,505	$	(727)	$	6,267

See accompanying notes to condensed consolidated financial statements (unaudited).

3

CVS Health Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

In millions, except per share amounts	September 30, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	17,197	$	9,408
Investments	2,792		3,117
Accounts receivable, net	26,317		24,431
Inventories	18,058		17,760
Assets held for sale	1,498		—
Other current assets	2,479		5,292
Total current assets	68,341		60,008
Long-term investments	20,565		23,025
Property and equipment, net	12,626		12,896
Operating lease right-of-use assets	18,270		19,122
Goodwill	78,086		79,121
Intangible assets, net	25,157		29,026
Separate accounts assets	3,318		5,087
Other assets	4,849		4,714
Total assets	$	231,212	$	232,999
Liabilities:
Accounts payable	$	13,925	$	12,544
Pharmacy claims and discounts payable	19,161		17,330
Health care costs payable	10,351		8,808
Policyholders’ funds	1,642		4,301
Accrued expenses	19,423		17,670
Other insurance liabilities	4,561		1,303
Current portion of operating lease liabilities	1,687		1,646
Current portion of long-term debt	1,363		4,205
Liabilities held for sale	296		—
Total current liabilities	72,409		67,807
Long-term operating lease liabilities	17,174		18,177
Long-term debt	50,848		51,971
Deferred income taxes	3,508		6,270
Separate accounts liabilities	3,318		5,087
Other long-term insurance liabilities	6,175		6,402
Other long-term liabilities	6,769		1,904
Total liabilities	160,201		157,618
Shareholders’ equity:
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding	—		—
Common stock, par value $0.01: 3,200 shares authorized; 1,757 shares issued and 1,315 shares outstanding at September 30, 2022 and 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and capital surplus	48,047		47,377
Treasury stock, at cost: 442 shares at September 30, 2022 and 422 shares at December 31, 2021	(30,326)		(28,173)
Retained earnings	54,571		54,906
Accumulated other comprehensive income (loss)	(1,609)		965
Total CVS Health shareholders’ equity	70,683		75,075
Noncontrolling interests	328		306
Total shareholders’ equity	71,011		75,381
Total liabilities and shareholders’ equity	$	231,212	$	232,999

See accompanying notes to condensed consolidated financial statements (unaudited).

4

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
In millions	2022		2021
Cash flows from operating activities:
Cash receipts from customers	$	235,395	$	209,104
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(138,785)		(122,129)
Insurance benefits paid	(51,434)		(46,965)
Cash paid to other suppliers and employees	(22,368)		(21,840)
Interest and investment income received	327		582
Interest paid	(1,936)		(2,095)
Income taxes paid	(3,070)		(2,397)
Net cash provided by operating activities	18,129		14,260
Cash flows from investing activities:
Proceeds from sales and maturities of investments	5,535		5,559
Purchases of investments	(6,439)		(7,417)
Purchases of property and equipment	(2,039)		(1,923)
Acquisitions (net of cash acquired)	(131)		(135)
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,808 and $0)	(1,928)		—
Other	74		95
Net cash used in investing activities	(4,928)		(3,821)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	—		987
Repayments of long-term debt	(4,195)		(7,823)
Repurchase of common stock	(2,000)		—
Dividends paid	(2,188)		(1,965)
Proceeds from exercise of stock options	510		440
Payments for taxes related to net share settlement of equity awards	(337)		(161)
Other	(119)		80
Net cash used in financing activities	(8,329)		(8,442)
Net increase in cash, cash equivalents and restricted cash	4,872		1,997
Cash, cash equivalents and restricted cash at the beginning of the period	12,691		11,043
Cash, cash equivalents and restricted cash at the end of the period	$	17,563	$	13,040

5

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
In millions	2022		2021
Reconciliation of net income to net cash provided by operating activities:
Net income	$	1,865	$	6,602
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,198		3,397
Loss on assets held for sale	2,521		—
Goodwill impairment	—		431
Stock-based compensation	341		346
Gain on sale of subsidiary	(225)		—
Loss on early extinguishment of debt	—		363
Deferred income taxes and other noncash items	(2,250)		(645)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(2,009)		(3,504)
Inventories	(415)		1,097
Other assets	(311)		(88)
Accounts payable and pharmacy claims and discounts payable	3,350		3,973
Health care costs payable and other insurance liabilities	4,687		348
Other liabilities	7,377		1,940
Net cash provided by operating activities	$	18,129	$	14,260

See accompanying notes to condensed consolidated financial statements (unaudited).

6

CVS Health Corporation

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

			Attributable to CVS Health
	Number of shares outstanding		Common Stock and Capital Surplus (2)		Treasury Stock (1)		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total CVS Health Shareholders’  Equity		Noncontrolling Interests		Total Shareholders’ Equity
	Common Shares	Treasury Shares (1)
In millions
Balance at December 31, 2021	1,744	(422)	$	47,377	$	(28,173)	$	54,906	$	965	$	75,075	$	306	$	75,381
Net income	—	—	—		—		2,312		—		2,312		1		2,313
Other comprehensive loss	—	—	—		—		—		(1,155)		(1,155)		—		(1,155)
Stock option activity, stock awards and other	3	—	300		—		—		—		300		—		300
Purchase of treasury shares, net of ESPP issuances	—	(19)	—		(1,972)		—		—		(1,972)		—		(1,972)
Common stock dividends	—	—	—		—		(730)		—		(730)		—		(730)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		3		3
Balance at March 31, 2022	1,747	(441)	47,677		(30,145)		56,488		(190)		73,830		310		74,140
Net income	—	—	—		—		2,951		—		2,951		10		2,961
Other comprehensive loss	—	—	—		—		—		(798)		(798)		—		(798)
Stock option activity, stock awards and other	8	—	197		—		—		—		197		—		197
Purchase of treasury shares, net of ESPP issuances	—	(2)	—		(267)		—		—		(267)		—		(267)
Common stock dividends	—	—	—		—		(729)		—		(729)		—		(729)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		2		2
Balance at June 30, 2022	1,755	(443)	47,874		(30,412)		58,710		(988)		75,184		322		75,506
Net income (loss)	—	—	—		—		(3,416)		—		(3,416)		7		(3,409)
Other comprehensive loss (Note 8)	—	—	—		—		—		(621)		(621)		—		(621)
Stock option activity, stock awards and other	2	—	173		—		—		—		173		—		173
ESPP issuances, net of purchase of treasury shares	—	1	—		86		—		—		86		—		86
Common stock dividends	—	—	—		—		(723)		—		(723)		—		(723)
Other decreases in noncontrolling interests	—	—	—		—		—		—		—		(1)		(1)
Balance at September 30, 2022	1,757	(442)	$	48,047	$	(30,326)	$	54,571	$	(1,609)	$	70,683	$	328	$	71,011

_____________________________________________

(1)Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021.

(2)Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2022 and June 30, 2022 and $17 million as of March 31, 2022 and December 31, 2021.

7

			Attributable to CVS Health
	Number of shares outstanding		Common Stock and Capital Surplus (2)		Treasury Stock (1)		Retained Earnings		Accumulated Other Comprehensive Income		Total CVS Health Shareholders’  Equity		Noncontrolling Interests		Total Shareholders’ Equity
	Common Shares	Treasury Shares (1)
In millions
Balance at December 31, 2020	1,733	(423)	$	46,513	$	(28,178)	$	49,640	$	1,414	$	69,389	$	312	$	69,701
Net income	—	—	—		—		2,223		—		2,223		1		2,224
Other comprehensive loss	—	—	—		—		—		(392)		(392)		—		(392)
Stock option activity, stock awards and other	2	—	214		—		—		—		214		—		214
ESPP issuances, net of purchase of treasury shares	—	1	—		76		—		—		76		—		76
Common stock dividends	—	—	—		—		(660)		—		(660)		—		(660)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		1		1
Balance at March 31, 2021	1,735	(422)	46,727		(28,102)		51,203		1,022		70,850		314		71,164
Net income	—	—	—		—		2,783		—		2,783		8		2,791
Other comprehensive income	—	—	—		—		—		148		148		—		148
Stock option activity, stock awards and other	7	—	268		—		—		—		268		—		268
Purchase of treasury shares, net of ESPP issuances	—	(2)	—		(150)		—		—		(150)		—		(150)
Common stock dividends	—	—	—		—		(655)		—		(655)		—		(655)
Other decreases in noncontrolling interests	—	—	—		—		—		—		—		(1)		(1)
Balance at June 30, 2021	1,742	(424)	46,995		(28,252)		53,331		1,170		73,244		321		73,565
Net income	—	—	—		—		1,598		—		1,598		(11)		1,587
Other comprehensive loss (Note 8)	—	—	—		—		—		(93)		(93)		—		(93)
Stock option activity, stock awards and other	1		138		—		—		—		138		—		138
ESPP issuances, net of purchase of treasury shares	—	2	—		86		—		—		86		—		86
Common stock dividends	—	—	—		—		(665)		—		(665)		—		(665)
Balance at September 30, 2021	1,743	(422)	$	47,133	$	(28,166)	$	54,264	$	1,077	$	74,308	$	310	$	74,618

_____________________________________________

(1)Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020.

(2)Common stock and capital surplus includes the par value of common stock of $17 million as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020.

See accompanying notes to condensed consolidated financial statements (unaudited).

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Significant Accounting Policies

Description of Business 

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health” or the “Company”), has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with over 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

The coronavirus disease 2019 (“COVID-19”) and its emerging new variants continue to impact the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q.

The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below.

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services and health information technology products and services. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers. The Company will enter Public Exchanges in four additional states effective January 2023. Open enrollment for the 2023 calendar year has begun in each of these twelve states.

Pharmacy Services Segment

The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services.

Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2022, the Retail/LTC segment operated more than 9,000

9

retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Corporate/Other Segment

The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of:

•Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and

•Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

10

Restricted Cash

Restricted cash included in other current assets on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash included in other assets on the unaudited condensed consolidated balance sheets represents amounts held in a trust in one of the Company’s captive insurance companies to satisfy collateral requirements associated with the assignment of certain insurance policies. All restricted cash is invested in time deposits and money market funds.

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	September 30, 2022		December 31, 2021		September 30, 2021
Cash and cash equivalents	$	17,197	$	9,408	$	9,826
Restricted cash (included in other current assets)	151		3,065		2,996
Restricted cash (included in other assets)	215		218		218
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	17,563	$	12,691	$	13,040

The decrease in restricted cash included in other current assets as of September 30, 2022 compared to December 31, 2021 was primarily due to a decrease in health savings account funds held on behalf of customers as a result of the sale of PayFlex Holdings, Inc. (“PayFlex”). See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information on the Company’s sale of PayFlex.

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following:

In millions	September 30, 2022		December 31, 2021
Trade receivables	$	8,016	$	7,932
Vendor and manufacturer receivables	13,534		10,573
Premium receivables	2,368		2,537
Other receivables	2,647		3,389
Total accounts receivable, net (1)	$	26,565	$	24,431

_____________________________________________

(1)Includes accounts receivable of $248 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

The Company’s allowance for credit losses was $344 million and $339 million as of September 30, 2022 and December 31, 2021, respectively. When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

11

Revenue Recognition

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,947	$	20,759	$	—	$	(11,331)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,421		269		376		18		(85)		1,999
Total	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Pharmacy Services distribution channel:
Pharmacy network (1)			$	25,012
Mail choice (2)			17,935
Other			269
Total			$	43,216
Three Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	38,867	$	19,023	$	—	$	(10,857)	$	47,033
Front Store	—		—		5,359		—		—		5,359
Premiums	18,959		—		—		25		—		18,984
Net investment income (loss)	147		—		(33)		132		—		246
Other	1,373		179		643		14		(37)		2,172
Total	$	20,479	$	39,046	$	24,992	$	171	$	(10,894)	$	73,794
Pharmacy Services distribution channel:
Pharmacy network (1)			$	23,665
Mail choice (2)			15,202
Other			179
Total			$	39,046

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In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	124,712	$	60,308	$	—	$	(33,829)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,250		777		1,516		51		(203)		6,391
Total	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Pharmacy Services distribution channel:
Pharmacy network (1)			$	72,373
Mail choice (2)			52,339
Other			777
Total			$	125,489
Nine Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	113,161	$	55,781	$	—	$	(33,025)	$	135,917
Front Store	—		—		15,255		—		—		15,255
Premiums	56,869		—		—		58		—		56,927
Net investment income	432		—		13		387		—		832
Other	4,186		520		1,945		43		(118)		6,576
Total	$	61,487	$	113,681	$	72,994	$	488	$	(33,143)	$	215,507
Pharmacy Services distribution channel:
Pharmacy network (1)			$	68,476
Mail choice (2)			44,685
Other			520
Total			$	113,681

_____________________________________________

(1)Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice® activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.

(2)Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program.

Contract Balances

Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, and include ExtraBucks® Rewards and unredeemed Company gift cards. The consideration received remains a contract liability until goods or services have been provided to the customer. In addition, the Company recognizes breakage on Company gift cards based on historical redemption patterns.

The following table provides information about receivables and contract liabilities from contracts with customers:

In millions	September 30, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,016	$	7,932
Contract liabilities (included in accrued expenses)	74		87

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During the nine months ended September 30, 2022 and 2021, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of Company gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or Company gift cards and breakage of Company gift cards. Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	250		286
Redemption and breakage	(263)		(279)
Contract liabilities, end of the period	$	74	$	78

Related Party Transactions

The Company has an equity method investment in SureScripts, LLC (“SureScripts”), which operates a clinical health information network. The Company utilizes this clinical health information network in providing services to its client plan members and retail customers. The Company expensed fees for the use of this network of $16 million in each of the three-month periods ended September 30, 2022 and 2021, and expensed fees for the use of this network of approximately $47 million and $35 million in the nine months ended September 30, 2022 and 2021, respectively. The Company’s investment in and equity in the earnings of SureScripts for all periods presented is immaterial.

The Company has an equity method investment in Heartland Healthcare Services, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $22 million and $20 million for pharmaceutical inventory purchases during the three months ended September 30, 2022 and 2021, respectively, and $66 million and $57 million for pharmaceutical inventory purchases during the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). This standard requires the Company to review cash flow assumptions for its long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires the Company to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other comprehensive income. The rate used to discount the Company’s liability for future policy benefits will be based on an estimate of the yield for an upper-medium grade fixed-income instrument with a duration profile matching that of the Company’s liabilities. In addition, this standard changes the amortization method for deferred acquisition costs and requires additional disclosures regarding the long duration insurance contract liabilities in the Company’s interim and annual financial statements. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the transition date, for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income on the transition date of approximately $1 billion as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

2.Acquisition, Divestitures and Asset Sales

Proposed Signify Health Acquisition

On September 2, 2022, the Company entered into a definitive merger agreement to acquire all of the outstanding shares of Signify Health, Inc. (“Signify Health”) for cash. Under the terms of the merger agreement, Signify Health stockholders will receive $30.50 per share in cash. The total value of the transaction is approximately $8 billion.

14

The proposed acquisition was approved by the Board of Directors at each of the respective companies and the Signify Health stockholders and remains subject to receipt of regulatory approval and satisfaction of other customary closing conditions. On October 19, 2022, Signify Health and CVS Health each received a request for additional information (also known as a “second request”) from the U.S. Department of Justice (the “DOJ”) in connection with the review of the transactions contemplated by the merger agreement by the DOJ under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is expected to close in the first half of 2023.

If the merger agreement is terminated under certain specified circumstances and receipt of regulatory approval has not been obtained by such time, the Company will be required to pay Signify Health a termination fee in an amount equal to $380 million. If the merger agreement is terminated under other certain specified circumstances, including due to Signify Health accepting a superior proposal, Signify Health will be required to pay the Company a termination fee in an amount equal to $228 million.

Assets Held For Sale

Long-Term Care Business

The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its Omnicare® long-term care business (“LTC business”), which is included within the Retail/LTC segment, was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. The carrying value of the LTC business was determined to be greater than its fair value and, accordingly, the Company recorded a loss on assets held for sale of $2.5 billion in the three and nine months ended September 30, 2022 in the Company’s unaudited condensed consolidated statements of operations within the Retail/LTC segment. The LTC business income before income tax provision was not material for the three and nine months ended September 30, 2022 and 2021.

bswift Business

In October 2022, the Company reached an agreement to sell its wholly-owned subsidiary bswift LLC (“bswift business”) which is included in the Health Care Benefits segment. bswift offers software and services that streamline benefits and human resource administration. The sale is expected to close in the fourth quarter of 2022, subject to the satisfaction of customary closing conditions. The bswift business income before income tax provision was not material for the three and nine months ended September 30, 2022 and 2021.

Held-For-Sale Classification

The LTC and bswift businesses met the criteria to be classified as held for sale at September 30, 2022, but did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities were included in the separate held-for-sale line items of the asset and liability sections of the unaudited condensed consolidated balance sheet. The following table summarizes the assets and liabilities held for sale at September 30, 2022:

In millions	September 30, 2022
Assets:
Accounts receivable, net	$	248
Inventories	201
Property and equipment, net	254
Goodwill (1)	475
Deferred income taxes	130
Other	190
Total assets held for sale	$	1,498
Liabilities:
Accounts payable	$	98
Accrued expenses	94
Other	104
Total liabilities held for sale	$	296

_____________________________________________

(1) $475 million of goodwill within the Commercial Business reporting unit was specifically allocated to the bswift business at September 30, 2022.

15

Divestiture of PayFlex

In June 2022, the Company sold PayFlex for approximately $775 million. PayFlex provides services to employers, their employees, and their former employees in the areas of tax-advantaged account reimbursement administration (flexible spending, health reimbursement, health savings, transit and parking), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration and special-member billing administration. The results of this business have historically been reported within the Health Care Benefits segment. The Company recorded a pre-tax gain on the divestiture of $225 million in the nine months ended September 30, 2022, which is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

Divestiture of Thailand Health Care Business

In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), comprised of approximately 266,000 medical members, which was included in the Commercial Business reporting unit within the Health Care Benefits segment. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and, accordingly, the Company recorded a $41 million loss on assets held for sale within the Health Care Benefits segment during the first quarter of 2022. The sale closed in the second quarter of 2022, and the consideration received and ultimate loss on the sale were not material.

International Health Care Benefits Renewal Rights Asset Sale

In May 2022, the Company sold the renewal rights of approximately 200,000 international medical members outside of the Americas, Thailand and India in connection with an Asset Purchase Agreement. As part of this agreement, the Company will introduce and help migrate these existing international medical members to the purchaser upon renewal. The Company expects the migration process to occur over a 16-month period between July 2022 and October 2023. The Company expects to cease writing any new or renewal business for international medical members outside of the Americas after October 31, 2022. The consideration received related to this agreement was not material.

16

3.Investments

Total investments at September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,729	$	17,311	$	20,040	$	3,009	$	20,231	$	23,240
Mortgage loans	58		989		1,047		58		844		902
Other investments	5		2,283		2,288		50		1,950		2,000
Total investments (1)	$	2,792	$	20,583	$	23,375	$	3,117	$	23,025	$	26,142

_____________________________________________

(1)Includes long-term investments of $18 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Debt Securities

Debt securities available for sale at September 30, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
Debt securities:
U.S. government securities	$	2,172	$	—	$	2,172	$	—	$	(191)	$	1,981
States, municipalities and political subdivisions	2,455		—		2,455		1		(182)		2,274
U.S. corporate securities	9,923		—		9,923		13		(1,080)		8,856
Foreign securities	2,820		(9)		2,811		7		(324)		2,494
Residential mortgage-backed securities	859		—		859		—		(109)		750
Commercial mortgage-backed securities	1,203		—		1,203		—		(166)		1,037
Other asset-backed securities	2,791		—		2,791		5		(171)		2,625
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,248	$	(9)	$	22,239	$	26	$	(2,225)	$	20,040
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2022, debt securities with a fair value of $612 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $73 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

17

The net amortized cost and fair value of debt securities at September 30, 2022 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.

In millions	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,299	$	1,288
One year through five years	6,704		6,260
After five years through ten years	4,980		4,347
Greater than ten years	4,403		3,733
Residential mortgage-backed securities	859		750
Commercial mortgage-backed securities	1,203		1,037
Other asset-backed securities	2,791		2,625
Total	$	22,239	$	20,040

18

Summarized below are the debt securities the Company held at September 30, 2022 and December 31, 2021 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position:

	Less than 12 months					Greater than 12 months					Total
In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2022
Debt securities:
U.S. government securities	570	$	1,845	$	179	25	$	125	$	12	595	$	1,970	$	191
States, municipalities and political subdivisions	1,129	1,949		153		122	207		29		1,251	2,156		182
U.S. corporate securities	6,083	7,503		889		848	1,027		191		6,931	8,530		1,080
Foreign securities	1,443	2,005		246		254	383		78		1,697	2,388		324
Residential mortgage-backed securities	489	562		68		69	187		41		558	749		109
Commercial mortgage-backed securities	368	772		101		127	265		65		495	1,037		166
Other asset-backed securities	1,266	2,311		148		163	292		23		1,429	2,603		171
Redeemable preferred securities	14	20		2		1	3		—		15	23		2
Total debt securities	11,362	$	16,967	$	1,786	1,609	$	2,489	$	439	12,971	$	19,456	$	2,225
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business. In performing this review, the Company considered factors such as the quality of the investment security based on research performed by the Company’s internal credit analysts and external rating agencies and the prospects of realizing the carrying value of the security based on the investment’s current prospects for recovery. Unrealized capital losses at September 30, 2022 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2022, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis.

19

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2022 were as follows:

	Supporting experience-rated products				Supporting remaining products				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Due to mature:
Less than one year	$	35	$	—	$	1,176	$	14	$	1,211	$	14
One year through five years	128		6		5,890		445		6,018		451
After five years through ten years	154		22		4,113		615		4,267		637
Greater than ten years	213		39		3,358		638		3,571		677
Residential mortgage-backed securities	11		1		738		108		749		109
Commercial mortgage-backed securities	32		3		1,005		163		1,037		166
Other asset-backed securities	17		2		2,586		169		2,603		171
Total	$	590	$	73	$	18,866	$	2,152	$	19,456	$	2,225

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
New mortgage loans	$	125	$	53	$	305	$	173
Mortgage loans fully repaid	62		88		136		260
Mortgage loans foreclosed	—		—		—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, property condition, market trends, creditworthiness of the borrower and deal structure.

•Category 1 - Represents loans of superior quality.

•Categories 2 to 4 - Represent loans where credit risk is minimal to acceptable; however, these loans may display some susceptibility to economic changes.

•Categories 5 and 6 - Represent loans where credit risk is not substantial, but these loans warrant management’s close attention.

•Category 7 - Represents loans where collections are potentially at risk; if necessary, an impairment is recorded.

20

Based on the Company’s assessments at September 30, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
September 30, 2022
1	$	—	$	—	$	—	$	—	$	—	$	16	$	16
2 to 4	279		247		48		11		54		379		1,018
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	279	$	247	$	48	$	11	$	57	$	405	$	1,047
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Debt securities	$	174	$	157	$	510	$	474
Mortgage loans	14		13		38		41
Other investments	134		109		279		307
Gross investment income	322		279		827		822
Investment expenses	(11)		(11)		(29)		(28)
Net investment income (excluding net realized capital gains or losses)	311		268		798		794
Net realized capital gains (losses) (1)	(110)		(22)		(283)		38
Net investment income (2)	$	201	$	246	$	515	$	832

_____________________________________________

(1)Net realized capital losses include credit-related losses on debt securities of $1 million and yield-related impairment losses on debt securities of $73 million in the three months ended September 30, 2022. Net realized capital losses include credit-related losses on debt securities of $17 million and yield-related impairment losses on debt securities of $121 million in the nine months ended September 30, 2022. Net realized capital losses include yield-related impairment losses on debt securities of $3 million in the three months ended September 30, 2021. Net realized capital gains are net of yield-related impairment losses on debt securities of $35 million in the nine months ended September 30, 2021. There were no credit-related losses on debt securities in the three and nine months ended September 30, 2021.

(2)Net investment income includes $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, and $9 million and $28 million for the three and nine months ended September 30, 2021, respectively, related to investments supporting experience-rated products.

Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Proceeds from sales	$	593	$	668	$	3,556	$	2,935
Gross realized capital gains	3		19		20		61
Gross realized capital losses	28		2		135		12

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4.Fair Value

The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. The Company’s assets and liabilities carried at fair value have been classified within one of three levels of a hierarchy established by GAAP. The following are the levels of the hierarchy and a brief description of the type of valuation information (“valuation inputs”) that qualifies a financial asset or liability for each level:

•Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

•Level 2 – Valuation inputs other than Level 1 that are based on observable market data. These include: quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets, valuation inputs that are observable that are not prices (such as interest rates and credit risks) and valuation inputs that are derived from or corroborated by observable markets.

•Level 3 – Developed from unobservable data, reflecting the Company’s assumptions.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value” in the 2021 Form 10-K.

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There were no financial liabilities measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2022 or December 31, 2021. Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2022
Cash and cash equivalents (1)	$	10,118	$	7,086	$	—	$	17,204
Debt securities:
U.S. government securities	1,949		32		—		1,981
States, municipalities and political subdivisions	—		2,274		—		2,274
U.S. corporate securities	—		8,818		38		8,856
Foreign securities	—		2,486		8		2,494
Residential mortgage-backed securities	—		750		—		750
Commercial mortgage-backed securities	—		1,037		—		1,037
Other asset-backed securities	—		2,625		—		2,625
Redeemable preferred securities	—		23		—		23
Total debt securities	1,949		18,045		46		20,040
Equity securities	104		—		66		170
Total	$	12,171	$	25,131	$	112	$	37,414
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

_____________________________________________

(1)Includes cash and cash equivalents of $7 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

During the three months ended September 30, 2022 there were no transfers into or out of Level 3. During the nine months ended September 30, 2022 there were $29 million of transfers out of Level 3. During the three and nine months ended September 30, 2021, there were no transfers into or out of Level 3.

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The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2022
Assets:
Mortgage loans	$	1,047	$	—	$	—	$	982	$	982
Equity securities (1)	183		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	4		—		—		4		4
Without a fixed maturity	331		—		—		296		296
Long-term debt (2)	52,214		46,375		—		—		46,375
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

(2)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Separate Accounts assets relate to the Company’s large case pensions products which represent funds maintained to meet specific objectives of contract holders. Since contract holders bear the investment risk of these assets, a corresponding Separate Accounts liability has been established equal to the assets. These assets and liabilities are carried at fair value. Separate Accounts financial assets as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	—	$	152	$	—	$	152	$	2	$	186	$	—	$	188
Debt securities	756		1,979		—		2,735		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		410		—		410		—		547		—		547
Total (1)	$	756	$	2,542	$	—	$	3,298	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $20 million and $70 million of other receivables at September 30, 2022 and December 31, 2021, respectively.

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5.Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2022 and 2021:

	Nine Months Ended September 30,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	53,311		48,243
Prior years	(670)		(771)
Total incurred health care costs (1)	52,641		47,472
Less: Claims paid
Current year	43,632		39,887
Prior years	7,468		6,639
Total claims paid	51,100		46,526
Add: Premium deficiency reserve	5		1
Health care costs payable, end of the period, net	10,346		8,873
Add: Reinsurance recoverables	5		4
Health care costs payable, end of the period	$	10,351	$	8,877

_____________________________________________

(1)Total incurred health care costs for the nine months ended September 30, 2022 and 2021 in the table above exclude (i) $5 million and $1 million, respectively, for premium deficiency reserves related to the Company’s Medicaid products, (ii) $56 million and $45 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $274 million and $168 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

The Company’s estimates of prior years’ health care costs payable decreased by $670 million and $771 million, respectively, in the nine months ended September 30, 2022 and 2021, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year.

At September 30, 2022, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2022 related to the current year.

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6.Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2022 and December 31, 2021:

In millions	September 30, 2022		December 31, 2021
Long-term debt
3.5% senior notes due July 2022	$	—	$	1,500
2.75% senior notes due November 2022	—		1,000
2.75% senior notes due December 2022	—		1,250
4.75% senior notes due December 2022	—		399
2.8% senior notes due June 2023	1,300		1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
3.25% senior notes due August 2029	1,750		1,750
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
Finance lease liabilities	1,437		1,300
Other	315		320
Total debt principal	52,726		56,743
Debt premiums	204		219
Debt discounts and deferred financing costs	(716)		(786)
	52,214		56,176
Less:
Current portion of long-term debt	(1,363)		(4,205)
Long-term debt	$	50,851	$	51,971

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

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Long-term Borrowings

In May 2022, the Company exercised the par call option on its outstanding 3.5% senior notes due July 2022 and redeemed for cash on hand the entire $1.5 billion aggregate principal amount.

In August 2022, the Company exercised the par call option on its outstanding 2.75% senior notes due November 2022 (issued by Aetna Inc.) and redeemed for cash on hand the entire $1.0 billion aggregate principal amount.

In September 2022, the Company exercised the par call options on its outstanding 2.75% senior notes due December 2022 and 4.75% senior notes due December 2022 (including notes issued by Omnicare, Inc.) and redeemed for cash on hand the entire $1.25 billion and $399 million aggregate principal amounts, respectively.

7.Shareholders’ Equity

Share Repurchases

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of September 30, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 Repurchase Program permits the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase (“ASR”) transactions, and/or other derivative transactions. The 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the nine months ended September 30, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Dividends

The quarterly cash dividend declared by the Board was $0.55 and $0.50 per share in the three months ended September 30, 2022 and 2021, respectively. Cash dividends declared by the Board were $1.65 and $1.50 per share in the nine months ended September 30, 2022 and 2021, respectively. CVS Health Corporation has paid cash dividends every quarter since becoming a public company. Future dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Board.

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8.Other Comprehensive Income (Loss)

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,190)	$	977	$	778	$	1,214
Other comprehensive loss before reclassifications ($(796), $(73), $(3,306), $(346) pretax)	(711)		(61)		(2,809)		(297)
Amounts reclassified from accumulated other comprehensive income (loss) ($99, $(14), $253, $(15) pretax) (1)	88		(12)		218		(13)
Other comprehensive loss	(623)		(73)		(2,591)		(310)
End of period balance	(1,813)		904		(1,813)		904
Foreign currency translation adjustments:
Beginning of period balance	2		6		—		7
Other comprehensive loss before reclassifications	(7)		(5)		(5)		(6)
Other comprehensive loss	(7)		(5)		(5)		(6)
End of period balance	(5)		1		(5)		1
Net cash flow hedges:
Beginning of period balance	234		241		222		248
Other comprehensive income before reclassifications ($13, $0, $37, $0 pretax)	10		—		28		—
Amounts reclassified from accumulated other comprehensive income ($(2), $(20), $(10), $(29) pretax) (2)	(2)		(15)		(8)		(22)
Other comprehensive income (loss)	8		(15)		20		(22)
End of period balance	242		226		242		226
Pension and other postretirement benefits:
Beginning of period balance	(34)		(54)		(35)		(55)
Amounts reclassified from accumulated other comprehensive loss ($1, $0, $2, $1 pretax) (3)	1		—		2		1
Other comprehensive income	1		—		2		1
End of period balance	(33)		(54)		(33)		(54)
Total beginning of period accumulated other comprehensive income (loss)	(988)		1,170		965		1,414
Total other comprehensive loss	(621)		(93)		(2,574)		(337)
Total end of period accumulated other comprehensive income (loss)	$	(1,609)	$	1,077	$	(1,609)	$	1,077

_____________________________________________

(1)Amounts reclassified from accumulated other comprehensive income (loss) for specifically identified debt securities are included in net investment income in the unaudited condensed consolidated statements of operations.

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(3)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

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9.Earnings (Loss) Per Share

Earnings (loss) per share is computed using the treasury stock method. For periods in which the Company reports net income, diluted earnings per share is determined using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. Stock options and stock appreciation rights to purchase 4 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share in each of the three and nine-month periods ended September 30, 2022 because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, stock options and stock appreciation rights to purchase 8 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share in each of the three and nine-month periods ended September 30, 2021. In addition, due to the net loss attributable to CVS Health in the three months ended September 30, 2022, 8 million potentially dilutive common equivalent shares were excluded from the calculation of diluted earnings per share, as the impact of these shares were antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share for the respective periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2022		2021		2022		2021
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	(3,416)	$	1,598	$	1,847	$	6,604
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,315		1,321		1,313		1,318
Restricted stock units and performance stock units	—		4		6		5
Stock options and stock appreciation rights	—		4		5		3
Weighted average shares, diluted	1,315		1,329		1,324		1,326
Earnings (loss) per share:
Basic	$	(2.60)	$	1.21	$	1.41	$	5.01
Diluted	$	(2.60)	$	1.20	$	1.40	$	4.98

10.Commitments and Contingencies

COVID-19

The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company.

Lease Guarantees

Between 1995 and 1997, the Company sold or spun off a number of subsidiaries, including Bob’s Stores and Linens ‘n Things, each of which subsequently filed for bankruptcy, and Marshalls. In many cases, when a former subsidiary leased a store, the Company provided a guarantee of the former subsidiary’s lease obligations for the initial lease term and any extension thereof pursuant to a renewal option provided for in the lease prior to the time of the disposition. When the subsidiaries were disposed of and accounted for as discontinued operations, the Company’s guarantees remained in place, although each initial purchaser agreed to indemnify the Company for any lease obligations the Company was required to satisfy. If any of the purchasers or any of the former subsidiaries fail to make the required payments under a store lease, the Company could be required to satisfy those obligations, and any significant adverse impact of COVID-19 on such purchasers and/or former subsidiaries increases the risk that the Company will be required to satisfy those obligations. As of September 30, 2022, the Company guaranteed 68 such

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store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the unaudited condensed consolidated balance sheets), with the maximum remaining lease term extending through 2034.

Guaranty Fund Assessments, Market Stabilization and Other Non-Voluntary Risk Sharing Pools

Under guaranty fund laws existing in all states, insurers doing business in those states can be assessed (in most states up to prescribed limits) for certain obligations of insolvent insurance companies to policyholders and claimants. The life and health insurance guaranty associations in which the Company participates that operate under these laws respond to insolvencies of long-term care insurers and life insurers as well as health insurers. The Company’s assessments generally are based on a formula relating to the Company’s health care premiums in the state compared to the premiums of other insurers. Certain states allow assessments to be recovered over time as offsets to premium taxes. Some states have similar laws relating to HMOs and/or other payors such as not-for-profit consumer-governed health plans established under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

In 2009, the Pennsylvania Insurance Commissioner placed long-term care insurer Penn Treaty Network America Insurance Company and one of its subsidiaries (collectively, “Penn Treaty”) in rehabilitation, an intermediate action before insolvency, and subsequently petitioned a state court to convert the rehabilitation into a liquidation. Penn Treaty was placed in liquidation in March 2017. The Company has recorded a liability for its estimated share of future assessments by applicable life and health insurance guaranty associations. It is reasonably possible that in the future the Company may record a liability and expense relating to other insolvencies which could have a material adverse effect on the Company’s operating results, financial condition and cash flows, and the risk is heightened by any significant adverse impact of the COVID-19 pandemic on the solvency of other insurers, including long-term care and life insurers. While historically the Company has ultimately recovered more than half of guaranty fund assessments through statutorily permitted premium tax offsets, significant increases in assessments could lead to legislative and/or regulatory actions that limit future offsets.

HMOs in certain states in which the Company does business are subject to assessments, including market stabilization and other risk-sharing pools, for which the Company is assessed charges based on incurred claims, demographic membership mix and other factors. The Company establishes liabilities for these assessments based on applicable laws and regulations. In certain states, the ultimate assessments the Company pays are dependent upon the Company’s experience relative to other entities subject to the assessment, and the ultimate liability is not known at the financial statement date. While the ultimate amount of the assessment is dependent upon the experience of all pool participants, the Company believes it has adequate reserves to cover such assessments.

Litigation and Regulatory Proceedings

The Company has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by the U.S. Centers for Medicare & Medicaid Services (“CMS”), state insurance and health and welfare departments, the DOJ, state attorneys general, the U.S. Drug Enforcement Administration (the “DEA”), the Federal Trade Commission (the “FTC”) and other governmental authorities.

Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, and governmental special investigations, audits and reviews can be expensive and disruptive. Some of the litigation matters may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. The Company also may be named from time to time in qui tam actions initiated by private third parties that could also be separately pursued by a governmental body. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome.

The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability. None of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s financial condition.

Except as otherwise noted, the Company cannot predict with certainty the timing or outcome of the legal matters described below, and the Company is unable to reasonably estimate a possible loss or range of possible loss in excess of amounts already

30

accrued for these matters. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s financial position. Substantial unanticipated verdicts, fines and rulings, however, do sometimes occur, which could result in judgments against the Company, entry into settlements or a revision to its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions including possible suspension or loss of licensure and/or exclusion from participating in government programs. The outcome of such governmental investigations of proceedings could be material to the Company.

Usual and Customary Pricing Litigation

The Company and certain current and former directors and officers are named as a defendant in a number of lawsuits that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions are brought by a number of different types of plaintiffs, including plan members, private payors, government payors, and shareholders based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. In October 2022, one of the litigating shareholders made a litigation demand to the Board related to these and other issues after his amended derivative complaint was dismissed for failing to demonstrate demand futility. The Company is defending itself against these claims.

PBM Litigation and Investigations

The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its PBM practices.

The Company is facing multiple lawsuits, including by a State Attorney General, governmental subdivisions and several putative class actions, regarding drug pricing and its rebate arrangements with drug manufacturers. These complaints, brought by a number of different types of plaintiffs under a variety of legal theories, generally allege that rebate agreements between the drug manufacturers and PBMs caused inflated prices for certain drug products. The Company is defending itself against these claims. The Company has also received subpoenas, civil investigative demands (“CIDs”) and other requests for documents and information from, and is being investigated by, the FTC and Attorneys General of several states and the District of Columbia regarding its PBM practices, including pricing and rebates. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information.

United States ex rel. Behnke v. CVS Caremark Corporation, et al. (U.S. District Court for the Eastern District of Pennsylvania). In April 2018, the Court unsealed a complaint filed in February 2014. The government has declined to intervene in this case. The relator alleges that the Company submitted, or caused to be submitted, to Part D of the Medicare program Prescription Drug Event data and/or Direct and Indirect Remuneration reports that misrepresented true prices paid by the Company’s PBM to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered by the Company’s PBM. The Company is defending itself against these claims.

Controlled Substances Litigation, Audits and Subpoenas

In December 2017, the U.S. Judicial Panel on Multidistrict Litigation consolidated numerous cases filed against various defendants by plaintiffs such as counties, cities, hospitals, Indian tribes and third-party payors, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The consolidated multidistrict litigation captioned In re National Prescription Opiate Litigation (MDL No. 2804) is pending in the U.S. District Court for the Northern District of Ohio. This multidistrict litigation presumptively includes hundreds of relevant federal court cases that name the Company as a defendant. A significant number of similar cases that name the Company as a defendant in some capacity are pending in state courts.

In addition, the Company has been named as a defendant in similar cases brought by certain state Attorneys General. The Company is defending itself against all such claims. Additionally, the Company has received subpoenas, CIDs and/or other requests for information regarding opioids from state Attorneys General and insurance and other regulators of several U.S. jurisdictions. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information.

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In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; in August 2022, the court issued a judgment jointly against the three defendants in the amount of $651 million to be paid over 15 years, and also ordered certain injunctive relief. The Company is appealing the judgment. In March 2022, CVS Health Corporation and CVS Pharmacy, Inc. entered into a settlement agreement with the State of Florida to resolve claims related to opioid medications dating back more than a decade. Under the terms of the settlement agreement, CVS Health Corporation settled all opioid claims against it and its subsidiaries by the State of Florida for $484 million, which is to be paid over a period of 18 years. During the three months ended March 31, 2022, the Company recorded a $484 million liability associated with this legal settlement. In August 2022, CVS Pharmacy, Inc. entered into an agreement with the State of New Mexico to settle all opioid claims against it and its parents and subsidiaries by the State of New Mexico and participating subdivisions. In September 2022, CVS Pharmacy, Inc. entered into an agreement with the State of West Virginia to settle all opioid claims against it and its parents and subsidiaries by the State of West Virginia and participating subdivisions. Also in September 2022, CVS Pharmacy, Inc. entered into an agreement with the Cherokee Nation to settle all opioid claims against it and its parents and subsidiaries by the Cherokee Nation.

On October 18, 2022, the Company began mediation with a leadership group of a number of state attorneys general and the Plaintiffs’ Executive Committee (“PEC”) to resolve substantially all opioid lawsuits and claims against Company entities. Discussions progress and the Company agreed in principle to a financial amount to resolve substantially all opioid lawsuits and claims against Company entities by states, political subdivisions and tribes, but not private plaintiffs (the “Settlement Framework”). This Settlement Framework is subject to contingencies and uncertainties as to final terms, but is the basis for our negotiation of definitive terms and documentation. The Settlement Framework provides for payment by the Company of approximately $5.0 billion (approximately $4.9 billion to states and political subdivisions and approximately $130 million to tribes) over ten years, beginning in 2023. The non-monetary terms are subject to ongoing negotiations.

Under the Settlement Framework, before the Company determines whether to enter into any final settlement, it will assess the sufficiency of the scope of settlement, based in part on the number and identities of the governmental entities that will participate in any such settlement. The Settlement Framework contemplates that if certain governmental entities do not agree to a settlement under the Settlement Framework, but the Company nonetheless concluded that there was sufficient participation to warrant going forward with the settlement, there would be a corresponding reduction in the amount due from the Company to account for the governmental entities that did not agree. Those non-participating governmental entities would be entitled to pursue their claims against the Company and other defendants. Private plaintiff litigation will also continue.

The Company has concluded that discussions under the Settlement Framework have reached a stage at which a broad settlement of opioid claims by governmental entities is probable, and the loss related thereto can be reasonably estimated as of September 30, 2022. As a result of that conclusion, and its assessment of certain other opioid-related claims including those for which the Company reached agreement in August and September, the Company recorded a total pre-tax charge of $5.2 billion during the three months ended September 30, 2022 reflecting the cash component of the estimated loss. In addition, the Company expects the cash impact in 2023 and 2024 to be less than $500 million in each year. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. Moreover, the Settlement Framework is in its early phases, and there is no assurance that the necessary parties will agree to a definitive settlement agreement or that the contingencies to any agreement will be satisfied. The amount of ultimate loss may differ materially from this accrual.

Because of the many uncertainties associated with any potential settlement arrangement or other resolution of all opioid-related litigation matters, including the uncertain scope of participation by governmental entities in any potential settlement under the Settlement Framework described above and that the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time. The outcome of these legal matters could have a material effect on the Company’s business, financial condition, operating results and/or cash flows.

In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to prescription opioids and other controlled substances at CVS pharmacy locations concerning potential violations of the federal Controlled Substances Act and the federal False Claims Act. In January 2022, the DOJ served the Company with a CID regarding similar subjects. The Company is providing documents and information in response to these matters.

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Prescription Processing Litigation and Investigations

The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its prescription processing practices, including the following:

U.S. ex rel. Bassan et al. v. Omnicare, Inc. and CVS Health Corp. (U.S. District Court for the Southern District of New York). In December 2019, the U.S. Attorney’s Office for the Southern District of New York (the “SDNY”) filed a complaint-in-intervention in this previously sealed qui tam case. The complaint alleges that for certain non-skilled nursing facilities, Omnicare improperly filled prescriptions beyond one year where a valid prescription did not exist and that these dispensing events violated the federal False Claims Act. The Company is defending itself against these claims.

U.S. ex rel. Gill et al. v. CVS Health Corp. et al. (U.S. District Court for the Northern District of Illinois). In July 2022, the Delaware Attorney General’s Office moved for partial intervention as to allegations under the Delaware false claims act related to not escheating alleged overpayments in this previously sealed qui tam case. The federal government and the remaining states declined to intervene on other additional theories in the relator’s complaint. The Company is defending itself against all of the claims.

In July 2017, the Company also received a subpoena from the California Department of Insurance requesting documents concerning the Company’s Omnicare pharmacies’ cycle fill process for assisted living facilities. The Company has been cooperating with the California Department of Insurance and providing documents and information in response to this subpoena.

In December 2016, the Company received a CID from the U.S. Attorney’s Office for the Northern District of New York requesting documents and information in connection with a federal False Claims Act investigation concerning whether the Company’s retail pharmacies improperly submitted certain insulin claims to Part D of the Medicare program rather than Part B of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to this CID.

Provider Proceedings

The Company is named as a defendant in purported class actions and individual lawsuits arising out of its practices related to the payment of claims for services rendered to its members by providers with whom the Company has a contract and with whom the Company does not have a contract (“out-of-network providers”). Among other things, these lawsuits allege that the Company paid too little to its health plan members and/or providers for out-of-network services (including COVID-19 testing) and/or otherwise allege that the Company failed to timely or appropriately pay or administer out-of-network claims and benefits (including the Company’s post payment audit and collection practices and reductions in payments to providers due to sequestration). Other major health insurers are the subject of similar litigation or have settled similar litigation.

The Company also has received subpoenas and/or requests for documents and other information from, and been investigated by, state Attorneys General and other state and/or federal regulators, legislators and agencies relating to, and the Company is involved in other litigation regarding, its out-of-network benefit payment and administration practices. It is reasonably possible that others could initiate additional litigation or additional regulatory action against the Company with respect to its out-of-network benefit payment and/or administration practices.

CMS Actions

CMS regularly audits the Company’s performance to determine its compliance with CMS’s regulations and its contracts with CMS and to assess the quality of services it provides to Medicare beneficiaries. CMS uses various payment mechanisms to allocate and adjust premium payments to the Company’s and other companies’ Medicare plans by considering the applicable health status of Medicare members as supported by information prepared, maintained and provided by providers. The Company collects claim and encounter data from providers and generally relies on providers to appropriately code their submissions to the Company and document their medical records, including the diagnosis data submitted to the Company with claims. CMS pays increased premiums to Medicare Advantage plans and Medicare PDP plans for members who have certain medical conditions identified with specific diagnosis codes. Federal regulators review and audit the providers’ medical records to determine whether those records support the related diagnosis codes that determine the members’ health status and the resulting risk-adjusted premium payments to the Company. In that regard, CMS has instituted risk adjustment data validation (“RADV”) audits of various Medicare Advantage plans, including certain of the Company’s plans, to validate coding practices and supporting medical record documentation maintained by providers and the resulting risk-adjusted premium payments to the

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plans. CMS may require the Company to refund premium payments if the Company’s risk-adjusted premiums are not properly supported by medical record data. The Office of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) also is auditing the Company’s risk adjustment-related data and that of other companies. The Company expects CMS and the OIG to continue these types of audits.

In 2012, CMS revised its audit methodology for RADV audits to determine refunds payable by Medicare Advantage plans for contract year 2011 and forward. Under the revised methodology, among other things, CMS will extrapolate the error rate identified in the audit sample of approximately 200 members to all risk-adjusted premium payments made under the contract being audited. For contract years prior to 2011, CMS did not extrapolate sample error rates to the entire contract. As a result, the revised methodology may increase the Company’s exposure to premium refunds to CMS based on incomplete medical records maintained by providers. Since 2013, CMS has selected certain of the Company’s Medicare Advantage contracts for various contract years for RADV audit, and the number of RADV audits continues to increase. The Company is currently unable to predict which of its Medicare Advantage contracts will be selected for future audit, the amounts of any retroactive refunds of, or prospective adjustments to, Medicare Advantage premium payments made to the Company, the effect of any such refunds or adjustments on the actuarial soundness of the Company’s Medicare Advantage bids, or whether any RADV audit findings would require the Company to change its method of estimating future premium revenue in future bid submissions to CMS or compromise premium assumptions made in the Company’s bids for prior contract years, the current contract year or future contract years. Any premium or fee refunds or adjustments resulting from regulatory audits, whether as a result of RADV, Public Exchange related or other audits by CMS, the OIG or otherwise, including audits of the Company’s minimum medical loss ratio rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, cash flows and/or financial condition.

Medicare and Medicaid CIDs

The Company has received CIDs from the Civil Division of the DOJ in connection with a current investigation of the Company’s patient chart review processes in connection with risk adjustment data submissions under Parts C and D of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to these CIDs.

In May 2017, the Company received a CID from the SDNY requesting documents and information concerning possible false claims submitted to Medicare in connection with reimbursements for prescription drugs under the Medicare Part D program. The Company has been cooperating with the government and providing documents and information in response to this CID.

Stockholder Matters

Beginning in February 2019, multiple class action complaints, as well as a derivative complaint, were filed by putative plaintiffs against the Company and certain current and former officers and directors. The plaintiffs in these cases assert a variety of causes of action under federal securities laws that are premised on allegations that the defendants made certain omissions and misrepresentations relating to the performance of the Company’s LTC business unit. The Company and its current and former officers and directors are defending themselves against these claims. Since filing, several of the cases have been consolidated, and the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), was dismissed with prejudice in February 2021. Plaintiffs appealed that decision to the First Circuit after their motion for reconsideration was denied, and in August 2022 the First Circuit affirmed the dismissal. In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford) and In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich) have been stayed pending the outcome of the First Circuit appeal. Plaintiffs in In re CVS Health Corp. Securities Litigation filed an amended complaint, which the Company moved to dismiss in October 2022.

In August and September 2020, two class actions under the Employee Retirement Income Security Act of 1974 (“ERISA”) were filed in the U.S. District Court for the District of Connecticut against CVS Health, Aetna Inc. (“Aetna”), and several current and former executives, directors and/or members of Aetna’s Compensation and Talent Management Committee: Radcliffe v. Aetna Inc., et al. and Flaim v. Aetna Inc., et al. The plaintiffs in these cases assert a variety of causes of action premised on allegations that the defendants breached fiduciary duties and engaged in prohibited transactions relating to participants in the Aetna 401(k) Plan’s investment in company stock between December 3, 2017 and February 20, 2019, claiming losses related to the performance of the Company’s LTC business unit. The district court consolidated the actions, and in October 2021, dismissed the consolidated action without prejudice. Plaintiffs filed an amended consolidated complaint, which the Company has moved to dismiss. In October 2022, the court granted the Company’s motion to dismiss with prejudice. Plaintiffs have appealed this decision to the Second Circuit. The Company also received a related document request pursuant to

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ERISA § 104(b), to which the Company has responded. The Company and its current and former officers and directors are defending themselves against these claims.

In December 2021, the Company received a demand for inspection of books and records pursuant to Delaware Corporation Law Section 220 (the “Demand”). The Demand purports to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids.

Other Legal and Regulatory Proceedings

The Company is also a party to other legal proceedings and is subject to government investigations, inquiries and audits and has received and is cooperating with the government in response to CIDs, subpoenas or similar process from various governmental agencies requesting information. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, breach of fiduciary duty, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, denial of or failure to timely or appropriately pay or administer claims and benefits, provider network structure (including the use of performance-based networks and termination of provider contracts), rescission of insurance coverage, improper disclosure or use of personal information, anticompetitive practices, general contractual matters, product liability, intellectual property litigation and employment litigation. Some of these other legal proceedings are or are purported to be class actions or derivative claims. The Company is defending itself against the claims brought in these matters.

Awards to the Company and others of certain government contracts, particularly Medicaid contracts and other contracts with government customers in the Company’s Health Care Benefits segment, frequently are subject to protests by unsuccessful bidders. These protests may result in awards to the Company being reversed, delayed or modified. The loss or delay in implementation of any government contract could adversely affect the Company’s operating results. The Company will continue to defend contract awards it receives.

There also continues to be a heightened level of review and/or audit by regulatory authorities and legislators of, and increased litigation regarding, the Company’s and the rest of the health care and related benefits industry’s business and reporting practices, including premium rate increases, utilization management, development and application of medical policies, complaint, grievance and appeal processing, information privacy, provider network structure (including provider network adequacy, the use of performance-based networks and termination of provider contracts), provider directory accuracy, calculation of minimum medical loss ratios and/or payment of related rebates, delegated arrangements, rescission of insurance coverage, limited benefit health products, student health products, pharmacy benefit management practices (including manufacturers’ rebates, pricing, the use of narrow networks and the placement of drugs in formulary tiers), sales practices, customer service practices, vendor oversight and claim payment practices (including payments to out-of-network providers).

As a leading national health solutions company, the Company regularly is the subject of government actions of the types described above. These government actions may prevent or delay the Company from implementing planned premium rate increases and may result, and have resulted, in restrictions on the Company’s businesses, changes to or clarifications of the Company’s business practices, retroactive adjustments to premiums, refunds or other payments to members, beneficiaries, states or the federal government, withholding of premium payments to the Company by government agencies, assessments of damages, civil or criminal fines or penalties, or other sanctions, including the possible suspension or loss of licensure and/or suspension or exclusion from participation in government programs.

The Company can give no assurance that its businesses, financial condition, operating results and/or cash flows will not be materially adversely affected, or that the Company will not be required to materially change its business practices, based on: (i) future enactment of new health care or other laws or regulations; (ii) the interpretation or application of existing laws or regulations as they may relate to one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iii) pending or future federal or state government investigations of one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iv) pending or future government audits, investigations or enforcement actions against the Company; (v) adverse developments in any pending qui tam lawsuit against the Company, whether sealed or unsealed, or in any future qui tam lawsuit that may be filed against the Company; or (vi) adverse developments in pending or future legal proceedings against the Company or affecting one or more of the industries in which the Company competes and/or the health care industry generally.

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11.Segment Reporting

The Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, 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 (loss) (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 consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income below for further context regarding the items excluded from operating income (loss) 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.

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The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals:

In millions	Health Care Benefits		Pharmacy  Services (1)		Retail/ LTC		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2022
Revenues from external customers	$	22,387	$	40,545	$	17,994	$	32	$	—	$	80,958
Intersegment revenues	23		2,671		8,722		—		(11,416)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,511		43,216		26,706		142		(11,416)		81,159
Adjusted operating income (loss)	1,544		1,877		1,398		(417)		(169)		4,233
September 30, 2021
Revenues from external customers	$	20,311	$	36,851	$	16,347	$	39	$	—	$	73,548
Intersegment revenues	21		2,195		8,678		—		(10,894)		—
Net investment income (loss)	147		—		(33)		132		—		246
Total revenues	20,479		39,046		24,992		171		(10,894)		73,794
Adjusted operating income (loss)	1,106		1,773		1,723		(343)		(186)		4,073
Nine Months Ended
September 30, 2022
Revenues from external customers	$	68,029	$	116,600	$	53,380	$	97	$	—	$	238,106
Intersegment revenues	69		8,889		25,074		—		(34,032)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,376		125,489		78,410		378		(34,032)		238,621
Adjusted operating income (loss)	5,126		5,368		4,865		(1,277)		(556)		13,526
September 30, 2021
Revenues from external customers	$	60,993	$	105,909	$	47,672	$	101	$	—	$	214,675
Intersegment revenues	62		7,772		25,309		—		(33,143)		—
Net investment income	432		—		13		387		—		832
Total revenues	61,487		113,681		72,994		488		(33,143)		215,507
Adjusted operating income (loss)	4,502		5,035		5,166		(1,015)		(523)		13,165

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $2.9 billion and $2.8 billion of retail co-payments for the three months ended September 30, 2022 and 2021, respectively, and $9.8 billion and $9.0 billion of retail co-payments for the nine months ended September 30, 2022 and 2021, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis.

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The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Operating income (loss) (GAAP measure)	$	(3,931)	$	3,061	$	4,128	$	10,964
Amortization of intangible assets (1)	464		561		1,398		1,730
Opioid litigation charges (2)	5,220		—		5,704		—
Loss on assets held for sale (3)	2,480		—		2,521		—
Gain on divestiture of subsidiary (4)	—		—		(225)		—
Acquisition-related integration costs (5)	—		20		—		101
Goodwill impairment (6)	—		431		—		431
Acquisition purchase price adjustment outside of measurement period (7)	—		—		—		(61)
Adjusted operating income	$	4,233	$	4,073	$	13,526	$	13,165

_____________________________________________

(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 unaudited 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, 2022 the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and governmental entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(3)During the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the LTC reporting unit within the Retail/LTC segment. The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its LTC business was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. As of September 30, 2022, the LTC business met the criteria for held-for-sale accounting and the net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the third quarter of 2022. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which was included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the first quarter of 2022. The sale closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(4)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex, which the Company sold in June 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statement of operations within the Health Care Benefits segment.

(5)During the three and nine months ended September 30, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(6)During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

(7)In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of CVS Health Corporation

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of CVS Health Corporation (the Company) as of September 30, 2022, the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2022 and 2021, the related condensed consolidated statements of shareholders’ equity for the three-month periods ended March 31, 2022 and 2021, June 30, 2022 and 2021, and September 30, 2022 and 2021, the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2022 and 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 9, 2022, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Boston, Massachusetts

November 2, 2022

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Overview of Business

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a diversified health solutions company united around a common purpose of helping people on their path to better health. In an increasingly connected and digital world, we are meeting people wherever they are and changing health care to meet their needs. The Company has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with over 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below.

Overview of the Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services, and health information technology products and services. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers. The Company will enter Public Exchanges in four additional states effective January 2023. Open enrollment for the 2023 calendar year has begun in each of these twelve states.

Overview of the Pharmacy Services Segment

The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services.

Overview of the Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, coronavirus disease 2019 (“COVID-19”) and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2022, the Retail/

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LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Overview of the Corporate/Other Segment

The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of:

•Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and

•Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.

Overview of Current Trends

We also face trends and uncertainties specific to our reportable segments, certain of which are summarized below and also discussed in the review of our segment results. For the remainder of the year, the Company believes you should consider the following important information:

•The Health Care Benefits segment is expected to continue to benefit from Medicare and Commercial membership growth, partially offset by the impact of the International Health Care Benefits Renewal Rights Asset sale as described in Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ to the unaudited condensed consolidated financial statements. The Company’s outlook incorporates the extension of the public health emergency into the early part of the first quarter of 2023. The projected MBR is expected to decrease compared to 2021, reflecting pricing and a reduction in COVID-19 related medical costs.

•The Pharmacy Services segment is expected to continue to benefit from the Company’s ability to drive further improvements in purchasing economics and strong pharmacy network volume. These increases are expected to be partially offset by continued client price improvements, decreased contributions from pharmacy and/or other administrative services for Covered Entities and regulation of pharmacy pricing.

•The Retail/LTC segment is expected to continue to benefit from increased prescription volume and improved generic drug purchasing, partially offset by continued pharmacy reimbursement pressure and incremental operating expenses as the Company continues to invest in its workforce and enhance its customer experience. As noted above, the Company’s outlook incorporates the extension of the public health emergency into the early part of the first quarter of 2023. The Company expects that COVID-19 vaccinations, including the impact of the bivalent COVID-19 booster, and diagnostic testing will continue in 2022, albeit at lower levels than those experienced during 2021. The Company expects to see continued strength in front store sales, including sales of over-the-counter (“OTC”) test kits, in 2022. The extent of COVID-19 vaccinations, diagnostic testing and OTC test kit sales will be dependent upon various factors including vaccine hesitancy, the emergence of new variants, government testing initiatives and the availability and administration of pediatric and booster vaccinations.

•The Company is expected to benefit from the continuation of its enterprise-wide cost savings initiatives, which aim to reduce the Company’s operating cost structure in a way that improves the consumer experience and is sustainable. Key drivers include:

•Investments in digital, technology and analytics capabilities that will streamline processes and improve outcomes,

•Implementing workforce and workplace strategies, and

•Deploying vendor and procurement strategies.

•The Company expects changes to its business environment to continue as elected and other government officials at the national and state levels continue to propose and enact significant modifications to public policy and existing laws and regulations that govern or impact the Company’s businesses.

•The COVID-19 pandemic continues to impact the economies of the U.S. and other countries around the world. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic, as well as the pandemic’s impact on the U.S. and global economies, global supply chain, consumer behavior, and health care utilization patterns. In addition, as described in the “Government Regulation” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”), federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants may not effectively combat the severity and/or duration

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of the COVID-19 pandemic, and have resulted in a myriad of impacts on the Company’s businesses. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material.

The Company’s current expectations described above are forward-looking statements. Please see the “Cautionary Statement Concerning Forward-Looking Statements” in this Form 10-Q for information regarding important factors that may cause the Company’s actual results to differ from those currently projected and/or otherwise materially affect the Company.

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Operating Results

The following discussion explains the material changes in the Company’s operating results for the three and nine months ended September 30, 2022 and 2021, and the significant developments affecting the Company’s financial condition since December 31, 2021. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the 2021 Form 10-K.

Summary of Consolidated Financial Results

									Change
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30, 2022 vs 2021				Nine Months Ended September 30, 2022 vs 2021
In millions	2022		2021		2022		2021		$		%		$		%
Revenues:
Products	$	57,643	$	51,853	$	166,959	$	149,765	$	5,790	11.2	%	$	17,194	11.5	%
Premiums	21,003		18,984		63,894		56,927		2,019		10.6	%	6,967		12.2	%
Services	2,312		2,711		7,253		7,983		(399)		(14.7)	%	(730)		(9.1)	%
Net investment income	201		246		515		832		(45)		(18.3)	%	(317)		(38.1)	%
Total revenues	81,159		73,794		238,621		215,507		7,365		10.0	%	23,114		10.7	%
Operating costs:
Cost of products sold	50,365		45,011		145,164		129,425		5,354		11.9	%	15,739		12.2	%
Benefit costs	17,419		16,081		52,976		47,686		1,338		8.3	%	5,290		11.1	%
Opioid litigation charges	5,220		—		5,704		—		5,220		100.0	%	5,704		100.0	%
Loss on assets held for sale	2,480		—		2,521		—		2,480		100.0	%	2,521		100.0	%
Goodwill impairment	—		431		—		431		(431)		(100.0)	%	(431)		(100.0)	%
Operating expenses	9,606		9,210		28,128		27,001		396		4.3	%	1,127		4.2	%
Total operating costs	85,090		70,733		234,493		204,543		14,357		20.3	%	29,950		14.6	%
Operating income (loss)	(3,931)		3,061		4,128		10,964		(6,992)		(228.4)	%	(6,836)		(62.3)	%
Interest expense	566		602		1,735		1,895		(36)		(6.0)	%	(160)		(8.4)	%
Loss on early extinguishment of debt	—		363		—		363		(363)		(100.0)	%	(363)		(100.0)	%
Other income	(41)		(49)		(126)		(144)		8		16.3	%	18		12.5	%
Income (loss) before income tax provision	(4,456)		2,145		2,519		8,850		(6,601)		(307.7)	%	(6,331)		(71.5)	%
Income tax provision (benefit)	(1,047)		558		654		2,248		(1,605)		(287.6)	%	(1,594)		(70.9)	%
Net income (loss)	(3,409)		1,587		1,865		6,602		(4,996)		(314.8)	%	(4,737)		(71.8)	%
Net (income) loss attributable to noncontrolling interests	(7)		11		(18)		2		(18)		(163.6)	%	(20)		(1000.0)	%
Net income (loss) attributable to CVS Health	$	(3,416)	$	1,598	$	1,847	$	6,604	$	(5,014)	(313.8)	%	$	(4,757)	(72.0)	%

Commentary - Three Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $7.4 billion, or 10.0%, in the three months ended September 30, 2022 compared to the prior year driven by growth across all segments.

•Please see “Segment Analysis” later in this report for additional information about the revenues of the Company’s segments.

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Operating expenses

•Operating expenses increased $396 million, or 4.3%, in the three months ended September 30, 2022 compared to the prior year. The increase in operating expenses was primarily due to incremental costs associated with growth in the business.

•Operating expenses as a percentage of total revenues were 11.8% in the three months ended September 30, 2022, a decrease of 70 basis points compared to the prior year. The decrease in operating expenses as a percentage of total revenues was primarily due to the increases in total revenues described above.

•Please see “Segment Analysis” later in this report for additional information about the operating expenses of the Company’s segments.

Operating loss

•During the three months ended September 30, 2022, the Company incurred an operating loss of $3.9 billion compared to $3.1 billion of operating income in the prior year. The difference was primarily driven by $5.2 billion in opioid litigation charges, which are reflected in the Corporate/Other segment, and a $2.5 billion loss on assets held for sale to write-down the Company’s Omnicare® long-term care business (“LTC business”) in the current year, partially offset by the absence of a $431 million goodwill impairment charge on the remaining goodwill of the LTC reporting unit recorded in the prior year in the Retail/LTC segment. These losses were partially offset by operating income in the Health Care Benefits and Pharmacy Services segments.

•Please see “Segment Analysis” later in this report for additional information about the operating results of the Company’s segments.

Interest expense

•Interest expense decreased $36 million, or 6.0%, in the three months ended September 30, 2022 compared to the prior year due to lower debt in the three months ended September 30, 2022. See “Liquidity and Capital Resources” later in this report for additional information.

Loss on early extinguishment of debt

•During the three months ended September 30, 2021, the loss on early extinguishment of debt relates to the Company’s repayment of approximately $2.0 billion of its outstanding senior notes pursuant to its tender offer for such notes in August 2021 which resulted in a loss on early extinguishment of debt of $363 million.

Income tax provision

•Due to the pre-tax loss in the three months ended September 30, 2022, the Company recorded an income tax benefit of 23.5%, compared to an income tax expense of 26.0% for the three months ended September 30, 2021. The difference in the tax rate was primarily due to certain nondeductible legal charges recorded in the three months ended September 30, 2022.

Commentary - Nine Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $23.1 billion, or 10.7%, in the nine months ended September 30, 2022 compared to the prior year driven by growth across all segments.

•Please see “Segment Analysis” later in this report for additional information about the revenues of the Company’s segments.

Operating expenses

•Operating expenses increased $1.1 billion, or 4.2%, in the nine months ended September 30, 2022 compared to the prior year. The increase in operating expenses was primarily due to incremental costs associated with growth in the business, partially offset by a $225 million pre-tax gain on the sale of PayFlex Holdings, Inc. (“PayFlex”), in June 2022.

•Operating expenses as a percentage of total revenues were 11.8% in the nine months ended September 30, 2022, a decrease of 70 basis points compared to the prior year. The decrease in operating expenses as a percentage of total revenues was primarily due to the increases in total revenues described above.

•Please see “Segment Analysis” later in this report for additional information about the operating expenses of the Company’s segments.

Operating income

•Operating income decreased $6.8 billion, or 62.3%, in the nine months ended September 30, 2022 compared to the prior year primarily driven by the opioid litigation charges reflected in the Corporate/Other segment described above and declines in the Retail/LTC segment as a result of the loss on assets held for sale of $2.5 billion to write-down the Company’s LTC business in the current year, partially offset by the absence of a $431 million goodwill impairment charge

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on the remaining goodwill of the LTC reporting unit recorded in the nine months ended September 30, 2021. These decreases were partially offset by increases in the Health Care Benefits segment, which included the $225 million pre-tax gain on the sale of PayFlex and a decrease in amortization of intangible assets, as well as the Pharmacy Services segment.

•Please see “Segment Analysis” later in this report for additional information about the operating results of the Company’s segments.

Interest expense

•Interest expense decreased $160 million, or 8.4%, in the nine months ended September 30, 2022 compared to the prior year due to lower debt in the nine months ended September 30, 2022. See “Liquidity and Capital Resources” later in this report for additional information.

Loss on early extinguishment of debt

•During the nine months ended September 30, 2021, the loss on early extinguishment of debt relates to the Company’s repayment of approximately $2.0 billion of its outstanding senior notes pursuant to its tender offer for such notes in August 2021 which resulted in a loss on early extinguishment of debt of $363 million.

Income tax provision

•The effective income tax rate was 26.0% for the nine months ended September 30, 2022 compared to 25.4% for the nine months ended September 30, 2021. The increase in the effective income tax rate was primarily due to certain nondeductible legal charges and basis differences on the sale of PayFlex in the nine months ended September 30, 2022, partially offset by the impact of certain discrete tax items recognized in the first and third quarters of 2022.

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Segment Analysis

The following discussion of segment operating results is presented based on the Company’s reportable segments in accordance with the accounting guidance for segment reporting and is consistent with the segment disclosure in Note 11 ‘‘Segment Reporting’’ to the unaudited condensed consolidated financial statements.

The Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, 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 (loss) (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 (loss) (GAAP measure) to adjusted operating income below for further context regarding the items excluded from operating income (loss) 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	Health Care Benefits		Pharmacy Services (1)		Retail/ LTC		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2022
Total revenues	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Adjusted operating income (loss)	1,544		1,877		1,398		(417)		(169)		4,233
September 30, 2021
Total revenues	20,479		39,046		24,992		171		(10,894)		73,794
Adjusted operating income (loss)	1,106		1,773		1,723		(343)		(186)		4,073
Nine Months Ended
September 30, 2022
Total revenues	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Adjusted operating income (loss)	5,126		5,368		4,865		(1,277)		(556)		13,526
September 30, 2021
Total revenues	61,487		113,681		72,994		488		(33,143)		215,507
Adjusted operating income (loss)	4,502		5,035		5,166		(1,015)		(523)		13,165

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $2.9 billion and $2.8 billion of retail co-payments for the three months ended September 30, 2022 and 2021, respectively, and $9.8 billion and $9.0 billion of retail co-payments for the nine months ended September 30, 2022 and 2021, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis.

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The following are reconciliations of consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income, as well as reconciliations of segment GAAP operating income (loss) to segment adjusted operating income:

	Three Months Ended September 30, 2022
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	1,244	$	1,836	$	(1,205)	$	(5,637)	$	(169)	$	(3,931)
Amortization of intangible assets (1)	300		41		123		—		—		464
Opioid litigation charges (2)	—		—		—		5,220		—		5,220
Loss on assets held for sale (3)	—		—		2,480		—		—		2,480
Adjusted operating income (loss)	$	1,544	$	1,877	$	1,398	$	(417)	$	(169)	$	4,233

	Three Months Ended September 30, 2021
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	716	$	1,730	$	1,165	$	(364)	$	(186)	$	3,061
Amortization of intangible assets (1)	390		43		127		1		—		561
Acquisition-related integration costs (4)	—		—		—		20		—		20
Goodwill impairment (5)	—		—		431		—		—		431
Adjusted operating income (loss)	$	1,106	$	1,773	$	1,723	$	(343)	$	(186)	$	4,073

	Nine Months Ended September 30, 2022
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	4,407	$	5,242	$	2,018	$	(6,983)	$	(556)	$	4,128
Amortization of intangible assets (1)	903		126		367		2		—		1,398
Opioid litigation charges (2)	—		—		—		5,704		—		5,704
Loss on assets held for sale (3)	41		—		2,480		—		—		2,521
Gain on divestiture of subsidiary (6)	(225)		—		—		—		—		(225)
Adjusted operating income (loss)	$	5,126	$	5,368	$	4,865	$	(1,277)	$	(556)	$	13,526

	Nine Months Ended September 30, 2021
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	3,369	$	4,887	$	4,349	$	(1,118)	$	(523)	$	10,964
Amortization of intangible assets (1)	1,194		148		386		2		—		1,730
Acquisition-related integration costs (4)	—		—		—		101		—		101
Goodwill impairment (5)	—		—		431		—		—		431
Acquisition purchase price adjustment outside of measurement period (7)	(61)		—		—		—		—		(61)
Adjusted operating income (loss)	$	4,502	$	5,035	$	5,166	$	(1,015)	$	(523)	$	13,165

_____________________________________________

(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 unaudited 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

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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, 2022 the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and governmental entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(3)During the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the LTC reporting unit within the Retail/LTC segment. The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its LTC business was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. As of September 30, 2022, the LTC business met the criteria for held-for-sale accounting and the net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the third quarter of 2022. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), which was included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the first quarter of 2022. The sale closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(4)During the three and nine months ended September 30, 2021, acquisition-related integration costs relate to the Company’s acquisition (the “Aetna Acquisition”) of Aetna Inc (“Aetna”). The acquisition-related integration costs are reflected in the unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(5)During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

(6)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex, which the Company sold in June 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statement of operations within the Health Care Benefits segment.

(7)In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment.

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Health Care Benefits Segment

The following table summarizes the Health Care Benefits segment’s performance for the respective periods:

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2022 vs 2021					Nine Months Ended September 30, 2022 vs 2021
In millions, except percentages and basis points (“bps”)	2022			2021			2022			2021			$			%		$			%
Revenues:
Premiums	$	20,989		$	18,959		$	63,848		$	56,869		$	2,030		10.7	%	$	6,979		12.3	%
Services	1,421			1,373			4,250			4,186			48			3.5	%	64			1.5	%
Net investment income	101			147			278			432			(46)			(31.3)	%	(154)			(35.6)	%
Total revenues	22,511			20,479			68,376			61,487			2,032			9.9	%	6,889			11.2	%
Benefit costs	17,531			16,260			53,191			47,971			1,271			7.8	%	5,220			10.9	%
MBR	83.5		%	85.8		%	83.3		%	84.4		%	(230)		bps			(110)		bps
Loss on assets held for sale	$	—		$	—		$	41		$	—		$	—		—	%	$	41		100.0	%
Operating expenses	3,736			3,503			10,737			10,147			233			6.7	%	590			5.8	%
Operating expenses as a % of total revenues	16.6		%	17.1		%	15.7		%	16.5		%
Operating income	$	1,244		$	716		$	4,407		$	3,369		$	528		73.7	%	$	1,038		30.8	%
Operating income as a % of total revenues	5.5		%	3.5		%	6.4		%	5.5		%
Adjusted operating income (1)	$	1,544		$	1,106		$	5,126		$	4,502		$	438		39.6	%	$	624		13.9	%
Adjusted operating income as a % of total revenues	6.9		%	5.4		%	7.5		%	7.3		%
Premium revenues (by business):
Government	$	15,433		$	13,903		$	47,379		$	41,717		$	1,530		11.0	%	$	5,662		13.6	%
Commercial	5,556			5,056			16,469			15,152			500			9.9	%	1,317			8.7	%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Health Care Benefits segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

Commentary - Three Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $2.0 billion, or 9.9%, to $22.5 billion in the three months ended September 30, 2022 compared to the prior year driven by growth across all product lines.

Medical Benefit Ratio (“MBR”)

•Medical benefit ratio is calculated as benefit costs divided by premium revenues and represents the percentage of premium revenues spent on medical benefits for the Company’s Insured members. Management uses MBR to assess the underlying business performance and underwriting of its insurance products, understand variances between actual results and expected results and identify trends in period-over-period results. MBR provides management and investors with information useful in assessing the operating results of the Company’s Insured Health Care Benefits products.

•The MBR decreased to 83.5% in the three months ended September 30, 2022 compared to 85.8% in the prior year reflective of the net favorable impact of COVID-19 compared to the prior year and strong underlying performance, including higher favorable development of prior-periods’ health care cost estimates in the three months ended September 30, 2022 compared to the prior year.

Operating expenses

•Operating expenses in the Health Care Benefits segment include selling, general and administrative expenses and depreciation and amortization expenses.

•Operating expenses increased $233 million, or 6.7%, in the three months ended September 30, 2022 compared to the prior year primarily driven by increased operating expenses to support the growth across all product lines described above, as well as incremental investments in the business.

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•Operating expenses as a percentage of total revenues decreased to 16.6% in the three months ended September 30, 2022 compared to 17.1% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income increased $438 million, or 39.6%, in the three months ended September 30, 2022 compared to the prior year primarily driven by the net favorable impact of COVID-19 compared to the prior year and strong underlying performance, including higher favorable development of prior-periods’ health care cost estimates in the three months ended September 30, 2022 compared to the prior year. These increases were partially offset by incremental investments to support growth in the business and net realized capital losses.

Commentary - Nine Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $6.9 billion, or 11.2%, to $68.4 billion in the nine months ended September 30, 2022 compared to the prior year driven by growth across all product lines.

Medical Benefit Ratio

•The MBR decreased to 83.3% in the nine months ended September 30, 2022 compared to 84.4% in the prior year reflective of strong underlying performance and the net favorable impact of COVID-19 compared to the prior year.

Loss on assets held for sale

•During the nine months ended September 30, 2022, the Company recorded a $41 million loss on assets held for sale on its Thailand business, which is included in the Commercial Business reporting unit within the Health Care Benefits segment. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ to the unaudited condensed consolidated financial statements for additional information.

Operating expenses

•Operating expenses increased $590 million, or 5.8%, in the nine months ended September 30, 2022 compared to the prior year primarily driven by increased operating expenses to support the growth across all product lines described above, as well as incremental investments in the business, partially offset by the $225 million pre-tax gain on the sale of PayFlex.

•Operating expenses as a percentage of total revenues decreased to 15.7% in the nine months ended September 30, 2022 compared to 16.5% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income increased $624 million, or 13.9%, in the nine months ended September 30, 2022 compared to the prior year primarily driven by strong underlying performance, the net favorable impact of COVID-19 compared to the prior year and membership growth. These increases were partially offset by incremental investments to support growth in the business and net realized capital losses.

The following table summarizes the Health Care Benefits segment’s medical membership for the respective periods:

	September 30, 2022			June 30, 2022			December 31, 2021			September 30, 2021
In thousands	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total
Medical membership:
Commercial	3,159	13,852	17,011	3,158	13,835	16,993	3,258	13,530	16,788	3,224	13,529	16,753
Medicare Advantage	3,260	—	3,260	3,216	—	3,216	2,971	—	2,971	2,953	—	2,953
Medicare Supplement	1,345	—	1,345	1,314	—	1,314	1,285	—	1,285	1,242	—	1,242
Medicaid	2,181	490	2,671	2,425	484	2,909	2,333	471	2,804	2,289	460	2,749
Total medical membership	9,945	14,342	24,287	10,113	14,319	24,432	9,847	14,001	23,848	9,708	13,989	23,697
Supplemental membership information:
Medicare Prescription Drug Plan (stand-alone)			6,090			6,051			5,777			5,740

Medical Membership

•Medical membership represents the number of members covered by the Company’s Insured and ASC medical products and related services at a specified point in time. Management uses this metric to understand variances between actual medical

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membership and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of medical membership on segment total revenues and operating results.

•Medical membership as of September 30, 2022 of 24.3 million decreased 145,000 members compared with June 30, 2022, reflecting a decline in Medicaid membership, partially offset by increases in Medicare and Commercial membership. The decline in Medicaid membership reflects the expected loss of a large customer during the three months ended September 30, 2022.

•Medical membership as of September 30, 2022 of 24.3 million increased 590,000 members compared with September 30, 2021, reflecting increases in Medicare and Commercial membership, partially offset by a decline in Medicaid membership, as a result of the expected loss of a large customer.

Medicare Update

On April 4, 2022, the U.S. Centers for Medicare & Medicaid Services (“CMS”) issued its final notice detailing final 2023 Medicare Advantage benchmark payment rates. Final 2023 Medicare Advantage rates resulted in an increase in industry benchmark rates of approximately 5.0%.

The ACA ties a portion of each Medicare Advantage plan’s reimbursement to the plan’s “star ratings.” Plans must have a star rating of four or higher (out of five) to qualify for bonus payments. CMS released the Company’s 2023 star ratings in October 2022. The Company’s 2023 star ratings will be used to determine which of the Company’s Medicare Advantage plans have ratings of four stars or higher and qualify for bonus payments in 2024. Based on the Company’s membership at September 1, 2022, 21% of the Company’s Medicare Advantage members were in plans with 2023 star ratings of at least 4.0 stars, compared to 87% of the Company’s Medicare Advantage members being in plans with 2022 star ratings of at least 4.0 stars based on the Company’s membership at September 1, 2021.

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Pharmacy Services Segment

The following table summarizes the Pharmacy Services segment’s performance for the respective periods:

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2022 vs 2021				Nine Months Ended September 30, 2022 vs 2021
In millions, except percentages	2022			2021			2022			2021			$		%		$		%
Revenues:
Products	$	42,905		$	38,739		$	124,623		$	112,816		$	4,166	10.8	%	$	11,807	10.5	%
Services	311			307			866			865			4		1.3	%	1		0.1	%
Total revenues	43,216			39,046			125,489			113,681			4,170		10.7	%	11,808		10.4	%
Cost of products sold	40,998			36,925			119,028			107,714			4,073		11.0	%	11,314		10.5	%
Operating expenses	382			391			1,219			1,080			(9)		(2.3)	%	139		12.9	%
Operating expenses as a % of total revenues	0.9		%	1.0		%	1.0		%	1.0		%
Operating income	$	1,836		$	1,730		$	5,242		$	4,887		$	106	6.1	%	$	355	7.3	%
Operating income as a % of total revenues	4.2		%	4.4		%	4.2		%	4.3		%
Adjusted operating income (1)	$	1,877		$	1,773		$	5,368		$	5,035		$	104	5.9	%	$	333	6.6	%
Adjusted operating income as a % of total revenues	4.3		%	4.5		%	4.3		%	4.4		%
Revenues (by distribution channel):
Pharmacy network (2)	$	25,012		$	23,665		$	72,373		$	68,476		$	1,347	5.7	%	$	3,897	5.7	%
Mail choice (3)	17,935			15,202			52,339			44,685			2,733		18.0	%	7,654		17.1	%
Other	269			179			777			520			90		50.3	%	257		49.4	%
Pharmacy claims processed: (4)
Total	584.9			564.4			1,736.2			1,662.5			20.5		3.6	%	73.7		4.4	%
Pharmacy network (2)	502.3			481.1			1,485.7			1,415.8			21.2		4.4	%	69.9		4.9	%
Mail choice (3)	82.6			83.3			250.5			246.7			(0.7)		(0.8)	%	3.8		1.5	%
Generic dispensing rate: (4)
Total	87.5		%	87.1		%	87.7		%	87.3		%
Pharmacy network (2)	87.8		%	87.4		%	88.1		%	87.6		%
Mail choice (3)	85.4		%	85.5		%	85.5		%	85.6		%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Pharmacy Services segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

(2)Pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.

(3)Mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program.

(4)Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

Commentary - Three Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $4.2 billion, or 10.7%, to $43.2 billion in the three months ended September 30, 2022 compared to the prior year primarily driven by increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset by continued client price improvements.

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Operating expenses

•Operating expenses in the Pharmacy Services segment include selling, general and administrative expenses; depreciation and amortization expense; and expenses related to specialty retail pharmacies, which include administrative payroll, employee benefits and occupancy costs.

•Operating expenses as a percentage of total revenues remained relatively consistent at 0.9% and 1.0% in the three-month periods ended September 30, 2022 and 2021, respectively.

Adjusted operating income

•Adjusted operating income increased $104 million, or 5.9%, in the three months ended September 30, 2022 compared to the prior year. The increase in adjusted operating income was primarily driven by improved purchasing economics, including increased contributions from the products and services of the Company’s group purchasing organization, partially offset by continued client price improvements.

•As you review the Pharmacy Services segment’s performance in this area, you should consider the following important information about the business:

•The Company’s efforts to (i) retain existing clients, (ii) obtain new business and (iii) maintain or improve the rebates, fees and/or discounts the Company receives from manufacturers, wholesalers and retail pharmacies continue to have an impact on adjusted operating income. In particular, competitive pressures in the PBM industry have caused the Company and other PBMs to continue to share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers. In addition, marketplace dynamics and regulatory changes have limited the Company’s ability to offer plan sponsors pricing that includes retail network “differential” or “spread,” and the Company expects these trends to continue. The “differential” or “spread” is any difference between the drug price charged to plan sponsors, including Medicare Part D plan sponsors, by a PBM and the price paid for the drug by the PBM to the dispensing provider.

Pharmacy claims processed

•Total pharmacy claims processed represents the number of prescription claims processed through our pharmacy benefits manager and dispensed by either our retail network pharmacies or our own mail and specialty pharmacies. Management uses this metric to understand variances between actual claims processed and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of pharmacy claim volume on segment total revenues and operating results.

•The Company’s pharmacy network claims processed on a 30-day equivalent basis increased 4.4% in the three months ended September 30, 2022 compared to the prior year primarily driven by net new business and increased utilization, partially offset by a decrease in COVID-19 vaccinations.

•The Company’s mail choice claims processed on a 30-day equivalent basis remained relatively consistent in the three months ended September 30, 2022 compared to the prior year reflecting a decrease in mail utilization, largely offset by net new business.

•Excluding the impact of COVID-19 vaccinations, total pharmacy claims processed increased 4.5% on a 30-day equivalent basis for the three months ended September 30, 2022 compared to the prior year.

Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Pharmacy Services segment’s generic drug prescriptions processed or filled by its total prescriptions processed or filled. Management uses this metric to evaluate the effectiveness of the business at encouraging the use of generic drugs when they are available and clinically appropriate, which aids in decreasing costs for client members and retail customers. This metric provides management and investors with information useful in understanding trends in segment total revenues and operating results.

•The Pharmacy Services segment’s total generic dispensing rate increased to 87.5% in the three months ended September 30, 2022 compared to 87.1% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in brand prescriptions, largely attributable to decreased COVID-19 vaccinations in the three months ended September 30, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 88.1% and 88.4% in the three months ended September 30, 2022 and 2021, respectively.

Commentary - Nine Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $11.8 billion, or 10.4%, to $125.5 billion in the nine months ended September 30, 2022 compared to the prior year primarily driven by increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset by continued client price improvements.

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Operating expenses

•Operating expenses increased $139 million, or 12.9%, in the nine months ended September 30, 2022 compared to the prior year primarily driven by restructuring and business integration costs in the nine months ended September 30, 2022 compared to the prior year.

•Operating expenses as a percentage of total revenues remained consistent at 1.0% in each of the nine-month periods ended September 30, 2022 and 2021.

Adjusted operating income

•Adjusted operating income increased $333 million, or 6.6%, in the nine months ended September 30, 2022 compared to the prior year. The increase in adjusted operating income was primarily driven by improved purchasing economics, including increased contributions from the products and services of the Company’s group purchasing organization. These increases were partially offset by continued client price improvements, decreased contributions from pharmacy and/or other administrative services for Covered Entities and restructuring and business integration costs in the nine months ended September 30, 2022 compared to the prior year.

Pharmacy claims processed

•The Company’s pharmacy network claims processed on a 30-day equivalent basis increased 4.9% in the nine months ended September 30, 2022 compared to the prior year primarily driven by net new business, increased utilization and the impact of a weaker cough, cold and flu season experienced in the prior year, partially offset by a decrease in COVID-19 vaccinations.

•The Company’s mail choice claims processed on a 30-day equivalent basis increased 1.5% in the nine months ended September 30, 2022 compared to the prior year primarily driven by net new business and the increased utilization of Maintenance Choice prescriptions.

•Excluding the impact of COVID-19 vaccinations, total pharmacy claims processed increased 5.2% on a 30-day equivalent basis for the nine months ended September 30, 2022 compared to the prior year.

Generic dispensing rate

•The Pharmacy Services segment’s total generic dispensing rate increased to 87.7% in the nine months ended September 30, 2022 compared to 87.3% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in brand prescriptions, largely attributable to decreased COVID-19 vaccinations in the nine months ended September 30, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 88.6% and 88.8% in the nine months ended September 30, 2022 and 2021, respectively.

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Retail/LTC Segment

The following table summarizes the Retail/LTC segment’s performance for the respective periods:

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2022 vs 2021				Nine Months Ended September 30, 2022 vs 2021
In millions, except percentages	2022			2021			2022			2021			$		%		$		%
Revenues:
Products	$	26,115		$	23,971		$	76,248		$	69,974		$	2,144	8.9	%	$	6,274	9.0	%
Services	601			1,054			2,206			3,007			(453)		(43.0)	%	(801)		(26.6)	%
Net investment income (loss)	(10)			(33)			(44)			13			23		69.7	%	(57)		(438.5)	%
Total revenues	26,706			24,992			78,410			72,994			1,714		6.9	%	5,416		7.4	%
Cost of products sold	20,272			18,381			58,591			53,375			1,891		10.3	%	5,216		9.8	%
Loss on assets held for sale	2,480			—			2,480			—			2,480		100.0	%	2,480		100.0	%
Goodwill impairment	—			431			—			431			(431)		(100.0)	%	(431)		(100.0)	%
Operating expenses	5,159			5,015			15,321			14,839			144		2.9	%	482		3.2	%
Operating expenses as a % of total revenues	19.3		%	20.1		%	19.5		%	20.3		%
Operating income (loss)	$	(1,205)		$	1,165		$	2,018		$	4,349		$	(2,370)	(203.4)	%	$	(2,331)	(53.6)	%
Operating income (loss) as a % of total revenues	(4.5)		%	4.7		%	2.6		%	6.0		%
Adjusted operating income (1)	$	1,398		$	1,723		$	4,865		$	5,166		$	(325)	(18.9)	%	$	(301)	(5.8)	%
Adjusted operating income as a % of total revenues	5.2		%	6.9		%	6.2		%	7.1		%
Revenues (by major goods/service lines):
Pharmacy	$	20,759		$	19,023		$	60,308		$	55,781		$	1,736	9.1	%	$	4,527	8.1	%
Front Store	5,581			5,359			16,630			15,255			222		4.1	%	1,375		9.0	%
Other	376			643			1,516			1,945			(267)		(41.5)	%	(429)		(22.1)	%
Net investment income (loss)	(10)			(33)			(44)			13			23		69.7	%	(57)		(438.5)	%
Prescriptions filled (2)	405.3			398.0			1,200.7			1,167.8			7.3		1.8	%	32.9		2.8	%
Same store sales increase: (3)
Total	9.9		%	9.6		%	9.5		%	7.3		%
Pharmacy	11.3		%	8.8		%	9.7		%	8.4		%
Front Store	5.1		%	12.3		%	9.0		%	3.7		%
Prescription volume (2)	3.8		%	9.0		%	4.3		%	8.1		%
Generic dispensing rate (2)	88.0		%	86.6		%	88.0		%	86.6		%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Retail/LTC segment operating income (loss) (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

(2)Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

(3)Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues from MinuteClinic, revenues and prescriptions from LTC operations. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.

Commentary - Three Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $1.7 billion, or 6.9%, to $26.7 billion in the three months ended September 30, 2022 compared to the prior year primarily driven by increased prescription and front store volume, including the sale of OTC test kits, as well

55

as pharmacy drug mix and brand inflation. These increases were partially offset by decreased COVID-19 diagnostic testing and vaccinations, the impact of recent generic introductions and continued pharmacy reimbursement pressure.

•Pharmacy same store sales increased 11.3% in the three months ended September 30, 2022 compared to the prior year. The increase was primarily driven by the 3.8% increase in pharmacy same store prescription volume on a 30-day equivalent basis, pharmacy drug mix and brand inflation. These increases were partially offset by the impact of recent generic introductions and continued pharmacy reimbursement pressure.

•Front store same store sales increased 5.1% in the three months ended September 30, 2022 compared to the prior year. The increase was due to broad category strength primarily in consumer health, including the sale of COVID-19 OTC test kits, compared to the prior year in the three months ended September 30, 2022.

•Other revenues decreased $267 million in the three months ended September 30, 2022 compared to the prior year. The decrease was primarily due to decreased COVID-19 diagnostic testing in the three months ended September 30, 2022 compared to the prior year.

Loss on assets held for sale

•During the three months ended September 30, 2022, the Company recorded $2.5 billion of a loss on assets held for sale to write-down its LTC business. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ to the unaudited condensed consolidated financial statements for additional information.

Goodwill impairment

•During the three months ended September 30, 2021, the Company recorded a $431 million goodwill impairment charge related to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

Operating expenses

•Operating expenses in the Retail/LTC segment include store payroll, store employee benefits, store occupancy costs, selling expenses, advertising expenses, depreciation and amortization expense and certain administrative expenses.

•Operating expenses increased $144 million, or 2.9%, in the three months ended September 30, 2022 compared to the prior year. The increase was primarily due to incremental costs associated with increased volume and increased investments in the segment’s operations and capabilities, partially offset by lower expenses associated with COVID-19 vaccination administration compared to the prior year.

•Operating expenses as a percentage of total revenues decreased to 19.3% in the three months ended September 30, 2022 compared to 20.1% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income decreased $325 million, or 18.9% in the three months ended September 30, 2022 compared to the prior year. The decrease in adjusted operating income was primarily driven by decreased COVID-19 diagnostic testing and vaccinations, continued pharmacy reimbursement pressure, as well as increased investments in the segment’s operations and capabilities. These decreases were partially offset by the increased prescription and front store volume described above, improved generic drug purchasing and the favorable impact of business initiatives in the three months ended September 30, 2022.

•As you review the Retail/LTC segment’s performance in this area, you should consider the following important information about the business:

•The segment’s adjusted operating income has been adversely affected by the efforts of managed care organizations, PBMs and governmental and other third-party payors to reduce their prescription drug costs, including the use of restrictive networks, as well as changes in the mix of business within the pharmacy portion of the Retail/LTC segment. If the pharmacy reimbursement pressure accelerates, the segment may not be able grow revenues, and its adjusted operating income could be adversely affected.

•The increased use of generic drugs has positively impacted the segment’s adjusted operating income but has resulted in third-party payors augmenting their efforts to reduce reimbursement payments to retail pharmacies for prescriptions. This trend, which the Company expects to continue, reduces the benefit the segment realizes from brand to generic drug conversions.

Prescriptions filled

•Prescriptions filled represents the number of prescriptions dispensed through the Retail/LTC segment’s pharmacies. Management uses this metric to understand variances between actual prescriptions dispensed and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of prescription volume on segment total revenues and operating results.

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•Prescriptions filled increased 1.8% on a 30-day equivalent basis in the three months ended September 30, 2022 compared to the prior year primarily driven by increased utilization, partially offset by a decrease in COVID-19 vaccinations. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 3.6% on a 30-day equivalent basis for the three months ended September 30, 2022 compared to the prior year.

Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Retail/LTC segment’s generic drug prescriptions filled by its total prescriptions filled. Management uses this metric to evaluate the effectiveness of the business at encouraging the use of generic drugs when they are available and clinically appropriate, which aids in decreasing costs for client members and retail customers. This metric provides management and investors with information useful in understanding trends in segment total revenues and operating results.

•The Retail/LTC segment’s generic dispensing rate increased to 88.0% in the three months ended September 30, 2022 compared to 86.6% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in brand prescriptions, largely attributable to decreased COVID-19 vaccinations in the three months ended September 30, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 88.9% and 89.1% in the three months ended September 30, 2022 and 2021, respectively.

Commentary - Nine Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues increased $5.4 billion, or 7.4%, to $78.4 billion in the nine months ended September 30, 2022 compared to the prior year primarily driven by increased prescription and front store volume, including the sale of COVID-19 OTC test kits and the impact of a weaker cough, cold and flu season experienced in the prior year, as well as pharmacy drug mix and brand inflation. These increases were partially offset by decreased COVID-19 vaccinations and diagnostic testing, the impact of recent generic introductions and continued pharmacy reimbursement pressure.

•Pharmacy same store sales increased 9.7% in the nine months ended September 30, 2022 compared to the prior year. The increase was primarily driven by the 4.3% increase in pharmacy same store prescription volume on a 30-day equivalent basis, including the impact of a weaker cough, cold and flu season experienced in the prior year, pharmacy drug mix and brand inflation. These increases were partially offset by the impact of recent generic introductions and continued pharmacy reimbursement pressure.

•Front store same store sales increased 9.0% in the nine months ended September 30, 2022 compared to the prior year. The increase was primarily due to strength in consumer health, including the sale of COVID-19 OTC test kits and the impact of a weaker cough, cold and flu season experienced in the prior year, in the nine months ended September 30, 2022.

•Other revenues decreased $429 million in the nine months ended September 30, 2022 compared to the prior year. The decrease was primarily due to decreased COVID-19 diagnostic testing in the nine months ended September 30, 2022 compared to the prior year.

Loss on assets held for sale

•During the nine months ended September 30, 2022, the Company recorded $2.5 billion of a loss on assets held for sale to write-down its LTC business.

Goodwill impairment

•During the nine months ended September 30, 2021, the Company recorded a $431 million goodwill impairment charge related to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

Operating expenses

•Operating expenses increased $482 million, or 3.2%, in the nine months ended September 30, 2022 compared to the prior year. The increase was primarily due to incremental costs associated with increased volume, as well as increased investments in the segment’s operations and capabilities, partially offset by lower expenses associated with COVID-19 vaccination administration compared to the prior year.

•Operating expenses as a percentage of total revenues decreased to 19.5% in the nine months ended September 30, 2022 compared to 20.3% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income decreased $301 million, or 5.8% in the nine months ended September 30, 2022 compared to the prior year. The decrease in adjusted operating income was primarily driven by continued pharmacy reimbursement pressure, decreased COVID-19 diagnostic testing and vaccinations, as well as increased investments in the segment’s operations and capabilities. These decreases were partially offset by the increased prescription and front store volume

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described above, improved generic drug purchasing and the favorable impact of business initiatives in the nine months ended September 30, 2022.

Prescriptions filled

•Prescriptions filled increased 2.8% on a 30-day equivalent basis in the nine months ended September 30, 2022 compared to the prior year primarily driven by increased utilization and the impact of a weaker cough, cold and flu season experienced in the prior year, partially offset by a decrease in COVID-19 vaccinations. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 4.5% on a 30-day equivalent basis for the nine months ended September 30, 2022 compared to the prior year.

Generic dispensing rate

•The Retail/LTC segment’s generic dispensing rate increased to 88.0% in the nine months ended September 30, 2022 compared to 86.6% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in brand prescriptions, largely attributable to decreased COVID-19 vaccinations in the nine months ended September 30, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 89.5% and 89.4% in the nine months ended September 30, 2022 and 2021, respectively.

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Corporate/Other Segment

The following table summarizes the Corporate/Other segment’s performance for the respective periods:

									Change
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30, 2022 vs 2021				Nine Months Ended September 30, 2022 vs 2021
In millions, except percentages	2022		2021		2022		2021		$		%		$		%
Revenues:
Premiums	$	14	$	25	$	46	$	58	$	(11)	(44.0)	%	$	(12)	(20.7)	%
Services	18		14		51		43		4		28.6	%	8		18.6	%
Net investment income	110		132		281		387		(22)		(16.7)	%	(106)		(27.4)	%
Total revenues	142		171		378		488		(29)		(17.0)	%	(110)		(22.5)	%
Cost of products sold	11		11		31		27		—		—	%	4		14.8	%
Benefit costs	53		69		274		168		(16)		(23.2)	%	106		63.1	%
Opioid litigation charges	5,220		—		5,704		—		5,220		100.0	%	5,704		100.0	%
Operating expenses	495		455		1,352		1,411		40		8.8	%	(59)		(4.2)	%
Operating loss	(5,637)		(364)		(6,983)		(1,118)		(5,273)		(1,448.6)	%	(5,865)		(524.6)	%
Adjusted operating loss (1)	(417)		(343)		(1,277)		(1,015)		(74)		(21.6)	%	(262)		(25.8)	%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Corporate/Other segment operating loss (GAAP measure) to adjusted operating loss, which represents the Company’s principal measure of segment performance.

Commentary - Three Months Ended September 30, 2022 vs. 2021

Revenues

•Revenues primarily relate to products for which the Company no longer solicits or accepts new customers, such as large case pensions and long-term care insurance products.

•Total revenues decreased $29 million, or 17.0%, to $142 million in the three months ended September 30, 2022 compared to the prior year primarily driven by lower net investment income from private equity investments, partially offset by higher average invested assets and favorable average investment yields compared to the prior year, and lower net realized capital gains in the three months ended September 30, 2022 compared to the prior year.

Opioid litigation charges

•During the three months ended September 30, 2022, the Company recorded $5.2 billion of opioid litigation charges. See Note 10 ‘‘Commitments and Contingencies’’ to the unaudited condensed consolidated financial statements for additional information.

Adjusted operating loss

•Adjusted operating loss increased $74 million in the three months ended September 30, 2022 compared to the prior year primarily driven by the decreases in net investment income described above.

Commentary - Nine Months Ended September 30, 2022 vs. 2021

Revenues

•Total revenues decreased $110 million, or 22.5%, to $378 million in the nine months ended September 30, 2022 compared to the prior year primarily driven by lower net investment income from private equity investments, partially offset by higher average invested assets and favorable average investment yields compared to the prior year, and lower net realized capital gains in the nine months ended September 30, 2022 compared to the prior year.

Opioid litigation charges

•During the nine months ended September 30, 2022, the Company recorded $5.7 billion of opioid litigation charges.

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Adjusted operating loss

•Adjusted operating loss increased $262 million in the nine months ended September 30, 2022 compared to the prior year primarily driven by the decreases in net investment income described above and the strengthening of reserves in the Company’s long-term care insurance business.

Liquidity and Capital Resources

Cash Flows

The Company maintains a level of liquidity sufficient to allow it to meet its cash needs in the short-term. Over the long term, the Company manages its cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. The Company continuously assesses its regulatory capital requirements, working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions. The Company believes its operating cash flows, commercial paper program, credit facilities, as well as any potential future borrowings, will be sufficient to fund these future payments and long-term initiatives. As of September 30, 2022, the Company had approximately $17.2 billion in cash and cash equivalents, approximately $7.9 billion of which was held by the parent company or nonrestricted subsidiaries.

The net change in cash, cash equivalents and restricted cash during the nine months ended September 30, 2022 and 2021 was as follows:

	Nine Months Ended September 30,				Change
In millions, except percentages	2022		2021		$		%
Net cash provided by operating activities	$	18,129	$	14,260	$	3,869	27.1	%
Net cash used in investing activities	(4,928)		(3,821)		(1,107)		(29.0)	%
Net cash used in financing activities	(8,329)		(8,442)		113		1.3	%
Net increase in cash, cash equivalents and restricted cash	$	4,872	$	1,997	$	2,875	144.0	%

Commentary

•Net cash provided by operating activities increased by $3.9 billion in the nine months ended September 30, 2022 compared to the prior year. The increase was primarily due to the timing of payments, including the early receipt of the October CMS payment of $3.2 billion, partially offset by higher inventory purchases during the nine months ended September 30, 2022 compared to the prior year.

•Net cash used in investing activities increased by $1.1 billion in the nine months ended September 30, 2022 compared to the prior year primarily due to a reduction in restricted cash as a result of the sale of health savings account funds held on behalf of customers in conjunction with the sale of PayFlex, partially offset by lower net purchases of investments and the gross proceeds from the sale of PayFlex.

•Net cash used in financing activities decreased to $8.3 billion in the nine months ended September 30, 2022 compared to $8.4 billion in the prior year. The decrease in cash used in financing activities primarily related to lower net repayments of long-term debt during the nine months ended September 30, 2022 compared to the prior year, largely offset by share repurchases in the nine months ended September 30, 2022.

Short-term Borrowings

Commercial Paper and Back-up Credit Facilities

The Company did not have any commercial paper outstanding as of September 30, 2022. In connection with its commercial paper program, the Company maintains a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2025, a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 11, 2026, and a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2027. The credit facilities allow for borrowings at various rates that are dependent, in part, on the Company’s public debt ratings and require the Company to pay a weighted average quarterly facility fee of approximately 0.03%, regardless of usage. As of September 30, 2022, there were no borrowings outstanding under any of the Company’s back-up credit facilities.

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Federal Home Loan Bank of Boston

A subsidiary of the Company is a member of the Federal Home Loan Bank of Boston (the “FHLBB”). As a member, the subsidiary has the ability to obtain cash advances, subject to certain minimum collateral requirements. The maximum borrowing capacity available from the FHLBB as of September 30, 2022 was approximately $925 million. As of September 30, 2022, there were no outstanding advances from the FHLBB.

Long-term Borrowings

In May 2022, the Company exercised the par call option on its outstanding 3.5% senior notes due July 2022 and redeemed for cash on hand the entire $1.5 billion aggregate principal amount.

In August 2022, the Company exercised the par call option on its outstanding 2.75% senior notes due November 2022 (issued by Aetna Inc.) and redeemed for cash on hand the entire $1.0 billion aggregate principal amount.

In September 2022, the Company exercised the par call options on its outstanding 2.75% senior notes due December 2022 and 4.75% senior notes due December 2022 (including notes issued by Omnicare, Inc.) and redeemed for cash on hand the entire $1.25 billion and $399 million aggregate principal amounts, respectively.

Debt Covenants

The Company’s back-up revolving credit facilities and unsecured senior notes contain customary restrictive financial and operating covenants. These covenants do not include an acceleration of the Company’s debt maturities in the event of a downgrade in the Company’s credit ratings. The Company does not believe the restrictions contained in these covenants materially affect its financial or operating flexibility. As of September 30, 2022, the Company was in compliance with all of its debt covenants.

Debt Ratings 

As of September 30, 2022, the Company’s long-term debt was rated “Baa2” by Moody’s Investor Service, Inc. (“Moody’s”) and “BBB” by Standard & Poor’s Financial Services LLC (“S&P”), and its commercial paper program was rated “P-2” by Moody’s and “A-2” by S&P. The outlook on the Company’s long-term debt is “Stable” by Moody’s and “Positive” by S&P. In assessing the Company’s credit strength, the Company believes that both Moody’s and S&P considered, among other things, the Company’s capital structure and financial policies as well as its consolidated balance sheet, its historical acquisition activity and other financial information. Although the Company currently believes its long-term debt ratings will remain investment grade, it cannot guarantee the future actions of Moody’s and/or S&P. The Company’s debt ratings have a direct impact on its future borrowing costs, access to capital markets and new store operating lease costs.

Share Repurchase Program

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of September 30, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 Repurchase Program permits the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase (“ASR”) transactions, and/or other derivative transactions. The 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the nine months ended September 30, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January

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2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Critical Accounting Policies

The Company prepares the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles, which require management to make certain estimates and apply judgment. Estimates and judgments are based on historical experience, current trends and other factors that management believes to be important at the time the unaudited condensed consolidated financial statements are prepared. On a regular basis, the Company reviews its accounting policies and how they are applied and disclosed in the unaudited condensed consolidated financial statements. While the Company believes the historical experience, current trends and other factors considered by management support the preparation of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles, actual results could differ from estimates, and such differences could be material.

Recoverability of Goodwill

During the third quarter of 2022, the Company performed its required annual impairment test of goodwill. The results of the impairment tests indicated that there was no impairment of goodwill as of the testing date. The fair values of the reporting units with goodwill exceeded their carrying values by significant margins.

The fair value of the reporting units is estimated using a combination of a discounted cash flow method and a market multiple method. The determination of the fair value of the reporting units requires the Company to make significant assumptions and estimates. These assumptions and estimates primarily include the selection of appropriate peer group companies; control premiums and valuation multiples appropriate for acquisitions in the industries in which the Company competes; discount rates; terminal growth rates; and forecasts of revenue, operating income, depreciation and amortization, income taxes, capital expenditures and future working capital requirements. When determining these assumptions and preparing these estimates, the Company considers each reporting unit’s historical results and current operating trends; consolidated revenues, profitability and cash flow results and forecasts; and industry trends. The Company’s estimates can be affected by a number of factors, including general economic and regulatory conditions; the risk-free interest rate environment; the Company’s market capitalization; efforts of customers and payers to reduce costs, including their prescription drug costs, and/or increase member co-payments; the continued efforts of competitors to gain market share, consumer spending patterns and the Company’s ability to achieve its revenue growth projections and execute on its cost reduction initiatives.

The Company had experienced declines in its Commercial Insured medical membership subsequent to the closing date of the Aetna Acquisition in November 2018. In 2022, the Company has grown its Commercial Insured medical membership, excluding the impact of the divestiture of the Thailand business described in Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ to the unaudited condensed consolidated financial statements. Adverse economic conditions may impact medical membership in the Commercial business due to reductions in workforce at existing customers. The Company’s fair value estimate is sensitive to significant assumptions including changes in medical membership, revenue growth rate, operating income and the discount rate. The Company believes the financial projections used to determine the fair value of the Commercial Business reporting unit in the third quarter of 2022 were reasonable and achievable. As of September 30, 2022, the goodwill balance in the Commercial Business reporting unit was $25.9 billion.

For a full description of the Company’s other critical accounting policies, see “Critical Accounting Policies” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2021 Form 10-K.

Cautionary Statement Concerning Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Reform Act”) provides a “safe harbor” for forward-looking statements, so long as (1) those statements are identified as forward-looking and (2) the statements are accompanied by meaningful cautionary statements that identify important factors that could cause actual results to differ materially from those discussed in the statement. We want to take advantage of these safe harbor provisions.

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Certain information contained in this Quarterly Report on Form 10-Q (this “report”) is forward-looking within the meaning of the Reform Act or SEC rules. This information includes, but is not limited to the forward-looking information in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part I, Item 2 of this report. In addition, throughout this report and our other reports and communications, we use the following words or variations or negatives of these words and similar expressions when we intend to identify forward-looking statements:

·	Anticipates	·	Believes	·	Can	·	Continue	·	Could
·	Estimates	·	Evaluate	·	Expects	·	Explore	·	Forecast
·	Guidance	·	Intends	·	Likely	·	May	·	Might
·	Outlook	·	Plans	·	Potential	·	Predict	·	Probable
·	Projects	·	Seeks	·	Should	·	View	·	Will

All statements addressing the future operating performance of CVS Health or any segment or any subsidiary and/or future events or developments, including statements relating to the projected impact of COVID-19 and its emerging new variants on the Company’s businesses, investment portfolio, operating results, cash flows and/or financial condition, statements relating to corporate strategy, statements relating to future revenue, operating income or adjusted operating income, earnings per share or adjusted earnings per share, Health Care Benefits segment business, sales results and/or trends, medical cost trends, medical membership, Medicare Part D membership, medical benefit ratios and/or operations, Pharmacy Services segment business, sales results and/or trends and/or operations, Retail/LTC segment business, sales results and/or trends and/or operations, incremental investment spending, interest expense, effective tax rate, weighted-average share count, cash flow from operations, net capital expenditures, cash available for debt repayment, integration synergies, net synergies, integration costs, enterprise modernization, transformation, leverage ratio, cash available for enhancing shareholder value, inventory reduction, turn rate and/or loss rate, debt ratings, the Company’s ability to attract or retain customers and clients, store development and/or relocations, new product development, and the impact of industry and regulatory developments as well as statements expressing optimism or pessimism about future operating results or events, are forward-looking statements within the meaning of the Reform Act.

Forward-looking statements rely on a number of estimates, assumptions and projections concerning future events, and are subject to a number of significant risks and uncertainties and other factors that could cause actual results to differ materially from those statements. Many of these risks and uncertainties and other factors are outside our control.

Certain risks and uncertainties related to CVS Health’s proposed acquisition of Signify Health include, but are not limited to, the occurrence of any event, change or other circumstance that could give rise to the right of CVS Health or Signify Health or both of them to terminate the merger agreement, including circumstances requiring a party to pay the other party a termination fee pursuant to the merger agreement; failure to obtain applicable regulatory approval in a timely manner or otherwise; the risk that the acquisition may not close in the anticipated timeframe or at all due to one or more of the other closing conditions to the transaction not being satisfied or waived; risks related to the ability of CVS Health to successfully integrate the businesses and achieve the expected synergies and operating efficiencies within the expected timeframes or at all and the possibility that such integration may be more difficult, time consuming or costly than expected; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of CVS Health’s common stock, credit ratings or operating results; the risk that the proposed transaction and its announcement could have an adverse effect on the ability of CVS Health to retain customers and maintain relationships with each of its business partners, suppliers and customers and on its operating results and businesses generally; the risk of litigation and/or regulatory actions related to the proposed acquisition; and other business effects, including the effects of industry, market, economic, political or regulatory conditions.

Certain additional risks and uncertainties and other factors are described under “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and under “Risk Factors” included in Part II, Item 1A of this report; these are not the only risks and uncertainties we face. There can be no assurance that the Company has identified all the risks that affect it. Additional risks and uncertainties not presently known to the Company or that the Company currently believes to be immaterial also may adversely affect the Company’s businesses. If any of those risks or uncertainties develops into actual events, those events or circumstances could have a material adverse effect on the Company’s businesses, operating results, cash flows, financial condition and/or stock price, among other effects.

You should not put undue reliance on forward-looking statements. Any forward-looking statement speaks only as of the date of this report, and we disclaim any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

The Company has not experienced any material changes in exposures to market risk since December 31, 2021. See the information contained in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for a discussion of the Company’s exposures to market risk.

Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures: The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a‑15(f) and 15d‑15(f)) as of September 30, 2022, have concluded that as of such date the Company’s disclosure controls and procedures were adequate and effective and designed to provide reasonable assurance that material information relating to the Company and its subsidiaries would be made known to such officers on a timely basis.

Changes in internal control over financial reporting: There has been no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that occurred in the three months ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II.Other Information

Item 1.Legal Proceedings

The information contained in Note 10 ‘‘Commitments and Contingencies’’ contained in “Notes to Condensed Consolidated Financial Statements (Unaudited)” in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated by reference herein.

Item 1A.Risk Factors

There have been no material changes to the “Risk Factors” disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Those risk factors could adversely affect the Company’s businesses, operating results, cash flows and/or financial condition as well as the market price of CVS Health Corporation’s common shares.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c) Stock Repurchases

The following table presents the total number of shares purchased in the three months ended September 30, 2022, the average price paid per share and the approximate dollar value of shares that still could have been purchased at the end of the applicable fiscal period, pursuant to the share repurchase program authorized by CVS Health Corporation’s Board of Directors on December 9, 2021. See Note 7 ‘‘Shareholders’ Equity’’ contained in “Notes to Condensed Consolidated Financial Statements (Unaudited)” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Fiscal Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2022 through July 31, 2022	—	$	—	—	$	8,000,000,137
August 1, 2022 through August 31, 2022	—	$	—	—	$	8,000,000,137
September 1, 2022 through September 30, 2022	—	$	—	—	$	8,000,000,137
	—			—

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Item 3.        Defaults Upon Senior Securities

None.

Item 4.        Mine Safety Disclosures

Not Applicable.

Item 5.        Other Information

None.

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Item 6. Exhibits

The exhibits listed in this Item 6 are filed as part of this Quarterly Report on Form 10-Q. Exhibits marked with an asterisk (*) are management contracts or compensatory plans or arrangements. Exhibits other than those listed are omitted because they are not required to be listed or are not applicable. Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Registrant hereby agrees to furnish to the Securities and Exchange Commission a copy of any omitted instrument that is not required to be listed.

INDEX TO EXHIBITS

2	Plan of acquisition, reorganization, arrangement, liquidation or succession
2.1	Agreement and Plan of Merger, dated as of September 2, 2022, by and among CVS Pharmacy, Inc., Noah Merger Sub, Inc. and Signify Health, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed September 6, 2022).
10	Material Contracts
10.1	Voting Agreement, dated as of September 2, 2022, by and among CVS Pharmacy, Inc. and certain stockholders of Signify Health, Inc. party thereto (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed September 6, 2022).
15	Letter re: unaudited interim financial information
15.1	Letter from Ernst & Young LLP acknowledging awareness of the use of a report dated November 2, 2022 related to their reviews of interim financial information.
31	Rule 13a-14(a)/15d-14(a) Certifications
31.1	Certification by the Chief Executive Officer.
31.2	Certification by the Chief Financial Officer.
32	Section 1350 Certifications
32.1	Certification by the Chief Executive Officer.
32.2	Certification by the Chief Financial Officer.
101
101	The following materials from the CVS Health Corporation Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022 formatted in Inline XBRL: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders’ Equity and (vi) the related Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104
104	Cover Page Interactive Data File - The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, formatted in Inline XBRL (included as Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CVS HEALTH CORPORATION

Date:	November 2, 2022	By:	/s/ Shawn M. Guertin
			Shawn M. Guertin
			Executive Vice President and Chief Financial Officer

EX-15.1

Exhibit 15.1

Letter re: Unaudited Interim Financial Information

November 2, 2022

To the Shareholders and the Board of Directors of CVS Health Corporation

We are aware of the incorporation by reference in the Registration Statements (Form S-3ASR No. 333-238506 and Form S-8 Nos. 333-238507, 333-230035, 333-228622, 333-167746, 333-217853, 333-208805, 333-141481, 333-139470, 333-63664, 333-91253, 333-49407, 333-34927, and 333-28043) of CVS Health Corporation of our report dated November 2, 2022, relating to the unaudited condensed consolidated interim financial statements of CVS Health Corporation that is included in its Form 10-Q for the quarter ended September 30, 2022.

/s/ Ernst & Young LLP

Boston, Massachusetts

EX-31.1

Exhibit 31.1

Certification

I, Karen S. Lynch, President and Chief Executive Officer of CVS Health Corporation, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of CVS Health Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 2, 2022	/S/     KAREN S. LYNCH
		Karen S. Lynch
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Shawn M. Guertin, Executive Vice President and Chief Financial Officer of CVS Health Corporation, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of CVS Health Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 2, 2022	/S/     SHAWN M. GUERTIN
		Shawn M. Guertin
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

The certification set forth below is being submitted in connection with the Quarterly Report of CVS Health Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2022 (the “Report”) solely for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Karen S. Lynch, President and Chief Executive Officer of the Company, certify that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 2, 2022	/S/    KAREN S. LYNCH
		Karen S. Lynch
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

The certification set forth below is being submitted in connection with the Quarterly Report of CVS Health Corporation (the “Company”) on Form 10-Q for the period ended September 30, 2022 (the “Report”) solely for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Shawn M. Guertin, Executive Vice President and Chief Financial Officer of the Company, certify that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	November 2, 2022	/S/    SHAWN M. GUERTIN
		Shawn M. Guertin
		Executive Vice President and Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Oct. 26, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-01011
Entity Registrant Name	CVS HEALTH CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	05-0494040
Entity Address, Address Line One	One CVS Drive,
Entity Address, City or Town	Woonsocket,
Entity Address, State or Province	RI
Entity Address, Postal Zip Code	02895
City Area Code	(401)
Local Phone Number	765-1500
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	CVS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,313,966,912
Entity Central Index Key	0000064803
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Premiums	$ 21,003	$ 18,984	$ 63,894	$ 56,927
Net investment income	201	246	515	832
Total revenues	81,159	73,794	238,621	215,507
Operating costs:
Cost of products sold	50,365	45,011	145,164	129,425
Benefit costs	17,419	16,081	52,976	47,686
Opioid litigation charges	5,220	0	5,704	0
Loss on assets held for sale	2,480	0	2,521	0
Goodwill impairment	0	431	0	431
Operating expenses	9,606	9,210	28,128	27,001
Total operating costs	85,090	70,733	234,493	204,543
Operating income (loss)	(3,931)	3,061	4,128	10,964
Interest expense	566	602	1,735	1,895
Loss on early extinguishment of debt	0	363	0	363
Other income	(41)	(49)	(126)	(144)
Income (loss) before income tax provision	(4,456)	2,145	2,519	8,850
Income tax provision (benefit)	(1,047)	558	654	2,248
Net income (loss)	(3,409)	1,587	1,865	6,602
Net (income) loss attributable to noncontrolling interests	(7)	11	(18)	2
Net income (loss) attributable to CVS Health	$ (3,416)	$ 1,598	$ 1,847	$ 6,604
Net income (loss) per share attributable to CVS Health:
Basic (in dollars per share)	$ (2.60)	$ 1.21	$ 1.41	$ 5.01
Diluted (in dollars per share)	$ (2.60)	$ 1.20	$ 1.40	$ 4.98
Weighted average shares outstanding:
Basic (in shares)	1,315	1,321	1,313	1,318
Diluted (in shares)	1,315	1,329	1,324	1,326
Dividends declared per share (in dollars per share)	$ 0.55	$ 0.50	$ 1.65	$ 1.50
Cost, Product and Service [Extensible List]	Products	Products	Products	Products
Products
Revenues:
Revenues	$ 57,643	$ 51,853	$ 166,959	$ 149,765
Services
Revenues:
Revenues	$ 2,312	$ 2,711	$ 7,253	$ 7,983

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (3,409)	$ 1,587	$ 1,865	$ 6,602
Other comprehensive loss, net of tax:
Net unrealized investment losses	(623)	(73)	(2,591)	(310)
Foreign currency translation adjustments	(7)	(5)	(5)	(6)
Net cash flow hedges	8	(15)	20	(22)
Pension and other postretirement benefits	1	0	2	1
Other comprehensive loss	(621)	(93)	(2,574)	(337)
Comprehensive income (loss)	(4,030)	1,494	(709)	6,265
Comprehensive (income) loss attributable to noncontrolling interests	(7)	11	(18)	2
Comprehensive income (loss) attributable to CVS Health	$ (4,037)	$ 1,505	$ (727)	$ 6,267

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Assets:
Cash and cash equivalents	$ 17,197	$ 9,408
Investments	2,792	3,117
Accounts receivable, net	26,317	24,431
Inventories	18,058	17,760
Assets held for sale	1,498	0
Other current assets	2,479	5,292
Total current assets	68,341	60,008
Long-term investments	20,565	23,025
Property and equipment, net	12,626	12,896
Operating lease right-of-use assets	18,270	19,122
Goodwill	78,086	79,121
Intangible assets, net	25,157	29,026
Separate accounts assets	3,318	5,087
Other assets	4,849	4,714
Total assets	231,212	232,999
Liabilities:
Accounts payable	13,925	12,544
Pharmacy claims and discounts payable	19,161	17,330
Health care costs payable	10,351	8,808
Policyholders’ funds	1,642	4,301
Accrued expenses	19,423	17,670
Other insurance liabilities	4,561	1,303
Current portion of operating lease liabilities	1,687	1,646
Current portion of long-term debt	1,363	4,205
Liabilities held for sale	296	0
Total current liabilities	72,409	67,807
Long-term operating lease liabilities	17,174	18,177
Long-term debt	50,848	51,971
Deferred income taxes	3,508	6,270
Separate accounts liabilities	3,318	5,087
Other long-term insurance liabilities	6,175	6,402
Other long-term liabilities	6,769	1,904
Total liabilities	160,201	157,618
Shareholders’ equity:
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding	0	0
Common stock, par value $0.01: 3,200 shares authorized; 1,757 shares issued and 1,315 shares outstanding at September 30, 2022 and 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and capital surplus	48,047	47,377
Treasury stock, at cost: 442 shares at September 30, 2022 and 422 shares at December 31, 2021	(30,326)	(28,173)
Retained earnings	54,571	54,906
Accumulated other comprehensive income (loss)	(1,609)	965
Total CVS Health shareholders’ equity	70,683	75,075
Noncontrolling interests	328	306
Total shareholders’ equity	71,011	75,381
Total liabilities and shareholders’ equity	$ 231,212	$ 232,999

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000	100,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,200,000,000	3,200,000,000
Common stock, shares issued (in shares)	1,757,000,000	1,744,000,000
Common stock, shares outstanding (in shares)	1,315,000,000	1,322,000,000
Treasury stock (in shares)	442,000,000	422,000,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Cash receipts from customers	$ 235,395	$ 209,104
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(138,785)	(122,129)
Insurance benefits paid	(51,434)	(46,965)
Cash paid to other suppliers and employees	(22,368)	(21,840)
Interest and investment income received	327	582
Interest paid	(1,936)	(2,095)
Income taxes paid	(3,070)	(2,397)
Net cash provided by operating activities	18,129	14,260
Cash flows from investing activities:
Proceeds from sales and maturities of investments	5,535	5,559
Purchases of investments	(6,439)	(7,417)
Purchases of property and equipment	(2,039)	(1,923)
Acquisitions (net of cash acquired)	(131)	(135)
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,808 and $0)	(1,928)	0
Other	74	95
Net cash used in investing activities	(4,928)	(3,821)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	0	987
Repayments of long-term debt	(4,195)	(7,823)
Repurchase of common stock	(2,000)	0
Dividends paid	(2,188)	(1,965)
Proceeds from exercise of stock options	510	440
Payments for taxes related to net share settlement of equity awards	(337)	(161)
Other	(119)	80
Net cash used in financing activities	(8,329)	(8,442)
Net increase in cash, cash equivalents and restricted cash	4,872	1,997
Cash, cash equivalents and restricted cash at the beginning of the period	12,691	11,043
Cash, cash equivalents and restricted cash at the end of the period	17,563	13,040
Reconciliation of net income to net cash provided by operating activities:
Net income (loss)	1,865	6,602
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,198	3,397
Loss on assets held for sale	2,521	0
Goodwill impairment	0	431
Stock-based compensation	341	346
Gain on sale of subsidiary	(225)	0
Loss on early extinguishment of debt	0	363
Deferred income taxes and other noncash items	(2,250)	(645)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(2,009)	(3,504)
Inventories	(415)	1,097
Other assets	(311)	(88)
Accounts payable and pharmacy claims and discounts payable	3,350	3,973
Health care costs payable and other insurance liabilities	4,687	348
Other liabilities	7,377	1,940
Net cash provided by operating activities	$ 18,129	$ 14,260

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions		Total	Total CVS Health Shareholders’ Equity	Common Shares	Treasury Stock		Common Stock and Capital Surplus		Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020				1,733
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020	[1]				(423)
Balance at beginning of period at Dec. 31, 2020		$ 69,701	$ 69,389		$ (28,178)	[1]	$ 46,513	[2]	$ 49,640	$ 1,414	$ 312
Shareholders' Equity [Roll Forward]
Net income (loss)		2,224	2,223						2,223		1
Other comprehensive income (loss)		(392)	(392)							(392)
Stock option activity, stock awards and other (in shares)				2
Stock option activity, stock awards and other		214	214				214	[2]
ESPP issuances, net of purchase of treasury shares (in shares)	[1]				1
ESPP issuances, net of purchase of treasury shares		76	76		$ 76	[1]
Common stock dividends		(660)	(660)						(660)
Other increases (decreases) in noncontrolling interests		1									1
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2021				1,735
Treasury shares outstanding, balance at end of period (in shares) at Mar. 31, 2021	[1]				(422)
Balance at end of period at Mar. 31, 2021		71,164	70,850		$ (28,102)	[1]	46,727	[2]	51,203	1,022	314
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020				1,733
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020	[1]				(423)
Balance at beginning of period at Dec. 31, 2020		69,701	69,389		$ (28,178)	[1]	46,513	[2]	49,640	1,414	312
Shareholders' Equity [Roll Forward]
Net income (loss)		6,602
Other comprehensive income (loss)		(337)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2021				1,743
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2021					(422)
Balance at end of period at Sep. 30, 2021		74,618	74,308		$ (28,166)		47,133		54,264	1,077	310
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2021				1,735
Treasury shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2021	[1]				(422)
Balance at beginning of period at Mar. 31, 2021		71,164	70,850		$ (28,102)	[1]	46,727	[2]	51,203	1,022	314
Shareholders' Equity [Roll Forward]
Net income (loss)		2,791	2,783						2,783		8
Other comprehensive income (loss)		148	148							148
Stock option activity, stock awards and other (in shares)				7
Stock option activity, stock awards and other		268	268				268	[2]
Purchases of treasury shares, net of ESPP issuances (in shares)	[1]				(2)
Purchase of treasury shares, net of ESPP issuances		(150)	(150)		$ (150)	[1]
Common stock dividends		(655)	(655)						(655)
Other increases (decreases) in noncontrolling interests		(1)									(1)
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2021				1,742
Treasury shares outstanding, balance at end of period (in shares) at Jun. 30, 2021	[1]				(424)
Balance at end of period at Jun. 30, 2021		73,565	73,244		$ (28,252)	[1]	46,995	[2]	53,331	1,170	321
Shareholders' Equity [Roll Forward]
Net income (loss)		1,587	1,598						1,598		(11)
Other comprehensive income (loss)		(93)	(93)							(93)
Stock option activity, stock awards and other (in shares)				1
Stock option activity, stock awards and other		138	138				138	[2]
ESPP issuances, net of purchase of treasury shares (in shares)	[1]				2
ESPP issuances, net of purchase of treasury shares		86	86		$ 86	[1]
Common stock dividends		(665)	(665)						(665)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2021				1,743
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2021					(422)
Balance at end of period at Sep. 30, 2021		74,618	74,308		$ (28,166)		47,133		54,264	1,077	310
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021				1,744
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021	[3]				(422)
Balance at beginning of period at Dec. 31, 2021		75,381	75,075		$ (28,173)	[3]	47,377	[4]	54,906	965	306
Shareholders' Equity [Roll Forward]
Net income (loss)		2,313	2,312						2,312		1
Other comprehensive income (loss)		(1,155)	(1,155)							(1,155)
Stock option activity, stock awards and other (in shares)				3
Stock option activity, stock awards and other		300	300				300	[4]
Purchases of treasury shares, net of ESPP issuances (in shares)	[3]				(19)
Purchase of treasury shares, net of ESPP issuances		(1,972)	(1,972)		$ (1,972)	[3]
Common stock dividends		(730)	(730)						(730)
Other increases (decreases) in noncontrolling interests		3									3
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2022				1,747
Treasury shares outstanding, balance at end of period (in shares) at Mar. 31, 2022	[3]				(441)
Balance at end of period at Mar. 31, 2022		74,140	73,830		$ (30,145)	[3]	47,677	[4]	56,488	(190)	310
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021				1,744
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021	[3]				(422)
Balance at beginning of period at Dec. 31, 2021		75,381	75,075		$ (28,173)	[3]	47,377	[4]	54,906	965	306
Shareholders' Equity [Roll Forward]
Net income (loss)		1,865
Other comprehensive income (loss)		(2,574)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2022				1,757
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2022	[3]				(442)
Balance at end of period at Sep. 30, 2022		71,011	70,683		$ (30,326)	[3]	48,047	[4]	54,571	(1,609)	328
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2022				1,747
Treasury shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2022	[3]				(441)
Balance at beginning of period at Mar. 31, 2022		74,140	73,830		$ (30,145)	[3]	47,677	[4]	56,488	(190)	310
Shareholders' Equity [Roll Forward]
Net income (loss)		2,961	2,951						2,951		10
Other comprehensive income (loss)		(798)	(798)							(798)
Stock option activity, stock awards and other (in shares)				8
Stock option activity, stock awards and other		197	197				197	[4]
Purchases of treasury shares, net of ESPP issuances (in shares)	[3]				(2)
Purchase of treasury shares, net of ESPP issuances		(267)	(267)		$ (267)	[3]
Common stock dividends		(729)	(729)						(729)
Other increases (decreases) in noncontrolling interests		2									2
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2022				1,755
Treasury shares outstanding, balance at end of period (in shares) at Jun. 30, 2022	[3]				(443)
Balance at end of period at Jun. 30, 2022		75,506	75,184		$ (30,412)	[3]	47,874	[4]	58,710	(988)	322
Shareholders' Equity [Roll Forward]
Net income (loss)		(3,409)	(3,416)						(3,416)		7
Other comprehensive income (loss)		(621)	(621)
Stock option activity, stock awards and other (in shares)				2
Stock option activity, stock awards and other		173	173				173	[4]
ESPP issuances, net of purchase of treasury shares (in shares)	[3]				1
ESPP issuances, net of purchase of treasury shares		86	86		$ 86	[3]
Common stock dividends		(723)	(723)						(723)
Other increases (decreases) in noncontrolling interests		(1)									(1)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2022				1,757
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2022	[3]				(442)
Balance at end of period at Sep. 30, 2022		$ 71,011	$ 70,683		$ (30,326)	[3]	$ 48,047	[4]	$ 54,571	$ (1,609)	$ 328

[1] Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020.

[2] Common stock and capital surplus includes the par value of common stock of $17 million as of September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020.

[3] Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021.

[4] Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2022 and June 30, 2022 and $17 million as of March 31, 2022 and December 31, 2021.

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Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) shares in Millions, $ in Millions	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Treasury shares held in trust (in shares)	1	1	1	1	1	1	1	1
Treasury share held in trust	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29
Common stock	$ 18	$ 18	$ 17	$ 17	$ 17	$ 17	$ 17	$ 17

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Statement of Cash Flows [Abstract]
Cash and restricted cash sold	$ 2,808	$ 0

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Description of Business 

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health” or the “Company”), has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with over 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”). The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

The coronavirus disease 2019 (“COVID-19”) and its emerging new variants continue to impact the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q.

The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below.

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services and health information technology products and services. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers. The Company will enter Public Exchanges in four additional states effective January 2023. Open enrollment for the 2023 calendar year has begun in each of these twelve states.

Pharmacy Services Segment

The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services.

Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2022, the Retail/LTC segment operated more than 9,000

retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Corporate/Other Segment

The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of:

•Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and

•Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Restricted Cash

Restricted cash included in other current assets on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash included in other assets on the unaudited condensed consolidated balance sheets represents amounts held in a trust in one of the Company’s captive insurance companies to satisfy collateral requirements associated with the assignment of certain insurance policies. All restricted cash is invested in time deposits and money market funds.

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	September 30, 2022		December 31, 2021		September 30, 2021
Cash and cash equivalents	$	17,197	$	9,408	$	9,826
Restricted cash (included in other current assets)	151		3,065		2,996
Restricted cash (included in other assets)	215		218		218
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	17,563	$	12,691	$	13,040

The decrease in restricted cash included in other current assets as of September 30, 2022 compared to December 31, 2021 was primarily due to a decrease in health savings account funds held on behalf of customers as a result of the sale of PayFlex Holdings, Inc. (“PayFlex”). See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information on the Company’s sale of PayFlex.

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following:

In millions	September 30, 2022		December 31, 2021
Trade receivables	$	8,016	$	7,932
Vendor and manufacturer receivables	13,534		10,573
Premium receivables	2,368		2,537
Other receivables	2,647		3,389
Total accounts receivable, net (1)	$	26,565	$	24,431

_____________________________________________

(1)Includes accounts receivable of $248 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

The Company’s allowance for credit losses was $344 million and $339 million as of September 30, 2022 and December 31, 2021, respectively. When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

Revenue Recognition

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,947	$	20,759	$	—	$	(11,331)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,421		269		376		18		(85)		1,999
Total	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Pharmacy Services distribution channel:
Pharmacy network (1)			$	25,012
Mail choice (2)			17,935
Other			269
Total			$	43,216
Three Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	38,867	$	19,023	$	—	$	(10,857)	$	47,033
Front Store	—		—		5,359		—		—		5,359
Premiums	18,959		—		—		25		—		18,984
Net investment income (loss)	147		—		(33)		132		—		246
Other	1,373		179		643		14		(37)		2,172
Total	$	20,479	$	39,046	$	24,992	$	171	$	(10,894)	$	73,794
Pharmacy Services distribution channel:
Pharmacy network (1)			$	23,665
Mail choice (2)			15,202
Other			179
Total			$	39,046

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	124,712	$	60,308	$	—	$	(33,829)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,250		777		1,516		51		(203)		6,391
Total	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Pharmacy Services distribution channel:
Pharmacy network (1)			$	72,373
Mail choice (2)			52,339
Other			777
Total			$	125,489
Nine Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	113,161	$	55,781	$	—	$	(33,025)	$	135,917
Front Store	—		—		15,255		—		—		15,255
Premiums	56,869		—		—		58		—		56,927
Net investment income	432		—		13		387		—		832
Other	4,186		520		1,945		43		(118)		6,576
Total	$	61,487	$	113,681	$	72,994	$	488	$	(33,143)	$	215,507
Pharmacy Services distribution channel:
Pharmacy network (1)			$	68,476
Mail choice (2)			44,685
Other			520
Total			$	113,681

_____________________________________________

(1)Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice® activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.

(2)Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program.

Contract Balances

Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, and include ExtraBucks® Rewards and unredeemed Company gift cards. The consideration received remains a contract liability until goods or services have been provided to the customer. In addition, the Company recognizes breakage on Company gift cards based on historical redemption patterns.

The following table provides information about receivables and contract liabilities from contracts with customers:

In millions	September 30, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,016	$	7,932
Contract liabilities (included in accrued expenses)	74		87

During the nine months ended September 30, 2022 and 2021, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of Company gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or Company gift cards and breakage of Company gift cards. Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	250		286
Redemption and breakage	(263)		(279)
Contract liabilities, end of the period	$	74	$	78

Related Party Transactions

The Company has an equity method investment in SureScripts, LLC (“SureScripts”), which operates a clinical health information network. The Company utilizes this clinical health information network in providing services to its client plan members and retail customers. The Company expensed fees for the use of this network of $16 million in each of the three-month periods ended September 30, 2022 and 2021, and expensed fees for the use of this network of approximately $47 million and $35 million in the nine months ended September 30, 2022 and 2021, respectively. The Company’s investment in and equity in the earnings of SureScripts for all periods presented is immaterial.

The Company has an equity method investment in Heartland Healthcare Services, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $22 million and $20 million for pharmaceutical inventory purchases during the three months ended September 30, 2022 and 2021, respectively, and $66 million and $57 million for pharmaceutical inventory purchases during the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). This standard requires the Company to review cash flow assumptions for its long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires the Company to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other comprehensive income. The rate used to discount the Company’s liability for future policy benefits will be based on an estimate of the yield for an upper-medium grade fixed-income instrument with a duration profile matching that of the Company’s liabilities. In addition, this standard changes the amortization method for deferred acquisition costs and requires additional disclosures regarding the long duration insurance contract liabilities in the Company’s interim and annual financial statements. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the transition date, for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income on the transition date of approximately $1 billion as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

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Acquisition, Divestitures and Asset Sales

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition, Divestitures and Asset Sales

Acquisition, Divestitures and Asset Sales

Proposed Signify Health Acquisition

On September 2, 2022, the Company entered into a definitive merger agreement to acquire all of the outstanding shares of Signify Health, Inc. (“Signify Health”) for cash. Under the terms of the merger agreement, Signify Health stockholders will receive $30.50 per share in cash. The total value of the transaction is approximately $8 billion.

The proposed acquisition was approved by the Board of Directors at each of the respective companies and the Signify Health stockholders and remains subject to receipt of regulatory approval and satisfaction of other customary closing conditions. On October 19, 2022, Signify Health and CVS Health each received a request for additional information (also known as a “second request”) from the U.S. Department of Justice (the “DOJ”) in connection with the review of the transactions contemplated by the merger agreement by the DOJ under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction is expected to close in the first half of 2023.

If the merger agreement is terminated under certain specified circumstances and receipt of regulatory approval has not been obtained by such time, the Company will be required to pay Signify Health a termination fee in an amount equal to $380 million. If the merger agreement is terminated under other certain specified circumstances, including due to Signify Health accepting a superior proposal, Signify Health will be required to pay the Company a termination fee in an amount equal to $228 million.

Assets Held For Sale

Long-Term Care Business

The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its Omnicare® long-term care business (“LTC business”), which is included within the Retail/LTC segment, was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. The carrying value of the LTC business was determined to be greater than its fair value and, accordingly, the Company recorded a loss on assets held for sale of $2.5 billion in the three and nine months ended September 30, 2022 in the Company’s unaudited condensed consolidated statements of operations within the Retail/LTC segment. The LTC business income before income tax provision was not material for the three and nine months ended September 30, 2022 and 2021.

bswift Business

In October 2022, the Company reached an agreement to sell its wholly-owned subsidiary bswift LLC (“bswift business”) which is included in the Health Care Benefits segment. bswift offers software and services that streamline benefits and human resource administration. The sale is expected to close in the fourth quarter of 2022, subject to the satisfaction of customary closing conditions. The bswift business income before income tax provision was not material for the three and nine months ended September 30, 2022 and 2021.

Held-For-Sale Classification

The LTC and bswift businesses met the criteria to be classified as held for sale at September 30, 2022, but did not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities were included in the separate held-for-sale line items of the asset and liability sections of the unaudited condensed consolidated balance sheet. The following table summarizes the assets and liabilities held for sale at September 30, 2022:

In millions	September 30, 2022
Assets:
Accounts receivable, net	$	248
Inventories	201
Property and equipment, net	254
Goodwill (1)	475
Deferred income taxes	130
Other	190
Total assets held for sale	$	1,498
Liabilities:
Accounts payable	$	98
Accrued expenses	94
Other	104
Total liabilities held for sale	$	296

_____________________________________________

(1) $475 million of goodwill within the Commercial Business reporting unit was specifically allocated to the bswift business at September 30, 2022.

Divestiture of PayFlex

In June 2022, the Company sold PayFlex for approximately $775 million. PayFlex provides services to employers, their employees, and their former employees in the areas of tax-advantaged account reimbursement administration (flexible spending, health reimbursement, health savings, transit and parking), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration and special-member billing administration. The results of this business have historically been reported within the Health Care Benefits segment. The Company recorded a pre-tax gain on the divestiture of $225 million in the nine months ended September 30, 2022, which is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

Divestiture of Thailand Health Care Business

In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), comprised of approximately 266,000 medical members, which was included in the Commercial Business reporting unit within the Health Care Benefits segment. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and, accordingly, the Company recorded a $41 million loss on assets held for sale within the Health Care Benefits segment during the first quarter of 2022. The sale closed in the second quarter of 2022, and the consideration received and ultimate loss on the sale were not material.

International Health Care Benefits Renewal Rights Asset Sale

In May 2022, the Company sold the renewal rights of approximately 200,000 international medical members outside of the Americas, Thailand and India in connection with an Asset Purchase Agreement. As part of this agreement, the Company will introduce and help migrate these existing international medical members to the purchaser upon renewal. The Company expects the migration process to occur over a 16-month period between July 2022 and October 2023. The Company expects to cease writing any new or renewal business for international medical members outside of the Americas after October 31, 2022. The consideration received related to this agreement was not material.

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Investments

9 Months Ended

Sep. 30, 2022

Investments [Abstract]

Investments

Investments

Total investments at September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,729	$	17,311	$	20,040	$	3,009	$	20,231	$	23,240
Mortgage loans	58		989		1,047		58		844		902
Other investments	5		2,283		2,288		50		1,950		2,000
Total investments (1)	$	2,792	$	20,583	$	23,375	$	3,117	$	23,025	$	26,142

_____________________________________________

(1)Includes long-term investments of $18 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Debt Securities

Debt securities available for sale at September 30, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
Debt securities:
U.S. government securities	$	2,172	$	—	$	2,172	$	—	$	(191)	$	1,981
States, municipalities and political subdivisions	2,455		—		2,455		1		(182)		2,274
U.S. corporate securities	9,923		—		9,923		13		(1,080)		8,856
Foreign securities	2,820		(9)		2,811		7		(324)		2,494
Residential mortgage-backed securities	859		—		859		—		(109)		750
Commercial mortgage-backed securities	1,203		—		1,203		—		(166)		1,037
Other asset-backed securities	2,791		—		2,791		5		(171)		2,625
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,248	$	(9)	$	22,239	$	26	$	(2,225)	$	20,040
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2022, debt securities with a fair value of $612 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $73 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

The net amortized cost and fair value of debt securities at September 30, 2022 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.

In millions	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,299	$	1,288
One year through five years	6,704		6,260
After five years through ten years	4,980		4,347
Greater than ten years	4,403		3,733
Residential mortgage-backed securities	859		750
Commercial mortgage-backed securities	1,203		1,037
Other asset-backed securities	2,791		2,625
Total	$	22,239	$	20,040

Summarized below are the debt securities the Company held at September 30, 2022 and December 31, 2021 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position:

	Less than 12 months					Greater than 12 months					Total
In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2022
Debt securities:
U.S. government securities	570	$	1,845	$	179	25	$	125	$	12	595	$	1,970	$	191
States, municipalities and political subdivisions	1,129	1,949		153		122	207		29		1,251	2,156		182
U.S. corporate securities	6,083	7,503		889		848	1,027		191		6,931	8,530		1,080
Foreign securities	1,443	2,005		246		254	383		78		1,697	2,388		324
Residential mortgage-backed securities	489	562		68		69	187		41		558	749		109
Commercial mortgage-backed securities	368	772		101		127	265		65		495	1,037		166
Other asset-backed securities	1,266	2,311		148		163	292		23		1,429	2,603		171
Redeemable preferred securities	14	20		2		1	3		—		15	23		2
Total debt securities	11,362	$	16,967	$	1,786	1,609	$	2,489	$	439	12,971	$	19,456	$	2,225
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The Company reviewed the securities in the table above and concluded that they are performing assets generating investment income to support the needs of the Company’s business. In performing this review, the Company considered factors such as the quality of the investment security based on research performed by the Company’s internal credit analysts and external rating agencies and the prospects of realizing the carrying value of the security based on the investment’s current prospects for recovery. Unrealized capital losses at September 30, 2022 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2022, the Company did not intend to sell these securities, and did not believe it was more likely than not that it would be required to sell these securities prior to the anticipated recovery of their amortized cost basis.

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2022 were as follows:

	Supporting experience-rated products				Supporting remaining products				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Due to mature:
Less than one year	$	35	$	—	$	1,176	$	14	$	1,211	$	14
One year through five years	128		6		5,890		445		6,018		451
After five years through ten years	154		22		4,113		615		4,267		637
Greater than ten years	213		39		3,358		638		3,571		677
Residential mortgage-backed securities	11		1		738		108		749		109
Commercial mortgage-backed securities	32		3		1,005		163		1,037		166
Other asset-backed securities	17		2		2,586		169		2,603		171
Total	$	590	$	73	$	18,866	$	2,152	$	19,456	$	2,225

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
New mortgage loans	$	125	$	53	$	305	$	173
Mortgage loans fully repaid	62		88		136		260
Mortgage loans foreclosed	—		—		—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, property condition, market trends, creditworthiness of the borrower and deal structure.

•Category 1 - Represents loans of superior quality.

•Categories 2 to 4 - Represent loans where credit risk is minimal to acceptable; however, these loans may display some susceptibility to economic changes.

•Categories 5 and 6 - Represent loans where credit risk is not substantial, but these loans warrant management’s close attention.

•Category 7 - Represents loans where collections are potentially at risk; if necessary, an impairment is recorded.

Based on the Company’s assessments at September 30, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
September 30, 2022
1	$	—	$	—	$	—	$	—	$	—	$	16	$	16
2 to 4	279		247		48		11		54		379		1,018
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	279	$	247	$	48	$	11	$	57	$	405	$	1,047
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Debt securities	$	174	$	157	$	510	$	474
Mortgage loans	14		13		38		41
Other investments	134		109		279		307
Gross investment income	322		279		827		822
Investment expenses	(11)		(11)		(29)		(28)
Net investment income (excluding net realized capital gains or losses)	311		268		798		794
Net realized capital gains (losses) (1)	(110)		(22)		(283)		38
Net investment income (2)	$	201	$	246	$	515	$	832

_____________________________________________

(1)Net realized capital losses include credit-related losses on debt securities of $1 million and yield-related impairment losses on debt securities of $73 million in the three months ended September 30, 2022. Net realized capital losses include credit-related losses on debt securities of $17 million and yield-related impairment losses on debt securities of $121 million in the nine months ended September 30, 2022. Net realized capital losses include yield-related impairment losses on debt securities of $3 million in the three months ended September 30, 2021. Net realized capital gains are net of yield-related impairment losses on debt securities of $35 million in the nine months ended September 30, 2021. There were no credit-related losses on debt securities in the three and nine months ended September 30, 2021.

(2)Net investment income includes $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, and $9 million and $28 million for the three and nine months ended September 30, 2021, respectively, related to investments supporting experience-rated products.

Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Proceeds from sales	$	593	$	668	$	3,556	$	2,935
Gross realized capital gains	3		19		20		61
Gross realized capital losses	28		2		135		12

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Fair Value

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The preparation of the Company’s unaudited condensed consolidated financial statements in accordance with GAAP requires certain assets and liabilities to be reflected at their fair value and others to be reflected on another basis, such as an adjusted historical cost basis. The Company’s assets and liabilities carried at fair value have been classified within one of three levels of a hierarchy established by GAAP. The following are the levels of the hierarchy and a brief description of the type of valuation information (“valuation inputs”) that qualifies a financial asset or liability for each level:

•Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets.

•Level 2 – Valuation inputs other than Level 1 that are based on observable market data. These include: quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets, valuation inputs that are observable that are not prices (such as interest rates and credit risks) and valuation inputs that are derived from or corroborated by observable markets.

•Level 3 – Developed from unobservable data, reflecting the Company’s assumptions.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value” in the 2021 Form 10-K.

There were no financial liabilities measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2022 or December 31, 2021. Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2022
Cash and cash equivalents (1)	$	10,118	$	7,086	$	—	$	17,204
Debt securities:
U.S. government securities	1,949		32		—		1,981
States, municipalities and political subdivisions	—		2,274		—		2,274
U.S. corporate securities	—		8,818		38		8,856
Foreign securities	—		2,486		8		2,494
Residential mortgage-backed securities	—		750		—		750
Commercial mortgage-backed securities	—		1,037		—		1,037
Other asset-backed securities	—		2,625		—		2,625
Redeemable preferred securities	—		23		—		23
Total debt securities	1,949		18,045		46		20,040
Equity securities	104		—		66		170
Total	$	12,171	$	25,131	$	112	$	37,414
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

_____________________________________________

(1)Includes cash and cash equivalents of $7 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

During the three months ended September 30, 2022 there were no transfers into or out of Level 3. During the nine months ended September 30, 2022 there were $29 million of transfers out of Level 3. During the three and nine months ended September 30, 2021, there were no transfers into or out of Level 3.

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2022
Assets:
Mortgage loans	$	1,047	$	—	$	—	$	982	$	982
Equity securities (1)	183		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	4		—		—		4		4
Without a fixed maturity	331		—		—		296		296
Long-term debt (2)	52,214		46,375		—		—		46,375
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

(2)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Separate Accounts assets relate to the Company’s large case pensions products which represent funds maintained to meet specific objectives of contract holders. Since contract holders bear the investment risk of these assets, a corresponding Separate Accounts liability has been established equal to the assets. These assets and liabilities are carried at fair value. Separate Accounts financial assets as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	—	$	152	$	—	$	152	$	2	$	186	$	—	$	188
Debt securities	756		1,979		—		2,735		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		410		—		410		—		547		—		547
Total (1)	$	756	$	2,542	$	—	$	3,298	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $20 million and $70 million of other receivables at September 30, 2022 and December 31, 2021, respectively.

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Health Care Costs Payable

9 Months Ended

Sep. 30, 2022

Health Care and Other Insurance Liabilities [Abstract]

Health Care Costs Payable

Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2022 and 2021:

	Nine Months Ended September 30,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	53,311		48,243
Prior years	(670)		(771)
Total incurred health care costs (1)	52,641		47,472
Less: Claims paid
Current year	43,632		39,887
Prior years	7,468		6,639
Total claims paid	51,100		46,526
Add: Premium deficiency reserve	5		1
Health care costs payable, end of the period, net	10,346		8,873
Add: Reinsurance recoverables	5		4
Health care costs payable, end of the period	$	10,351	$	8,877

_____________________________________________

(1)Total incurred health care costs for the nine months ended September 30, 2022 and 2021 in the table above exclude (i) $5 million and $1 million, respectively, for premium deficiency reserves related to the Company’s Medicaid products, (ii) $56 million and $45 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $274 million and $168 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

The Company’s estimates of prior years’ health care costs payable decreased by $670 million and $771 million, respectively, in the nine months ended September 30, 2022 and 2021, because claims were settled for amounts less than originally estimated (i.e., the amount of claims incurred was lower than originally estimated), primarily due to lower health care cost trends as well as the actual claim submission time being faster than originally assumed (i.e., the Company’s completion factors were higher than originally assumed) in estimating health care costs payable at the end of the prior year.

At September 30, 2022, the Company’s liabilities for the ultimate cost of (i) services rendered to the Company’s Insured members but not yet reported to the Company and (ii) claims which have been reported to the Company but not yet paid (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2022 related to the current year.

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Borrowings

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2022 and December 31, 2021:

In millions	September 30, 2022		December 31, 2021
Long-term debt
3.5% senior notes due July 2022	$	—	$	1,500
2.75% senior notes due November 2022	—		1,000
2.75% senior notes due December 2022	—		1,250
4.75% senior notes due December 2022	—		399
2.8% senior notes due June 2023	1,300		1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
3.25% senior notes due August 2029	1,750		1,750
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
Finance lease liabilities	1,437		1,300
Other	315		320
Total debt principal	52,726		56,743
Debt premiums	204		219
Debt discounts and deferred financing costs	(716)		(786)
	52,214		56,176
Less:
Current portion of long-term debt	(1,363)		(4,205)
Long-term debt	$	50,851	$	51,971

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Long-term Borrowings

In May 2022, the Company exercised the par call option on its outstanding 3.5% senior notes due July 2022 and redeemed for cash on hand the entire $1.5 billion aggregate principal amount.

In August 2022, the Company exercised the par call option on its outstanding 2.75% senior notes due November 2022 (issued by Aetna Inc.) and redeemed for cash on hand the entire $1.0 billion aggregate principal amount.

In September 2022, the Company exercised the par call options on its outstanding 2.75% senior notes due December 2022 and 4.75% senior notes due December 2022 (including notes issued by Omnicare, Inc.) and redeemed for cash on hand the entire $1.25 billion and $399 million aggregate principal amounts, respectively.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Repurchases

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of September 30, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 Repurchase Program permits the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase (“ASR”) transactions, and/or other derivative transactions. The 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the nine months ended September 30, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Dividends

The quarterly cash dividend declared by the Board was $0.55 and $0.50 per share in the three months ended September 30, 2022 and 2021, respectively. Cash dividends declared by the Board were $1.65 and $1.50 per share in the nine months ended September 30, 2022 and 2021, respectively. CVS Health Corporation has paid cash dividends every quarter since becoming a public company. Future dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Board.

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Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2022

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,190)	$	977	$	778	$	1,214
Other comprehensive loss before reclassifications ($(796), $(73), $(3,306), $(346) pretax)	(711)		(61)		(2,809)		(297)
Amounts reclassified from accumulated other comprehensive income (loss) ($99, $(14), $253, $(15) pretax) (1)	88		(12)		218		(13)
Other comprehensive loss	(623)		(73)		(2,591)		(310)
End of period balance	(1,813)		904		(1,813)		904
Foreign currency translation adjustments:
Beginning of period balance	2		6		—		7
Other comprehensive loss before reclassifications	(7)		(5)		(5)		(6)
Other comprehensive loss	(7)		(5)		(5)		(6)
End of period balance	(5)		1		(5)		1
Net cash flow hedges:
Beginning of period balance	234		241		222		248
Other comprehensive income before reclassifications ($13, $0, $37, $0 pretax)	10		—		28		—
Amounts reclassified from accumulated other comprehensive income ($(2), $(20), $(10), $(29) pretax) (2)	(2)		(15)		(8)		(22)
Other comprehensive income (loss)	8		(15)		20		(22)
End of period balance	242		226		242		226
Pension and other postretirement benefits:
Beginning of period balance	(34)		(54)		(35)		(55)
Amounts reclassified from accumulated other comprehensive loss ($1, $0, $2, $1 pretax) (3)	1		—		2		1
Other comprehensive income	1		—		2		1
End of period balance	(33)		(54)		(33)		(54)
Total beginning of period accumulated other comprehensive income (loss)	(988)		1,170		965		1,414
Total other comprehensive loss	(621)		(93)		(2,574)		(337)
Total end of period accumulated other comprehensive income (loss)	$	(1,609)	$	1,077	$	(1,609)	$	1,077

_____________________________________________

(1)Amounts reclassified from accumulated other comprehensive income (loss) for specifically identified debt securities are included in net investment income in the unaudited condensed consolidated statements of operations.

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(3)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings (loss) per share is computed using the treasury stock method. For periods in which the Company reports net income, diluted earnings per share is determined using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. Stock options and stock appreciation rights to purchase 4 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share in each of the three and nine-month periods ended September 30, 2022 because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, stock options and stock appreciation rights to purchase 8 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share in each of the three and nine-month periods ended September 30, 2021. In addition, due to the net loss attributable to CVS Health in the three months ended September 30, 2022, 8 million potentially dilutive common equivalent shares were excluded from the calculation of diluted earnings per share, as the impact of these shares were antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share for the respective periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2022		2021		2022		2021
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	(3,416)	$	1,598	$	1,847	$	6,604
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,315		1,321		1,313		1,318
Restricted stock units and performance stock units	—		4		6		5
Stock options and stock appreciation rights	—		4		5		3
Weighted average shares, diluted	1,315		1,329		1,324		1,326
Earnings (loss) per share:
Basic	$	(2.60)	$	1.21	$	1.41	$	5.01
Diluted	$	(2.60)	$	1.20	$	1.40	$	4.98

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

COVID-19

The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company.

Lease Guarantees

Between 1995 and 1997, the Company sold or spun off a number of subsidiaries, including Bob’s Stores and Linens ‘n Things, each of which subsequently filed for bankruptcy, and Marshalls. In many cases, when a former subsidiary leased a store, the Company provided a guarantee of the former subsidiary’s lease obligations for the initial lease term and any extension thereof pursuant to a renewal option provided for in the lease prior to the time of the disposition. When the subsidiaries were disposed of and accounted for as discontinued operations, the Company’s guarantees remained in place, although each initial purchaser agreed to indemnify the Company for any lease obligations the Company was required to satisfy. If any of the purchasers or any of the former subsidiaries fail to make the required payments under a store lease, the Company could be required to satisfy those obligations, and any significant adverse impact of COVID-19 on such purchasers and/or former subsidiaries increases the risk that the Company will be required to satisfy those obligations. As of September 30, 2022, the Company guaranteed 68 such

store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the unaudited condensed consolidated balance sheets), with the maximum remaining lease term extending through 2034.

Guaranty Fund Assessments, Market Stabilization and Other Non-Voluntary Risk Sharing Pools

Under guaranty fund laws existing in all states, insurers doing business in those states can be assessed (in most states up to prescribed limits) for certain obligations of insolvent insurance companies to policyholders and claimants. The life and health insurance guaranty associations in which the Company participates that operate under these laws respond to insolvencies of long-term care insurers and life insurers as well as health insurers. The Company’s assessments generally are based on a formula relating to the Company’s health care premiums in the state compared to the premiums of other insurers. Certain states allow assessments to be recovered over time as offsets to premium taxes. Some states have similar laws relating to HMOs and/or other payors such as not-for-profit consumer-governed health plans established under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

In 2009, the Pennsylvania Insurance Commissioner placed long-term care insurer Penn Treaty Network America Insurance Company and one of its subsidiaries (collectively, “Penn Treaty”) in rehabilitation, an intermediate action before insolvency, and subsequently petitioned a state court to convert the rehabilitation into a liquidation. Penn Treaty was placed in liquidation in March 2017. The Company has recorded a liability for its estimated share of future assessments by applicable life and health insurance guaranty associations. It is reasonably possible that in the future the Company may record a liability and expense relating to other insolvencies which could have a material adverse effect on the Company’s operating results, financial condition and cash flows, and the risk is heightened by any significant adverse impact of the COVID-19 pandemic on the solvency of other insurers, including long-term care and life insurers. While historically the Company has ultimately recovered more than half of guaranty fund assessments through statutorily permitted premium tax offsets, significant increases in assessments could lead to legislative and/or regulatory actions that limit future offsets.

HMOs in certain states in which the Company does business are subject to assessments, including market stabilization and other risk-sharing pools, for which the Company is assessed charges based on incurred claims, demographic membership mix and other factors. The Company establishes liabilities for these assessments based on applicable laws and regulations. In certain states, the ultimate assessments the Company pays are dependent upon the Company’s experience relative to other entities subject to the assessment, and the ultimate liability is not known at the financial statement date. While the ultimate amount of the assessment is dependent upon the experience of all pool participants, the Company believes it has adequate reserves to cover such assessments.

Litigation and Regulatory Proceedings

The Company has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by the U.S. Centers for Medicare & Medicaid Services (“CMS”), state insurance and health and welfare departments, the DOJ, state attorneys general, the U.S. Drug Enforcement Administration (the “DEA”), the Federal Trade Commission (the “FTC”) and other governmental authorities.

Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, and governmental special investigations, audits and reviews can be expensive and disruptive. Some of the litigation matters may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. The Company also may be named from time to time in qui tam actions initiated by private third parties that could also be separately pursued by a governmental body. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome.

The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability. None of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s financial condition.

Except as otherwise noted, the Company cannot predict with certainty the timing or outcome of the legal matters described below, and the Company is unable to reasonably estimate a possible loss or range of possible loss in excess of amounts already

accrued for these matters. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s financial position. Substantial unanticipated verdicts, fines and rulings, however, do sometimes occur, which could result in judgments against the Company, entry into settlements or a revision to its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions including possible suspension or loss of licensure and/or exclusion from participating in government programs. The outcome of such governmental investigations of proceedings could be material to the Company.

Usual and Customary Pricing Litigation

The Company and certain current and former directors and officers are named as a defendant in a number of lawsuits that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions are brought by a number of different types of plaintiffs, including plan members, private payors, government payors, and shareholders based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. In October 2022, one of the litigating shareholders made a litigation demand to the Board related to these and other issues after his amended derivative complaint was dismissed for failing to demonstrate demand futility. The Company is defending itself against these claims.

PBM Litigation and Investigations

The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its PBM practices.

The Company is facing multiple lawsuits, including by a State Attorney General, governmental subdivisions and several putative class actions, regarding drug pricing and its rebate arrangements with drug manufacturers. These complaints, brought by a number of different types of plaintiffs under a variety of legal theories, generally allege that rebate agreements between the drug manufacturers and PBMs caused inflated prices for certain drug products. The Company is defending itself against these claims. The Company has also received subpoenas, civil investigative demands (“CIDs”) and other requests for documents and information from, and is being investigated by, the FTC and Attorneys General of several states and the District of Columbia regarding its PBM practices, including pricing and rebates. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information.

United States ex rel. Behnke v. CVS Caremark Corporation, et al. (U.S. District Court for the Eastern District of Pennsylvania). In April 2018, the Court unsealed a complaint filed in February 2014. The government has declined to intervene in this case. The relator alleges that the Company submitted, or caused to be submitted, to Part D of the Medicare program Prescription Drug Event data and/or Direct and Indirect Remuneration reports that misrepresented true prices paid by the Company’s PBM to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered by the Company’s PBM. The Company is defending itself against these claims.

Controlled Substances Litigation, Audits and Subpoenas

In December 2017, the U.S. Judicial Panel on Multidistrict Litigation consolidated numerous cases filed against various defendants by plaintiffs such as counties, cities, hospitals, Indian tribes and third-party payors, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The consolidated multidistrict litigation captioned In re National Prescription Opiate Litigation (MDL No. 2804) is pending in the U.S. District Court for the Northern District of Ohio. This multidistrict litigation presumptively includes hundreds of relevant federal court cases that name the Company as a defendant. A significant number of similar cases that name the Company as a defendant in some capacity are pending in state courts.

In addition, the Company has been named as a defendant in similar cases brought by certain state Attorneys General. The Company is defending itself against all such claims. Additionally, the Company has received subpoenas, CIDs and/or other requests for information regarding opioids from state Attorneys General and insurance and other regulators of several U.S. jurisdictions. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information.

In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; in August 2022, the court issued a judgment jointly against the three defendants in the amount of $651 million to be paid over 15 years, and also ordered certain injunctive relief. The Company is appealing the judgment. In March 2022, CVS Health Corporation and CVS Pharmacy, Inc. entered into a settlement agreement with the State of Florida to resolve claims related to opioid medications dating back more than a decade. Under the terms of the settlement agreement, CVS Health Corporation settled all opioid claims against it and its subsidiaries by the State of Florida for $484 million, which is to be paid over a period of 18 years. During the three months ended March 31, 2022, the Company recorded a $484 million liability associated with this legal settlement. In August 2022, CVS Pharmacy, Inc. entered into an agreement with the State of New Mexico to settle all opioid claims against it and its parents and subsidiaries by the State of New Mexico and participating subdivisions. In September 2022, CVS Pharmacy, Inc. entered into an agreement with the State of West Virginia to settle all opioid claims against it and its parents and subsidiaries by the State of West Virginia and participating subdivisions. Also in September 2022, CVS Pharmacy, Inc. entered into an agreement with the Cherokee Nation to settle all opioid claims against it and its parents and subsidiaries by the Cherokee Nation.

On October 18, 2022, the Company began mediation with a leadership group of a number of state attorneys general and the Plaintiffs’ Executive Committee (“PEC”) to resolve substantially all opioid lawsuits and claims against Company entities. Discussions progress and the Company agreed in principle to a financial amount to resolve substantially all opioid lawsuits and claims against Company entities by states, political subdivisions and tribes, but not private plaintiffs (the “Settlement Framework”). This Settlement Framework is subject to contingencies and uncertainties as to final terms, but is the basis for our negotiation of definitive terms and documentation. The Settlement Framework provides for payment by the Company of approximately $5.0 billion (approximately $4.9 billion to states and political subdivisions and approximately $130 million to tribes) over ten years, beginning in 2023. The non-monetary terms are subject to ongoing negotiations.

Under the Settlement Framework, before the Company determines whether to enter into any final settlement, it will assess the sufficiency of the scope of settlement, based in part on the number and identities of the governmental entities that will participate in any such settlement. The Settlement Framework contemplates that if certain governmental entities do not agree to a settlement under the Settlement Framework, but the Company nonetheless concluded that there was sufficient participation to warrant going forward with the settlement, there would be a corresponding reduction in the amount due from the Company to account for the governmental entities that did not agree. Those non-participating governmental entities would be entitled to pursue their claims against the Company and other defendants. Private plaintiff litigation will also continue.

The Company has concluded that discussions under the Settlement Framework have reached a stage at which a broad settlement of opioid claims by governmental entities is probable, and the loss related thereto can be reasonably estimated as of September 30, 2022. As a result of that conclusion, and its assessment of certain other opioid-related claims including those for which the Company reached agreement in August and September, the Company recorded a total pre-tax charge of $5.2 billion during the three months ended September 30, 2022 reflecting the cash component of the estimated loss. In addition, the Company expects the cash impact in 2023 and 2024 to be less than $500 million in each year. Because loss contingencies are inherently unpredictable and unfavorable developments or resolutions can occur, the assessment is highly subjective and requires judgments about future events. Moreover, the Settlement Framework is in its early phases, and there is no assurance that the necessary parties will agree to a definitive settlement agreement or that the contingencies to any agreement will be satisfied. The amount of ultimate loss may differ materially from this accrual.

Because of the many uncertainties associated with any potential settlement arrangement or other resolution of all opioid-related litigation matters, including the uncertain scope of participation by governmental entities in any potential settlement under the Settlement Framework described above and that the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time. The outcome of these legal matters could have a material effect on the Company’s business, financial condition, operating results and/or cash flows.

In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to prescription opioids and other controlled substances at CVS pharmacy locations concerning potential violations of the federal Controlled Substances Act and the federal False Claims Act. In January 2022, the DOJ served the Company with a CID regarding similar subjects. The Company is providing documents and information in response to these matters.

Prescription Processing Litigation and Investigations

The Company is named as a defendant in a number of lawsuits and is subject to a number of investigations concerning its prescription processing practices, including the following:

U.S. ex rel. Bassan et al. v. Omnicare, Inc. and CVS Health Corp. (U.S. District Court for the Southern District of New York). In December 2019, the U.S. Attorney’s Office for the Southern District of New York (the “SDNY”) filed a complaint-in-intervention in this previously sealed qui tam case. The complaint alleges that for certain non-skilled nursing facilities, Omnicare improperly filled prescriptions beyond one year where a valid prescription did not exist and that these dispensing events violated the federal False Claims Act. The Company is defending itself against these claims.

U.S. ex rel. Gill et al. v. CVS Health Corp. et al. (U.S. District Court for the Northern District of Illinois). In July 2022, the Delaware Attorney General’s Office moved for partial intervention as to allegations under the Delaware false claims act related to not escheating alleged overpayments in this previously sealed qui tam case. The federal government and the remaining states declined to intervene on other additional theories in the relator’s complaint. The Company is defending itself against all of the claims.

In July 2017, the Company also received a subpoena from the California Department of Insurance requesting documents concerning the Company’s Omnicare pharmacies’ cycle fill process for assisted living facilities. The Company has been cooperating with the California Department of Insurance and providing documents and information in response to this subpoena.

In December 2016, the Company received a CID from the U.S. Attorney’s Office for the Northern District of New York requesting documents and information in connection with a federal False Claims Act investigation concerning whether the Company’s retail pharmacies improperly submitted certain insulin claims to Part D of the Medicare program rather than Part B of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to this CID.

Provider Proceedings

The Company is named as a defendant in purported class actions and individual lawsuits arising out of its practices related to the payment of claims for services rendered to its members by providers with whom the Company has a contract and with whom the Company does not have a contract (“out-of-network providers”). Among other things, these lawsuits allege that the Company paid too little to its health plan members and/or providers for out-of-network services (including COVID-19 testing) and/or otherwise allege that the Company failed to timely or appropriately pay or administer out-of-network claims and benefits (including the Company’s post payment audit and collection practices and reductions in payments to providers due to sequestration). Other major health insurers are the subject of similar litigation or have settled similar litigation.

The Company also has received subpoenas and/or requests for documents and other information from, and been investigated by, state Attorneys General and other state and/or federal regulators, legislators and agencies relating to, and the Company is involved in other litigation regarding, its out-of-network benefit payment and administration practices. It is reasonably possible that others could initiate additional litigation or additional regulatory action against the Company with respect to its out-of-network benefit payment and/or administration practices.

CMS Actions

CMS regularly audits the Company’s performance to determine its compliance with CMS’s regulations and its contracts with CMS and to assess the quality of services it provides to Medicare beneficiaries. CMS uses various payment mechanisms to allocate and adjust premium payments to the Company’s and other companies’ Medicare plans by considering the applicable health status of Medicare members as supported by information prepared, maintained and provided by providers. The Company collects claim and encounter data from providers and generally relies on providers to appropriately code their submissions to the Company and document their medical records, including the diagnosis data submitted to the Company with claims. CMS pays increased premiums to Medicare Advantage plans and Medicare PDP plans for members who have certain medical conditions identified with specific diagnosis codes. Federal regulators review and audit the providers’ medical records to determine whether those records support the related diagnosis codes that determine the members’ health status and the resulting risk-adjusted premium payments to the Company. In that regard, CMS has instituted risk adjustment data validation (“RADV”) audits of various Medicare Advantage plans, including certain of the Company’s plans, to validate coding practices and supporting medical record documentation maintained by providers and the resulting risk-adjusted premium payments to the

plans. CMS may require the Company to refund premium payments if the Company’s risk-adjusted premiums are not properly supported by medical record data. The Office of the Inspector General of the U.S. Department of Health and Human Services (“OIG”) also is auditing the Company’s risk adjustment-related data and that of other companies. The Company expects CMS and the OIG to continue these types of audits.

In 2012, CMS revised its audit methodology for RADV audits to determine refunds payable by Medicare Advantage plans for contract year 2011 and forward. Under the revised methodology, among other things, CMS will extrapolate the error rate identified in the audit sample of approximately 200 members to all risk-adjusted premium payments made under the contract being audited. For contract years prior to 2011, CMS did not extrapolate sample error rates to the entire contract. As a result, the revised methodology may increase the Company’s exposure to premium refunds to CMS based on incomplete medical records maintained by providers. Since 2013, CMS has selected certain of the Company’s Medicare Advantage contracts for various contract years for RADV audit, and the number of RADV audits continues to increase. The Company is currently unable to predict which of its Medicare Advantage contracts will be selected for future audit, the amounts of any retroactive refunds of, or prospective adjustments to, Medicare Advantage premium payments made to the Company, the effect of any such refunds or adjustments on the actuarial soundness of the Company’s Medicare Advantage bids, or whether any RADV audit findings would require the Company to change its method of estimating future premium revenue in future bid submissions to CMS or compromise premium assumptions made in the Company’s bids for prior contract years, the current contract year or future contract years. Any premium or fee refunds or adjustments resulting from regulatory audits, whether as a result of RADV, Public Exchange related or other audits by CMS, the OIG or otherwise, including audits of the Company’s minimum medical loss ratio rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, cash flows and/or financial condition.

Medicare and Medicaid CIDs

The Company has received CIDs from the Civil Division of the DOJ in connection with a current investigation of the Company’s patient chart review processes in connection with risk adjustment data submissions under Parts C and D of the Medicare program. The Company has been cooperating with the government and providing documents and information in response to these CIDs.

In May 2017, the Company received a CID from the SDNY requesting documents and information concerning possible false claims submitted to Medicare in connection with reimbursements for prescription drugs under the Medicare Part D program. The Company has been cooperating with the government and providing documents and information in response to this CID.

Stockholder Matters

Beginning in February 2019, multiple class action complaints, as well as a derivative complaint, were filed by putative plaintiffs against the Company and certain current and former officers and directors. The plaintiffs in these cases assert a variety of causes of action under federal securities laws that are premised on allegations that the defendants made certain omissions and misrepresentations relating to the performance of the Company’s LTC business unit. The Company and its current and former officers and directors are defending themselves against these claims. Since filing, several of the cases have been consolidated, and the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), was dismissed with prejudice in February 2021. Plaintiffs appealed that decision to the First Circuit after their motion for reconsideration was denied, and in August 2022 the First Circuit affirmed the dismissal. In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford) and In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich) have been stayed pending the outcome of the First Circuit appeal. Plaintiffs in In re CVS Health Corp. Securities Litigation filed an amended complaint, which the Company moved to dismiss in October 2022.

In August and September 2020, two class actions under the Employee Retirement Income Security Act of 1974 (“ERISA”) were filed in the U.S. District Court for the District of Connecticut against CVS Health, Aetna Inc. (“Aetna”), and several current and former executives, directors and/or members of Aetna’s Compensation and Talent Management Committee: Radcliffe v. Aetna Inc., et al. and Flaim v. Aetna Inc., et al. The plaintiffs in these cases assert a variety of causes of action premised on allegations that the defendants breached fiduciary duties and engaged in prohibited transactions relating to participants in the Aetna 401(k) Plan’s investment in company stock between December 3, 2017 and February 20, 2019, claiming losses related to the performance of the Company’s LTC business unit. The district court consolidated the actions, and in October 2021, dismissed the consolidated action without prejudice. Plaintiffs filed an amended consolidated complaint, which the Company has moved to dismiss. In October 2022, the court granted the Company’s motion to dismiss with prejudice. Plaintiffs have appealed this decision to the Second Circuit. The Company also received a related document request pursuant to

ERISA § 104(b), to which the Company has responded. The Company and its current and former officers and directors are defending themselves against these claims.

In December 2021, the Company received a demand for inspection of books and records pursuant to Delaware Corporation Law Section 220 (the “Demand”). The Demand purports to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids.

Other Legal and Regulatory Proceedings

The Company is also a party to other legal proceedings and is subject to government investigations, inquiries and audits and has received and is cooperating with the government in response to CIDs, subpoenas or similar process from various governmental agencies requesting information. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, breach of fiduciary duty, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, denial of or failure to timely or appropriately pay or administer claims and benefits, provider network structure (including the use of performance-based networks and termination of provider contracts), rescission of insurance coverage, improper disclosure or use of personal information, anticompetitive practices, general contractual matters, product liability, intellectual property litigation and employment litigation. Some of these other legal proceedings are or are purported to be class actions or derivative claims. The Company is defending itself against the claims brought in these matters.

Awards to the Company and others of certain government contracts, particularly Medicaid contracts and other contracts with government customers in the Company’s Health Care Benefits segment, frequently are subject to protests by unsuccessful bidders. These protests may result in awards to the Company being reversed, delayed or modified. The loss or delay in implementation of any government contract could adversely affect the Company’s operating results. The Company will continue to defend contract awards it receives.

There also continues to be a heightened level of review and/or audit by regulatory authorities and legislators of, and increased litigation regarding, the Company’s and the rest of the health care and related benefits industry’s business and reporting practices, including premium rate increases, utilization management, development and application of medical policies, complaint, grievance and appeal processing, information privacy, provider network structure (including provider network adequacy, the use of performance-based networks and termination of provider contracts), provider directory accuracy, calculation of minimum medical loss ratios and/or payment of related rebates, delegated arrangements, rescission of insurance coverage, limited benefit health products, student health products, pharmacy benefit management practices (including manufacturers’ rebates, pricing, the use of narrow networks and the placement of drugs in formulary tiers), sales practices, customer service practices, vendor oversight and claim payment practices (including payments to out-of-network providers).

As a leading national health solutions company, the Company regularly is the subject of government actions of the types described above. These government actions may prevent or delay the Company from implementing planned premium rate increases and may result, and have resulted, in restrictions on the Company’s businesses, changes to or clarifications of the Company’s business practices, retroactive adjustments to premiums, refunds or other payments to members, beneficiaries, states or the federal government, withholding of premium payments to the Company by government agencies, assessments of damages, civil or criminal fines or penalties, or other sanctions, including the possible suspension or loss of licensure and/or suspension or exclusion from participation in government programs.

The Company can give no assurance that its businesses, financial condition, operating results and/or cash flows will not be materially adversely affected, or that the Company will not be required to materially change its business practices, based on: (i) future enactment of new health care or other laws or regulations; (ii) the interpretation or application of existing laws or regulations as they may relate to one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iii) pending or future federal or state government investigations of one or more of the Company’s businesses, one or more of the industries in which the Company competes and/or the health care industry generally; (iv) pending or future government audits, investigations or enforcement actions against the Company; (v) adverse developments in any pending qui tam lawsuit against the Company, whether sealed or unsealed, or in any future qui tam lawsuit that may be filed against the Company; or (vi) adverse developments in pending or future legal proceedings against the Company or affecting one or more of the industries in which the Company competes and/or the health care industry generally.

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Segment Reporting

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment ReportingThe Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, 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 (loss) (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 consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income below for further context regarding the items excluded from operating income (loss) 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	Health Care Benefits		Pharmacy  Services (1)		Retail/ LTC		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2022
Revenues from external customers	$	22,387	$	40,545	$	17,994	$	32	$	—	$	80,958
Intersegment revenues	23		2,671		8,722		—		(11,416)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,511		43,216		26,706		142		(11,416)		81,159
Adjusted operating income (loss)	1,544		1,877		1,398		(417)		(169)		4,233
September 30, 2021
Revenues from external customers	$	20,311	$	36,851	$	16,347	$	39	$	—	$	73,548
Intersegment revenues	21		2,195		8,678		—		(10,894)		—
Net investment income (loss)	147		—		(33)		132		—		246
Total revenues	20,479		39,046		24,992		171		(10,894)		73,794
Adjusted operating income (loss)	1,106		1,773		1,723		(343)		(186)		4,073
Nine Months Ended
September 30, 2022
Revenues from external customers	$	68,029	$	116,600	$	53,380	$	97	$	—	$	238,106
Intersegment revenues	69		8,889		25,074		—		(34,032)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,376		125,489		78,410		378		(34,032)		238,621
Adjusted operating income (loss)	5,126		5,368		4,865		(1,277)		(556)		13,526
September 30, 2021
Revenues from external customers	$	60,993	$	105,909	$	47,672	$	101	$	—	$	214,675
Intersegment revenues	62		7,772		25,309		—		(33,143)		—
Net investment income	432		—		13		387		—		832
Total revenues	61,487		113,681		72,994		488		(33,143)		215,507
Adjusted operating income (loss)	4,502		5,035		5,166		(1,015)		(523)		13,165

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $2.9 billion and $2.8 billion of retail co-payments for the three months ended September 30, 2022 and 2021, respectively, and $9.8 billion and $9.0 billion of retail co-payments for the nine months ended September 30, 2022 and 2021, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis.

The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Operating income (loss) (GAAP measure)	$	(3,931)	$	3,061	$	4,128	$	10,964
Amortization of intangible assets (1)	464		561		1,398		1,730
Opioid litigation charges (2)	5,220		—		5,704		—
Loss on assets held for sale (3)	2,480		—		2,521		—
Gain on divestiture of subsidiary (4)	—		—		(225)		—
Acquisition-related integration costs (5)	—		20		—		101
Goodwill impairment (6)	—		431		—		431
Acquisition purchase price adjustment outside of measurement period (7)	—		—		—		(61)
Adjusted operating income	$	4,233	$	4,073	$	13,526	$	13,165

_____________________________________________

(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 unaudited 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, 2022 the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and governmental entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(3)During the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the LTC reporting unit within the Retail/LTC segment. The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its LTC business was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. As of September 30, 2022, the LTC business met the criteria for held-for-sale accounting and the net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the third quarter of 2022. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which was included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the first quarter of 2022. The sale closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(4)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex, which the Company sold in June 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statement of operations within the Health Care Benefits segment.

(5)During the three and nine months ended September 30, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(6)During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

(7)In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Segment Reporting

The Company has four reportable segments: Health Care Benefits, Pharmacy Services, Retail/LTC and Corporate/Other, which are described below.

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. The Health Care Benefits segment has the information and resources to help members, in consultation with their health care professionals, make more informed decisions about their health care. The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services and health information technology products and services. The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates. The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers. The Company will enter Public Exchanges in four additional states effective January 2023. Open enrollment for the 2023 calendar year has begun in each of these twelve states.

Pharmacy Services Segment

The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including plan design offerings and administration, formulary management, retail pharmacy network management services and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. The Pharmacy Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. The Pharmacy Services segment operates retail specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies, compounding pharmacies and branches for infusion and enteral nutrition services.

Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of September 30, 2022, the Retail/LTC segment operated more than 9,000

retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Corporate/Other Segment

The Company presents the remainder of its financial results in the Corporate/Other segment, which primarily consists of:

•Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human resources, information technology and finance departments, expenses associated with the Company’s investments in its transformation and enterprise modernization programs and acquisition-related integration costs; and

•Products for which the Company no longer solicits or accepts new customers such as its large case pensions and long-term care insurance products.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. All material intercompany balances and transactions have been eliminated.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Restricted Cash

Restricted CashRestricted cash included in other current assets on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash included in other assets on the unaudited condensed consolidated balance sheets represents amounts held in a trust in one of the Company’s captive insurance companies to satisfy collateral requirements associated with the assignment of certain insurance policies. All restricted cash is invested in time deposits and money market funds.

Accounts Receivable

Accounts ReceivableAccounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations

Accounts Receivable, Allowance for Credit Losses

When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

Contract Balances

Contract Balances

Contract liabilities primarily represent the Company’s obligation to transfer additional goods or services to a customer for which the Company has received consideration, and include ExtraBucks® Rewards and unredeemed Company gift cards. The consideration received remains a contract liability until goods or services have been provided to the customer. In addition, the Company recognizes breakage on Company gift cards based on historical redemption patterns.

Related Party Transactions

Related Party Transactions

The Company has an equity method investment in SureScripts, LLC (“SureScripts”), which operates a clinical health information network. The Company utilizes this clinical health information network in providing services to its client plan members and retail customers. The Company expensed fees for the use of this network of $16 million in each of the three-month periods ended September 30, 2022 and 2021, and expensed fees for the use of this network of approximately $47 million and $35 million in the nine months ended September 30, 2022 and 2021, respectively. The Company’s investment in and equity in the earnings of SureScripts for all periods presented is immaterial.

The Company has an equity method investment in Heartland Healthcare Services, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $22 million and $20 million for pharmaceutical inventory purchases during the three months ended September 30, 2022 and 2021, respectively, and $66 million and $57 million for pharmaceutical inventory purchases during the nine months ended September 30, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944). This standard requires the Company to review cash flow assumptions for its long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income. This standard also requires the Company to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other comprehensive income. The rate used to discount the Company’s liability for future policy benefits will be based on an estimate of the yield for an upper-medium grade fixed-income instrument with a duration profile matching that of the Company’s liabilities. In addition, this standard changes the amortization method for deferred acquisition costs and requires additional disclosures regarding the long duration insurance contract liabilities in the Company’s interim and annual financial statements. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the transition date, for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income on the transition date of approximately $1 billion as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Reconciliation of cash and cash equivalents

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	September 30, 2022		December 31, 2021		September 30, 2021
Cash and cash equivalents	$	17,197	$	9,408	$	9,826
Restricted cash (included in other current assets)	151		3,065		2,996
Restricted cash (included in other assets)	215		218		218
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	17,563	$	12,691	$	13,040

Schedule of accounts receivable, net

Accounts receivable, net is composed of the following:

In millions	September 30, 2022		December 31, 2021
Trade receivables	$	8,016	$	7,932
Vendor and manufacturer receivables	13,534		10,573
Premium receivables	2,368		2,537
Other receivables	2,647		3,389
Total accounts receivable, net (1)	$	26,565	$	24,431

_____________________________________________

(1)Includes accounts receivable of $248 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Disaggregation of revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,947	$	20,759	$	—	$	(11,331)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,421		269		376		18		(85)		1,999
Total	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Pharmacy Services distribution channel:
Pharmacy network (1)			$	25,012
Mail choice (2)			17,935
Other			269
Total			$	43,216
Three Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	38,867	$	19,023	$	—	$	(10,857)	$	47,033
Front Store	—		—		5,359		—		—		5,359
Premiums	18,959		—		—		25		—		18,984
Net investment income (loss)	147		—		(33)		132		—		246
Other	1,373		179		643		14		(37)		2,172
Total	$	20,479	$	39,046	$	24,992	$	171	$	(10,894)	$	73,794
Pharmacy Services distribution channel:
Pharmacy network (1)			$	23,665
Mail choice (2)			15,202
Other			179
Total			$	39,046

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	124,712	$	60,308	$	—	$	(33,829)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,250		777		1,516		51		(203)		6,391
Total	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Pharmacy Services distribution channel:
Pharmacy network (1)			$	72,373
Mail choice (2)			52,339
Other			777
Total			$	125,489
Nine Months Ended September 30, 2021
Major goods/services lines:
Pharmacy	$	—	$	113,161	$	55,781	$	—	$	(33,025)	$	135,917
Front Store	—		—		15,255		—		—		15,255
Premiums	56,869		—		—		58		—		56,927
Net investment income	432		—		13		387		—		832
Other	4,186		520		1,945		43		(118)		6,576
Total	$	61,487	$	113,681	$	72,994	$	488	$	(33,143)	$	215,507
Pharmacy Services distribution channel:
Pharmacy network (1)			$	68,476
Mail choice (2)			44,685
Other			520
Total			$	113,681

_____________________________________________

(1)Pharmacy Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies, but excluding Maintenance Choice® activity, which is included within the mail choice category. Maintenance Choice permits eligible client plan members to fill their maintenance prescriptions through mail order delivery or at a CVS pharmacy retail store for the same price as mail order.

(2)Pharmacy Services mail choice is defined as claims filled at a Pharmacy Services mail order facility, which includes specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as prescriptions filled at the Company’s retail pharmacies under the Maintenance Choice program.

Schedule of receivables and contract liabilities from contracts with customers

The following table provides information about receivables and contract liabilities from contracts with customers:

In millions	September 30, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,016	$	7,932
Contract liabilities (included in accrued expenses)	74		87

During the nine months ended September 30, 2022 and 2021, the contract liabilities balance includes increases related to customers’ earnings in ExtraBucks Rewards or issuances of Company gift cards and decreases for revenues recognized during the period as a result of the redemption of ExtraBucks Rewards or Company gift cards and breakage of Company gift cards. Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	250		286
Redemption and breakage	(263)		(279)
Contract liabilities, end of the period	$	74	$	78

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Acquisition, Divestitures and Asset Sales (Tables)

9 Months Ended

Sep. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Summary of Assets and Liabilities Held for Sale

The following table summarizes the assets and liabilities held for sale at September 30, 2022:

In millions	September 30, 2022
Assets:
Accounts receivable, net	$	248
Inventories	201
Property and equipment, net	254
Goodwill (1)	475
Deferred income taxes	130
Other	190
Total assets held for sale	$	1,498
Liabilities:
Accounts payable	$	98
Accrued expenses	94
Other	104
Total liabilities held for sale	$	296

_____________________________________________

(1) $475 million of goodwill within the Commercial Business reporting unit was specifically allocated to the bswift business at September 30, 2022.

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Investments (Tables)

9 Months Ended

Sep. 30, 2022

Investments [Abstract]

Schedule of Total Investments

Total investments at September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,729	$	17,311	$	20,040	$	3,009	$	20,231	$	23,240
Mortgage loans	58		989		1,047		58		844		902
Other investments	5		2,283		2,288		50		1,950		2,000
Total investments (1)	$	2,792	$	20,583	$	23,375	$	3,117	$	23,025	$	26,142

_____________________________________________

(1)Includes long-term investments of $18 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Schedule of Debt Securities Available For Sale

Debt securities available for sale at September 30, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2022
Debt securities:
U.S. government securities	$	2,172	$	—	$	2,172	$	—	$	(191)	$	1,981
States, municipalities and political subdivisions	2,455		—		2,455		1		(182)		2,274
U.S. corporate securities	9,923		—		9,923		13		(1,080)		8,856
Foreign securities	2,820		(9)		2,811		7		(324)		2,494
Residential mortgage-backed securities	859		—		859		—		(109)		750
Commercial mortgage-backed securities	1,203		—		1,203		—		(166)		1,037
Other asset-backed securities	2,791		—		2,791		5		(171)		2,625
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,248	$	(9)	$	22,239	$	26	$	(2,225)	$	20,040
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2022, debt securities with a fair value of $612 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $73 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

Schedule of Net Amortized Cost and Fair Value of Debt Securities by Contractual Maturity

The net amortized cost and fair value of debt securities at September 30, 2022 are shown below by contractual maturity. Actual maturities may differ from contractual maturities because securities may be restructured, called or prepaid, or the Company intends to sell a security prior to maturity.

In millions	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,299	$	1,288
One year through five years	6,704		6,260
After five years through ten years	4,980		4,347
Greater than ten years	4,403		3,733
Residential mortgage-backed securities	859		750
Commercial mortgage-backed securities	1,203		1,037
Other asset-backed securities	2,791		2,625
Total	$	22,239	$	20,040

Schedule of Debt Securities In An Unrealized Capital Loss Position

Summarized below are the debt securities the Company held at September 30, 2022 and December 31, 2021 that were in an unrealized capital loss position, aggregated by the length of time the investments have been in that position:

	Less than 12 months					Greater than 12 months					Total
In millions, except number of securities	Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses		Number of Securities	Fair Value		Unrealized Losses
September 30, 2022
Debt securities:
U.S. government securities	570	$	1,845	$	179	25	$	125	$	12	595	$	1,970	$	191
States, municipalities and political subdivisions	1,129	1,949		153		122	207		29		1,251	2,156		182
U.S. corporate securities	6,083	7,503		889		848	1,027		191		6,931	8,530		1,080
Foreign securities	1,443	2,005		246		254	383		78		1,697	2,388		324
Residential mortgage-backed securities	489	562		68		69	187		41		558	749		109
Commercial mortgage-backed securities	368	772		101		127	265		65		495	1,037		166
Other asset-backed securities	1,266	2,311		148		163	292		23		1,429	2,603		171
Redeemable preferred securities	14	20		2		1	3		—		15	23		2
Total debt securities	11,362	$	16,967	$	1,786	1,609	$	2,489	$	439	12,971	$	19,456	$	2,225
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2022 were as follows:

	Supporting experience-rated products				Supporting remaining products				Total
In millions	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Due to mature:
Less than one year	$	35	$	—	$	1,176	$	14	$	1,211	$	14
One year through five years	128		6		5,890		445		6,018		451
After five years through ten years	154		22		4,113		615		4,267		637
Greater than ten years	213		39		3,358		638		3,571		677
Residential mortgage-backed securities	11		1		738		108		749		109
Commercial mortgage-backed securities	32		3		1,005		163		1,037		166
Other asset-backed securities	17		2		2,586		169		2,603		171
Total	$	590	$	73	$	18,866	$	2,152	$	19,456	$	2,225

Schedule of Activity in Mortgage Loan Portfolio

During the three and nine months ended September 30, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
New mortgage loans	$	125	$	53	$	305	$	173
Mortgage loans fully repaid	62		88		136		260
Mortgage loans foreclosed	—		—		—		—

Schedule of Mortgage Loan Amortized Cost and Credit Quality Indicator

Based on the Company’s assessments at September 30, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
September 30, 2022
1	$	—	$	—	$	—	$	—	$	—	$	16	$	16
2 to 4	279		247		48		11		54		379		1,018
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	279	$	247	$	48	$	11	$	57	$	405	$	1,047
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Schedule of Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Debt securities	$	174	$	157	$	510	$	474
Mortgage loans	14		13		38		41
Other investments	134		109		279		307
Gross investment income	322		279		827		822
Investment expenses	(11)		(11)		(29)		(28)
Net investment income (excluding net realized capital gains or losses)	311		268		798		794
Net realized capital gains (losses) (1)	(110)		(22)		(283)		38
Net investment income (2)	$	201	$	246	$	515	$	832

_____________________________________________

(1)Net realized capital losses include credit-related losses on debt securities of $1 million and yield-related impairment losses on debt securities of $73 million in the three months ended September 30, 2022. Net realized capital losses include credit-related losses on debt securities of $17 million and yield-related impairment losses on debt securities of $121 million in the nine months ended September 30, 2022. Net realized capital losses include yield-related impairment losses on debt securities of $3 million in the three months ended September 30, 2021. Net realized capital gains are net of yield-related impairment losses on debt securities of $35 million in the nine months ended September 30, 2021. There were no credit-related losses on debt securities in the three and nine months ended September 30, 2021.

(2)Net investment income includes $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, and $9 million and $28 million for the three and nine months ended September 30, 2021, respectively, related to investments supporting experience-rated products.

Schedule of Proceeds and Related Gross Realized Capital Gains and Losses From the Sale of Debt Securities

Excluding amounts related to experience-rated products, proceeds from the sale of available-for-sale debt securities and the related gross realized capital gains and losses for the three and nine months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Proceeds from sales	$	593	$	668	$	3,556	$	2,935
Gross realized capital gains	3		19		20		61
Gross realized capital losses	28		2		135		12

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2022
Cash and cash equivalents (1)	$	10,118	$	7,086	$	—	$	17,204
Debt securities:
U.S. government securities	1,949		32		—		1,981
States, municipalities and political subdivisions	—		2,274		—		2,274
U.S. corporate securities	—		8,818		38		8,856
Foreign securities	—		2,486		8		2,494
Residential mortgage-backed securities	—		750		—		750
Commercial mortgage-backed securities	—		1,037		—		1,037
Other asset-backed securities	—		2,625		—		2,625
Redeemable preferred securities	—		23		—		23
Total debt securities	1,949		18,045		46		20,040
Equity securities	104		—		66		170
Total	$	12,171	$	25,131	$	112	$	37,414
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

_____________________________________________

(1)Includes cash and cash equivalents of $7 million which have been accounted for as assets held for sale and are included in assets held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Fair Value, by Balance Sheet Grouping

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2022
Assets:
Mortgage loans	$	1,047	$	—	$	—	$	982	$	982
Equity securities (1)	183		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	4		—		—		4		4
Without a fixed maturity	331		—		—		296		296
Long-term debt (2)	52,214		46,375		—		—		46,375
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

(2)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

Schedule of Fair Value of Separate Accounts by Major Category of Investment

Separate Accounts financial assets as of September 30, 2022 and December 31, 2021 were as follows:

	September 30, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	—	$	152	$	—	$	152	$	2	$	186	$	—	$	188
Debt securities	756		1,979		—		2,735		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		410		—		410		—		547		—		547
Total (1)	$	756	$	2,542	$	—	$	3,298	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $20 million and $70 million of other receivables at September 30, 2022 and December 31, 2021, respectively.

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Health Care Costs Payable (Tables)

9 Months Ended

Sep. 30, 2022

Health Care and Other Insurance Liabilities [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2022 and 2021:

	Nine Months Ended September 30,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	53,311		48,243
Prior years	(670)		(771)
Total incurred health care costs (1)	52,641		47,472
Less: Claims paid
Current year	43,632		39,887
Prior years	7,468		6,639
Total claims paid	51,100		46,526
Add: Premium deficiency reserve	5		1
Health care costs payable, end of the period, net	10,346		8,873
Add: Reinsurance recoverables	5		4
Health care costs payable, end of the period	$	10,351	$	8,877

_____________________________________________

(1)Total incurred health care costs for the nine months ended September 30, 2022 and 2021 in the table above exclude (i) $5 million and $1 million, respectively, for premium deficiency reserves related to the Company’s Medicaid products, (ii) $56 million and $45 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $274 million and $168 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Summary of Company's Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2022 and December 31, 2021:

In millions	September 30, 2022		December 31, 2021
Long-term debt
3.5% senior notes due July 2022	$	—	$	1,500
2.75% senior notes due November 2022	—		1,000
2.75% senior notes due December 2022	—		1,250
4.75% senior notes due December 2022	—		399
2.8% senior notes due June 2023	1,300		1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
3.25% senior notes due August 2029	1,750		1,750
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
Finance lease liabilities	1,437		1,300
Other	315		320
Total debt principal	52,726		56,743
Debt premiums	204		219
Debt discounts and deferred financing costs	(716)		(786)
	52,214		56,176
Less:
Current portion of long-term debt	(1,363)		(4,205)
Long-term debt	$	50,851	$	51,971

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which has been accounted for as liabilities held for sale and are included in liabilities held for sale on the unaudited condensed consolidated balance sheet at September 30, 2022. See Note 2 ‘‘Acquisition, Divestitures and Asset Sales’’ for additional information.

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Share repurchase programs

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of September 30, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2022

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,190)	$	977	$	778	$	1,214
Other comprehensive loss before reclassifications ($(796), $(73), $(3,306), $(346) pretax)	(711)		(61)		(2,809)		(297)
Amounts reclassified from accumulated other comprehensive income (loss) ($99, $(14), $253, $(15) pretax) (1)	88		(12)		218		(13)
Other comprehensive loss	(623)		(73)		(2,591)		(310)
End of period balance	(1,813)		904		(1,813)		904
Foreign currency translation adjustments:
Beginning of period balance	2		6		—		7
Other comprehensive loss before reclassifications	(7)		(5)		(5)		(6)
Other comprehensive loss	(7)		(5)		(5)		(6)
End of period balance	(5)		1		(5)		1
Net cash flow hedges:
Beginning of period balance	234		241		222		248
Other comprehensive income before reclassifications ($13, $0, $37, $0 pretax)	10		—		28		—
Amounts reclassified from accumulated other comprehensive income ($(2), $(20), $(10), $(29) pretax) (2)	(2)		(15)		(8)		(22)
Other comprehensive income (loss)	8		(15)		20		(22)
End of period balance	242		226		242		226
Pension and other postretirement benefits:
Beginning of period balance	(34)		(54)		(35)		(55)
Amounts reclassified from accumulated other comprehensive loss ($1, $0, $2, $1 pretax) (3)	1		—		2		1
Other comprehensive income	1		—		2		1
End of period balance	(33)		(54)		(33)		(54)
Total beginning of period accumulated other comprehensive income (loss)	(988)		1,170		965		1,414
Total other comprehensive loss	(621)		(93)		(2,574)		(337)
Total end of period accumulated other comprehensive income (loss)	$	(1,609)	$	1,077	$	(1,609)	$	1,077

_____________________________________________

(1)Amounts reclassified from accumulated other comprehensive income (loss) for specifically identified debt securities are included in net investment income in the unaudited condensed consolidated statements of operations.

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(3)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

The following is a reconciliation of basic and diluted earnings (loss) per share for the respective periods:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2022		2021		2022		2021
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	(3,416)	$	1,598	$	1,847	$	6,604
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,315		1,321		1,313		1,318
Restricted stock units and performance stock units	—		4		6		5
Stock options and stock appreciation rights	—		4		5		3
Weighted average shares, diluted	1,315		1,329		1,324		1,326
Earnings (loss) per share:
Basic	$	(2.60)	$	1.21	$	1.41	$	5.01
Diluted	$	(2.60)	$	1.20	$	1.40	$	4.98

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Summarized Financial Information Of Segments

The following is a reconciliation of financial measures of the Company’s segments to the consolidated totals:

In millions	Health Care Benefits		Pharmacy  Services (1)		Retail/ LTC		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2022
Revenues from external customers	$	22,387	$	40,545	$	17,994	$	32	$	—	$	80,958
Intersegment revenues	23		2,671		8,722		—		(11,416)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,511		43,216		26,706		142		(11,416)		81,159
Adjusted operating income (loss)	1,544		1,877		1,398		(417)		(169)		4,233
September 30, 2021
Revenues from external customers	$	20,311	$	36,851	$	16,347	$	39	$	—	$	73,548
Intersegment revenues	21		2,195		8,678		—		(10,894)		—
Net investment income (loss)	147		—		(33)		132		—		246
Total revenues	20,479		39,046		24,992		171		(10,894)		73,794
Adjusted operating income (loss)	1,106		1,773		1,723		(343)		(186)		4,073
Nine Months Ended
September 30, 2022
Revenues from external customers	$	68,029	$	116,600	$	53,380	$	97	$	—	$	238,106
Intersegment revenues	69		8,889		25,074		—		(34,032)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,376		125,489		78,410		378		(34,032)		238,621
Adjusted operating income (loss)	5,126		5,368		4,865		(1,277)		(556)		13,526
September 30, 2021
Revenues from external customers	$	60,993	$	105,909	$	47,672	$	101	$	—	$	214,675
Intersegment revenues	62		7,772		25,309		—		(33,143)		—
Net investment income	432		—		13		387		—		832
Total revenues	61,487		113,681		72,994		488		(33,143)		215,507
Adjusted operating income (loss)	4,502		5,035		5,166		(1,015)		(523)		13,165

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $2.9 billion and $2.8 billion of retail co-payments for the three months ended September 30, 2022 and 2021, respectively, and $9.8 billion and $9.0 billion of retail co-payments for the nine months ended September 30, 2022 and 2021, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Pharmacy Services segment, and/or the Retail/LTC segment. Intersegment adjusted operating income eliminations occur when members of Pharmacy Services Segment clients (“PSS members”) enrolled in Maintenance Choice® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail/LTC segments record the adjusted operating income on a stand-alone basis.

Reconciliation of Consolidated Operating Income to Adjusted Operating Income

The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2022		2021		2022		2021
Operating income (loss) (GAAP measure)	$	(3,931)	$	3,061	$	4,128	$	10,964
Amortization of intangible assets (1)	464		561		1,398		1,730
Opioid litigation charges (2)	5,220		—		5,704		—
Loss on assets held for sale (3)	2,480		—		2,521		—
Gain on divestiture of subsidiary (4)	—		—		(225)		—
Acquisition-related integration costs (5)	—		20		—		101
Goodwill impairment (6)	—		431		—		431
Acquisition purchase price adjustment outside of measurement period (7)	—		—		—		(61)
Adjusted operating income	$	4,233	$	4,073	$	13,526	$	13,165

_____________________________________________

(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 unaudited 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, 2022 the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and governmental entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(3)During the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the LTC reporting unit within the Retail/LTC segment. The Company continually evaluates its portfolio for nonstrategic assets. The Company determined that its LTC business was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. As of September 30, 2022, the LTC business met the criteria for held-for-sale accounting and the net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the third quarter of 2022. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which was included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded during the first quarter of 2022. The sale closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(4)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex, which the Company sold in June 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statement of operations within the Health Care Benefits segment.

(5)During the three and nine months ended September 30, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(6)During the three and nine months ended September 30, 2021, the goodwill impairment charge relates to an impairment of the remaining goodwill of the LTC reporting unit within the Retail/LTC segment.

(7)In June 2021, the Company received $61 million related to a purchase price working capital adjustment for an acquisition completed during the first quarter of 2020. The resolution of this matter occurred subsequent to the acquisition accounting measurement period and is reflected in the Company’s unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 as a reduction of operating expenses within the Health Care Benefits segment.

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Significant Accounting Policies - Narrative (Details) people in Millions, patient in Millions, $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 31, 2023 state	Sep. 30, 2022 USD ($) clinic patient people state store	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) clinic patient people state Segment store	Sep. 30, 2021 USD ($)	Dec. 31, 2023 state
Significant Accounting Policies [Line Items]
Number of pharmacy plan members | people		110		110
Number of patients served per year | patient		1		1
Number of reportable segments | Segment				4
Expenses from transactions with related party | $		$ 16	$ 16	$ 47	$ 35
Other revenues from transactions with related party | $		$ 22	$ 20	$ 66	$ 57
Heartland Healthcare Services
Significant Accounting Policies [Line Items]
Number of states in which entity operates		4		4
Retail/ LTC
Significant Accounting Policies [Line Items]
Number of retail locations (more than) | store		9,000		9,000
Number of walk in medical clinics | clinic		1,100		1,100
Health Care Benefits
Significant Accounting Policies [Line Items]
Number of people served | people		35		35
Number of states in which the Company has entered the individual public health insurance exchange				8
Health Care Benefits | Forecast
Significant Accounting Policies [Line Items]
Number of states in which the Company has entered the individual public health insurance exchange						12
Additional number of states in which the Company will enter the individual public health insurance exchange	4

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Significant Accounting Policies - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Cash and cash equivalents	$ 17,197	$ 9,408	$ 9,826
Restricted cash (included in other current assets)	151	3,065	2,996
Restricted cash (included in other assets)	215	218	218
Total cash, cash equivalents and restricted cash in the statements of cash flows	$ 17,563	$ 12,691	$ 13,040	$ 11,043

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Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade receivables	$ 8,016	$ 7,932
Vendor and manufacturer receivables	13,534	10,573
Premium receivables	2,368	2,537
Other receivables	2,647	3,389
Total accounts receivable, net	26,565	24,431
Allowance for credit losses	344	$ 339
Disposal Group, Held-for-sale, Not Discontinued Operations
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable, net	$ 248

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Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 80,958	$ 73,548	$ 238,106	$ 214,675
Net investment income (loss)	201	246	515	832
Total revenues	81,159	73,794	238,621	215,507
Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	52,375	47,033	151,191	135,917
Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,581	5,359	16,630	15,255
Premiums
Disaggregation of Revenue [Line Items]
Revenues	21,003	18,984	63,894	56,927
Other
Disaggregation of Revenue [Line Items]
Revenues	1,999	2,172	6,391	6,576
Health Care Benefits
Disaggregation of Revenue [Line Items]
Total revenues	22,511	20,479	68,376	61,487
Pharmacy Services
Disaggregation of Revenue [Line Items]
Total revenues	43,216	39,046	125,489	113,681
Retail/ LTC
Disaggregation of Revenue [Line Items]
Total revenues	26,706	24,992	78,410	72,994
Operating Segments | Health Care Benefits
Disaggregation of Revenue [Line Items]
Revenues	22,387	20,311	68,029	60,993
Net investment income (loss)	101	147	278	432
Total revenues	22,511	20,479	68,376	61,487
Operating Segments | Health Care Benefits | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Care Benefits | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Care Benefits | Premiums
Disaggregation of Revenue [Line Items]
Revenues	20,989	18,959	63,848	56,869
Operating Segments | Health Care Benefits | Other
Disaggregation of Revenue [Line Items]
Revenues	1,421	1,373	4,250	4,186
Operating Segments | Pharmacy Services
Disaggregation of Revenue [Line Items]
Revenues	40,545	36,851	116,600	105,909
Net investment income (loss)	0	0	0	0
Total revenues	43,216	39,046	125,489	113,681
Operating Segments | Pharmacy Services | Pharmacy network
Disaggregation of Revenue [Line Items]
Total revenues	25,012	23,665	72,373	68,476
Operating Segments | Pharmacy Services | Mail choice
Disaggregation of Revenue [Line Items]
Total revenues	17,935	15,202	52,339	44,685
Operating Segments | Pharmacy Services | Other
Disaggregation of Revenue [Line Items]
Total revenues	269	179	777	520
Operating Segments | Pharmacy Services | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	42,947	38,867	124,712	113,161
Operating Segments | Pharmacy Services | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Pharmacy Services | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Pharmacy Services | Other
Disaggregation of Revenue [Line Items]
Revenues	269	179	777	520
Operating Segments | Retail/ LTC
Disaggregation of Revenue [Line Items]
Revenues	17,994	16,347	53,380	47,672
Net investment income (loss)	(10)	(33)	(44)	13
Total revenues	26,706	24,992	78,410	72,994
Operating Segments | Retail/ LTC | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	20,759	19,023	60,308	55,781
Operating Segments | Retail/ LTC | Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,581	5,359	16,630	15,255
Operating Segments | Retail/ LTC | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Retail/ LTC | Other
Disaggregation of Revenue [Line Items]
Revenues	376	643	1,516	1,945
Corporate/ Other
Disaggregation of Revenue [Line Items]
Revenues	32	39	97	101
Net investment income (loss)	110	132	281	387
Total revenues	142	171	378	488
Corporate/ Other | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate/ Other | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate/ Other | Premiums
Disaggregation of Revenue [Line Items]
Revenues	14	25	46	58
Corporate/ Other | Other
Disaggregation of Revenue [Line Items]
Revenues	18	14	51	43
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Net investment income (loss)	0	0	0	0
Total revenues	(11,416)	(10,894)	(34,032)	(33,143)
Intersegment Eliminations | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	(11,331)	(10,857)	(33,829)	(33,025)
Intersegment Eliminations | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Intersegment Eliminations | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Intersegment Eliminations | Other
Disaggregation of Revenue [Line Items]
Revenues	$ (85)	$ (37)	$ (203)	$ (118)

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Significant Accounting Policies - Receivables and Contracted Balances (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Trade receivables (included in accounts receivable, net)	$ 8,016	$ 7,932
Contract liabilities (included in accrued expenses)	$ 74	$ 87	$ 78	$ 71

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Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Change in Contract with Customer, Liability [Roll Forward]
Contract liabilities, beginning of the period	$ 87	$ 71
Rewards earnings and gift card issuances	250	286
Redemption and breakage	(263)	(279)
Contract liabilities, end of the period	$ 74	$ 78

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Significant Accounting Policies - New Accounting Pronouncements Not Yet Adopted (Details) $ in Billions	Jan. 01, 2023 USD ($)
Accounting Standards Update 2018-12 | Forecast | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to liability for future policy benefits	$ 1

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Acquisition, Divestitures and Asset Sales - Narrative (Details) $ / shares in Units, member in Thousands, $ in Millions		1 Months Ended	3 Months Ended			9 Months Ended
	Sep. 02, 2022 USD ($) $ / shares	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($) member	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	May 31, 2022 member
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on assets held for sale			$ 2,480		$ 0	$ 2,521	$ 0
Gain (loss) on divestiture, pretax			0		$ 0	225	$ 0
Signify Health, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash to be received by shareholders in proposed acquisition (in dollars per share) | $ / shares	$ 30.50
Total value of proposed acquisition	$ 8,000
Termination fee	380
Signify Health, Inc. | Signify Health, Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Termination fee	$ 228
Disposal Group, Held-for-sale, Not Discontinued Operations | Omnicare Long-Term Care Business | Retail/ LTC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on assets held for sale			$ 2,500			2,500
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Payflex | Health Care Benefits
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of subsidiary		$ 775
Gain (loss) on divestiture, pretax						225
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Thailand Business | Health Care Benefits
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on assets held for sale				$ 41		$ 41
Number of medical members | member				266
Disposal Group, Disposed of by Sale, Not Discontinued Operations | International Health Care Renewal Rights
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of international health care members, renewal rights sold | member								200
Member migration period								16 months

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Acquisition, Divestitures and Asset Sales - Summary of Assets and Liabilities Held for Sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations $ in Millions	Sep. 30, 2022 USD ($)
Assets:
Accounts receivable, net	$ 248
Inventories	201
Property and equipment, net	254
Goodwill	475
Deferred income taxes	130
Other	190
Total assets held for sale	1,498
Liabilities:
Accounts payable	98
Accrued expenses	94
Other	104
Total liabilities held for sale	296
bswift LLC
Assets:
Goodwill	$ 475

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Investments - Total Investment Schedule (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Total Investments [Line Items]
Current	$ 2,792	$ 3,117
Long-term	20,583	23,025
Total	23,375	26,142
Disposal Group, Held-for-sale, Not Discontinued Operations
Total Investments [Line Items]
Long-term	18
Debt securities available for sale
Total Investments [Line Items]
Current	2,729	3,009
Long-term	17,311	20,231
Total	20,040	23,240
Mortgage loans
Total Investments [Line Items]
Current	58	58
Long-term	989	844
Total	1,047	902
Other investments
Total Investments [Line Items]
Current	5	50
Long-term	2,283	1,950
Total	$ 2,288	$ 2,000

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Investments - Debt Securities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	$ 22,248	$ 22,174
Allowance for Credit Losses	(9)	0
Net Amortized Cost	22,239	22,174
Gross Unrealized Gains	26	1,172
Gross Unrealized Losses	(2,225)	(106)
Fair Value	20,040	23,240
Supporting experience-rated products
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Gains	2	94
Gross Unrealized Losses	(73)	(2)
Fair Value	612	864
U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,172	2,349
Allowance for Credit Losses	0	0
Net Amortized Cost	2,172	2,349
Gross Unrealized Gains	0	70
Gross Unrealized Losses	(191)	(3)
Fair Value	1,981	2,416
States, municipalities and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,455	2,947
Allowance for Credit Losses	0	0
Net Amortized Cost	2,455	2,947
Gross Unrealized Gains	1	148
Gross Unrealized Losses	(182)	(4)
Fair Value	2,274	3,091
U.S. corporate securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	9,923	9,093
Allowance for Credit Losses	0	0
Net Amortized Cost	9,923	9,093
Gross Unrealized Gains	13	682
Gross Unrealized Losses	(1,080)	(40)
Fair Value	8,856	9,735
Foreign securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,820	2,821
Allowance for Credit Losses	(9)	0
Net Amortized Cost	2,811	2,821
Gross Unrealized Gains	7	196
Gross Unrealized Losses	(324)	(24)
Fair Value	2,494	2,993
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	859	870
Allowance for Credit Losses	0	0
Net Amortized Cost	859	870
Gross Unrealized Gains	0	15
Gross Unrealized Losses	(109)	(10)
Fair Value	750	875
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	1,203	1,278
Allowance for Credit Losses	0	0
Net Amortized Cost	1,203	1,278
Gross Unrealized Gains	0	44
Gross Unrealized Losses	(166)	(12)
Fair Value	1,037	1,310
Other asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,791	2,791
Allowance for Credit Losses	0	0
Net Amortized Cost	2,791	2,791
Gross Unrealized Gains	5	14
Gross Unrealized Losses	(171)	(13)
Fair Value	2,625	2,792
Redeemable preferred securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	25	25
Allowance for Credit Losses	0	0
Net Amortized Cost	25	25
Gross Unrealized Gains	0	3
Gross Unrealized Losses	(2)	0
Fair Value	$ 23	$ 28

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Investments - Debt Securities by Maturity (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Net Amortized Cost
Less than one year	$ 1,299
One year through five years	6,704
After five years through ten years	4,980
Greater than ten years	4,403
Net Amortized Cost	22,239	$ 22,174
Fair Value
Less than one year	1,288
One year through five years	6,260
After five years through ten years	4,347
Greater than ten years	3,733
Total	20,040	23,240
Residential mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	859
Net Amortized Cost	859	870
Fair Value
Debt securities, maturity, without single maturity date	750
Total	750	875
Commercial mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	1,203
Net Amortized Cost	1,203	1,278
Fair Value
Debt securities, maturity, without single maturity date	1,037
Total	1,037	1,310
Other asset-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	2,791
Net Amortized Cost	2,791	2,791
Fair Value
Debt securities, maturity, without single maturity date	2,625
Total	$ 2,625	$ 2,792

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Investments - Unrealized Loss Position (Details) $ in Millions	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Number of Securities
Number of Securities, Less than 12 months | security	11,362	3,700
Number of Securities, Greater than 12 months | security	1,609	317
Number of Securities | security	12,971	4,017
Fair Value
Fair Value, Less than 12 months	$ 16,967	$ 6,800
Fair Value, Greater than 12 months	2,489	584
Fair Value	19,456	7,384
Unrealized Losses
Unrealized Losses, Less than 12 months	1,786	84
Unrealized Losses, Greater than 12 months	439	22
Unrealized Losses	$ 2,225	$ 106
U.S. government securities
Number of Securities
Number of Securities, Less than 12 months | security	570	43
Number of Securities, Greater than 12 months | security	25	10
Number of Securities | security	595	53
Fair Value
Fair Value, Less than 12 months	$ 1,845	$ 242
Fair Value, Greater than 12 months	125	40
Fair Value	1,970	282
Unrealized Losses
Unrealized Losses, Less than 12 months	179	2
Unrealized Losses, Greater than 12 months	12	1
Unrealized Losses	$ 191	$ 3
States, municipalities and political subdivisions
Number of Securities
Number of Securities, Less than 12 months | security	1,129	233
Number of Securities, Greater than 12 months | security	122	13
Number of Securities | security	1,251	246
Fair Value
Fair Value, Less than 12 months	$ 1,949	$ 428
Fair Value, Greater than 12 months	207	33
Fair Value	2,156	461
Unrealized Losses
Unrealized Losses, Less than 12 months	153	3
Unrealized Losses, Greater than 12 months	29	1
Unrealized Losses	$ 182	$ 4
U.S. corporate securities
Number of Securities
Number of Securities, Less than 12 months | security	6,083	1,610
Number of Securities, Greater than 12 months | security	848	165
Number of Securities | security	6,931	1,775
Fair Value
Fair Value, Less than 12 months	$ 7,503	$ 2,296
Fair Value, Greater than 12 months	1,027	238
Fair Value	8,530	2,534
Unrealized Losses
Unrealized Losses, Less than 12 months	889	31
Unrealized Losses, Greater than 12 months	191	9
Unrealized Losses	$ 1,080	$ 40
Foreign securities
Number of Securities
Number of Securities, Less than 12 months | security	1,443	449
Number of Securities, Greater than 12 months | security	254	57
Number of Securities | security	1,697	506
Fair Value
Fair Value, Less than 12 months	$ 2,005	$ 747
Fair Value, Greater than 12 months	383	91
Fair Value	2,388	838
Unrealized Losses
Unrealized Losses, Less than 12 months	246	20
Unrealized Losses, Greater than 12 months	78	4
Unrealized Losses	$ 324	$ 24
Residential mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	489	165
Number of Securities, Greater than 12 months | security	69	10
Number of Securities | security	558	175
Fair Value
Fair Value, Less than 12 months	$ 562	$ 593
Fair Value, Greater than 12 months	187	36
Fair Value	749	629
Unrealized Losses
Unrealized Losses, Less than 12 months	68	9
Unrealized Losses, Greater than 12 months	41	1
Unrealized Losses	$ 109	$ 10
Commercial mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	368	188
Number of Securities, Greater than 12 months | security	127	35
Number of Securities | security	495	223
Fair Value
Fair Value, Less than 12 months	$ 772	$ 462
Fair Value, Greater than 12 months	265	112
Fair Value	1,037	574
Unrealized Losses
Unrealized Losses, Less than 12 months	101	7
Unrealized Losses, Greater than 12 months	65	5
Unrealized Losses	$ 166	$ 12
Other asset-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	1,266	1,011
Number of Securities, Greater than 12 months | security	163	26
Number of Securities | security	1,429	1,037
Fair Value
Fair Value, Less than 12 months	$ 2,311	$ 2,030
Fair Value, Greater than 12 months	292	31
Fair Value	2,603	2,061
Unrealized Losses
Unrealized Losses, Less than 12 months	148	12
Unrealized Losses, Greater than 12 months	23	1
Unrealized Losses	$ 171	$ 13
Redeemable preferred securities
Number of Securities
Number of Securities, Less than 12 months | security	14	1
Number of Securities, Greater than 12 months | security	1	1
Number of Securities | security	15	2
Fair Value
Fair Value, Less than 12 months	$ 20	$ 2
Fair Value, Greater than 12 months	3	3
Fair Value	23	5
Unrealized Losses
Unrealized Losses, Less than 12 months	2	0
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 2	$ 0

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Investments - Unrealized Loss Position Maturities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Fair Value
Less than one year	$ 1,211
One year through five years	6,018
After five years through ten years	4,267
Greater than ten years	3,571
Fair Value	19,456	$ 7,384
Unrealized Losses
Less than one year	14
One year through five years	451
After five years through ten years	637
Greater than ten years	677
Unrealized Losses	2,225	106
Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	749
Fair Value	749	629
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	109
Unrealized Losses	109	10
Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	1,037
Fair Value	1,037	574
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	166
Unrealized Losses	166	12
Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,603
Fair Value	2,603	2,061
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	171
Unrealized Losses	171	$ 13
Supporting experience-rated products
Fair Value
Less than one year	35
One year through five years	128
After five years through ten years	154
Greater than ten years	213
Fair Value	590
Unrealized Losses
Less than one year	0
One year through five years	6
After five years through ten years	22
Greater than ten years	39
Unrealized Losses	73
Supporting experience-rated products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	11
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	1
Supporting experience-rated products | Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	32
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	3
Supporting experience-rated products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	17
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	2
Supporting remaining products
Fair Value
Less than one year	1,176
One year through five years	5,890
After five years through ten years	4,113
Greater than ten years	3,358
Fair Value	18,866
Unrealized Losses
Less than one year	14
One year through five years	445
After five years through ten years	615
Greater than ten years	638
Unrealized Losses	2,152
Supporting remaining products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	738
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	108
Supporting remaining products | Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	1,005
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	163
Supporting remaining products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,586
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	$ 169

XML

Investments - Mortgage Loans (Details) - Commercial Real Estate - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Mortgage Loans on Real Estate [Line Items]
New mortgage loans	$ 125	$ 53	$ 305	$ 173
Mortgage loans fully repaid	62	88	136	260
Mortgage loans foreclosed	$ 0	$ 0	$ 0	$ 0

XML

Investments - Mortgage Loans Credit Ratings Indicator (Details) - Commercial Real Estate - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 1,047	$ 902
1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	16	28
2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	1,018	861
5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	13	13
7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2022
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	279
2022 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2022 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	279
2022 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2022 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2021
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	247	255
2021 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2021 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	247	255
2021 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2021 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	48	48
2020 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	48	48
2020 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	11	40
2019 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	11	40
2019 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2018
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	57	75
2018 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2018 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	54	72
2018 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	3	3
2018 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
Prior
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	405	484
Prior | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	16	28
Prior | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	379	446
Prior | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	10	10
Prior | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 0	$ 0

XML

Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 322	$ 279	$ 827	$ 822
Investment expenses	(11)	(11)	(29)	(28)
Net investment income (excluding net realized capital gains or losses)	311	268	798	794
Net realized capital gains (losses)	(110)	(22)	(283)	38
Net investment income	201	246	515	832
Credit-related impairment loss	1	0	17	0
Yield-related impairment loss	73	3	121	35
Supporting experience-rated products
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income	8	9	26	28
Debt securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	174	157	510	474
Mortgage loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	14	13	38	41
Other investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 134	$ 109	$ 279	$ 307

XML

Investments - Realized Gains (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Investments [Abstract]
Proceeds from sales	$ 593	$ 668	$ 3,556	$ 2,935
Gross realized capital gains	3	19	20	61
Gross realized capital losses	$ 28	$ 2	$ 135	$ 12

XML

Fair Value - Measurement on a Recurring Basis (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 20,040	$ 23,240
U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,981	2,416
States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,274	3,091
U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8,856	9,735
Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,494	2,993
Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	750	875
Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,037	1,310
Other asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,625	2,792
Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	23	28
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities measured at fair value on a recurring basis	0	0
Cash and cash equivalents	17,204	9,408
Debt securities	20,040	23,240
Equity securities	170	169
Total	37,414	32,817
Recurring | Disposal Group, Held-for-sale, Not Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	7
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	10,118	4,954
Debt securities	1,949	2,372
Equity securities	104	114
Total	12,171	7,440
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	7,086	4,454
Debt securities	18,045	20,812
Equity securities	0	0
Total	25,131	25,266
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Debt securities	46	56
Equity securities	66	55
Total	112	111
Recurring | U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,981	2,416
Recurring | U.S. government securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,949	2,372
Recurring | U.S. government securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	32	44
Recurring | U.S. government securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,274	3,091
Recurring | States, municipalities and political subdivisions | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | States, municipalities and political subdivisions | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,274	3,086
Recurring | States, municipalities and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	5
Recurring | U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8,856	9,735
Recurring | U.S. corporate securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | U.S. corporate securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8,818	9,697
Recurring | U.S. corporate securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	38	38
Recurring | Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,494	2,993
Recurring | Foreign securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Foreign securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,486	2,983
Recurring | Foreign securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8	10
Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	750	875
Recurring | Residential mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Residential mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	750	875
Recurring | Residential mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,037	1,310
Recurring | Commercial mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Commercial mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,037	1,310
Recurring | Commercial mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Other asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,625	2,792
Recurring | Other asset-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Other asset-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,625	2,789
Recurring | Other asset-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	3
Recurring | Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	23	28
Recurring | Redeemable preferred securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Redeemable preferred securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	23	28
Recurring | Redeemable preferred securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 0	$ 0

XML

Fair Value - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Fair Value Disclosures [Abstract]
Transfers out of Level 3	$ 0	$ 0	$ 29	$ 0
Transfers into Level 3	$ 0	$ 0		$ 0

XML

Fair Value - Carrying Value and Fair Value Classified by Level (Details) - Nonrecurring - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Carrying Value
Assets:
Mortgage loans	$ 1,047	$ 902
Equity securities	183	126
Liabilities:
Investment contracts liabilities with a fixed maturity	4	5
Investment contracts liabilities without a fixed maturity	331	336
Long-term debt	52,214	56,176
Carrying Value | Disposal Group, Held-for-sale, Not Discontinued Operations
Liabilities:
Long-term debt	3
Estimated Fair Value
Assets:
Mortgage loans	982	907
Liabilities:
Investment contracts liabilities with a fixed maturity	4	5
Investment contracts liabilities without a fixed maturity	296	373
Long-term debt	46,375	64,157
Level 1 | Estimated Fair Value
Assets:
Mortgage loans	0	0
Liabilities:
Investment contracts liabilities with a fixed maturity	0	0
Investment contracts liabilities without a fixed maturity	0	0
Long-term debt	46,375	64,157
Level 2 | Estimated Fair Value
Assets:
Mortgage loans	0	0
Liabilities:
Investment contracts liabilities with a fixed maturity	0	0
Investment contracts liabilities without a fixed maturity	0	0
Long-term debt	0	0
Level 3 | Estimated Fair Value
Assets:
Mortgage loans	982	907
Liabilities:
Investment contracts liabilities with a fixed maturity	4	5
Investment contracts liabilities without a fixed maturity	296	373
Long-term debt	$ 0	$ 0

XML

Fair Value - Separate Accounts Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 3,318	$ 5,087
Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3,298	5,017
Recurring | Other Receivables
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	20	70
Recurring | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	152	188
Recurring | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,735	4,281
Recurring | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1	1
Recurring | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	410	547
Recurring | Level 1
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	756	1,235
Recurring | Level 1 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	2
Recurring | Level 1 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	756	1,233
Recurring | Level 1 | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 1 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 2
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,542	3,782
Recurring | Level 2 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	152	186
Recurring | Level 2 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,979	3,048
Recurring | Level 2 | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1	1
Recurring | Level 2 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	410	547
Recurring | Level 3
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 3 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 3 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 3 | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
Recurring | Level 3 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 0	$ 0

XML

Health Care Costs Payable - Components of Change in Health Care Costs Payable (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period	$ 8,808
Less: Claims paid
Health care costs payable, end of the period	10,351
Health Care Benefits
Less: Claims paid
Benefit costs recorded in other insurance liabilities	56	$ 45
Corporate / Other
Less: Claims paid
Benefit costs recorded in other insurance liabilities	274	168
Health Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period	8,808	7,936
Less: Reinsurance recoverables	8	10
Health care costs payable, beginning of the period, net	8,800	7,926
Add: Components of incurred health care costs
Current year	53,311	48,243
Prior years	(670)	(771)
Total incurred health care costs	52,641	47,472
Less: Claims paid
Current year	43,632	39,887
Prior years	7,468	6,639
Total claims paid	51,100	46,526
Add: Premium deficiency reserve	5	1
Health care costs payable, end of the period, net	10,346	8,873
Add: Reinsurance recoverables	5	4
Health care costs payable, end of the period	10,351	8,877
Premium deficiency reserve	$ 5	$ 1

XML

Health Care Costs Payable - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred but not reported (IBNR) claims liability, net	$ 7,900
Health Insurance Product Line
Liability for Claims and Claims Adjustment Expense [Line Items]
Decrease in prior years' healthcare costs payable	$ 670	$ 771

XML

Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Millions	Sep. 30, 2022	Aug. 31, 2022	May 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Finance lease liabilities	$ 1,437			$ 1,300
Total debt principal	52,726			56,743
Debt premiums	204			219
Debt discounts and deferred financing costs	(716)			(786)
Long-term debt and lease obligation	52,214			56,176
Current portion of long-term debt	(1,363)			(4,205)
Long-term debt	$ 50,851			$ 51,971
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Long-term debt			Long-term debt
Senior Notes | 3.5% senior notes due July 2022
Debt Instrument [Line Items]
Debt interest rate	3.50%		3.50%
Long-term debt	$ 0			$ 1,500
Senior Notes | 2.75% senior notes due November 2022
Debt Instrument [Line Items]
Debt interest rate	2.75%	2.75%
Long-term debt	$ 0			1,000
Senior Notes | 2.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate	2.75%
Long-term debt	$ 0			1,250
Senior Notes | 4.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate	4.75%
Long-term debt	$ 0			399
Senior Notes | 2.8% senior notes due June 2023
Debt Instrument [Line Items]
Debt interest rate	2.80%
Long-term debt	$ 1,300			1,300
Senior Notes | 4% senior notes due December 2023
Debt Instrument [Line Items]
Debt interest rate	4.00%
Long-term debt	$ 414			414
Senior Notes | 3.375% senior notes due August 2024
Debt Instrument [Line Items]
Debt interest rate	3.375%
Long-term debt	$ 650			650
Senior Notes | 2.625% senior notes due August 2024
Debt Instrument [Line Items]
Debt interest rate	2.625%
Long-term debt	$ 1,000			1,000
Senior Notes | 3.5% senior notes due November 2024
Debt Instrument [Line Items]
Debt interest rate	3.50%
Long-term debt	$ 750			750
Senior Notes | 5% senior notes due December 2024
Debt Instrument [Line Items]
Debt interest rate	5.00%
Long-term debt	$ 299			299
Senior Notes | 5% senior notes due December 2024 | Disposal Group, Held-for-sale, Not Discontinued Operations
Debt Instrument [Line Items]
Long-term debt	$ 3
Senior Notes | 4.1% senior notes due March 2025
Debt Instrument [Line Items]
Debt interest rate	4.10%
Long-term debt	$ 950			950
Senior Notes | 3.875% senior notes due July 2025
Debt Instrument [Line Items]
Debt interest rate	3.875%
Long-term debt	$ 2,828			2,828
Senior Notes | 2.875% senior notes due June 2026
Debt Instrument [Line Items]
Debt interest rate	2.875%
Long-term debt	$ 1,750			1,750
Senior Notes | 3% senior notes due August 2026
Debt Instrument [Line Items]
Debt interest rate	3.00%
Long-term debt	$ 750			750
Senior Notes | 3.625% senior notes due April 2027
Debt Instrument [Line Items]
Debt interest rate	3.625%
Long-term debt	$ 750			750
Senior Notes | 6.25% senior notes due June 2027
Debt Instrument [Line Items]
Debt interest rate	6.25%
Long-term debt	$ 372			372
Senior Notes | 1.3% senior notes due August 2027
Debt Instrument [Line Items]
Debt interest rate	1.30%
Long-term debt	$ 2,250			2,250
Senior Notes | 4.3% senior notes due March 2028
Debt Instrument [Line Items]
Debt interest rate	4.30%
Long-term debt	$ 5,000			5,000
Senior Notes | 3.25% senior notes due August 2029
Debt Instrument [Line Items]
Debt interest rate	3.25%
Long-term debt	$ 1,750			1,750
Senior Notes | 3.75% senior notes due April 2030
Debt Instrument [Line Items]
Debt interest rate	3.75%
Long-term debt	$ 1,500			1,500
Senior Notes | 1.75% senior notes due August 2030
Debt Instrument [Line Items]
Debt interest rate	1.75%
Long-term debt	$ 1,250			1,250
Senior Notes | 1.875% senior notes due February 2031
Debt Instrument [Line Items]
Debt interest rate	1.875%
Long-term debt	$ 1,250			1,250
Senior Notes | 2.125% senior notes due September 2031
Debt Instrument [Line Items]
Debt interest rate	2.125%
Long-term debt	$ 1,000			1,000
Senior Notes | 4.875% senior notes due July 2035
Debt Instrument [Line Items]
Debt interest rate	4.875%
Long-term debt	$ 652			652
Senior Notes | 6.625% senior notes due June 2036
Debt Instrument [Line Items]
Debt interest rate	6.625%
Long-term debt	$ 771			771
Senior Notes | 6.75% senior notes due December 2037
Debt Instrument [Line Items]
Debt interest rate	6.75%
Long-term debt	$ 533			533
Senior Notes | 4.78% senior notes due March 2038
Debt Instrument [Line Items]
Debt interest rate	4.78%
Long-term debt	$ 5,000			5,000
Senior Notes | 6.125% senior notes due September 2039
Debt Instrument [Line Items]
Debt interest rate	6.125%
Long-term debt	$ 447			447
Senior Notes | 4.125% senior notes due April 2040
Debt Instrument [Line Items]
Debt interest rate	4.125%
Long-term debt	$ 1,000			1,000
Senior Notes | 2.7% senior notes due August 2040
Debt Instrument [Line Items]
Debt interest rate	2.70%
Long-term debt	$ 1,250			1,250
Senior Notes | 5.75% senior notes due May 2041
Debt Instrument [Line Items]
Debt interest rate	5.75%
Long-term debt	$ 133			133
Senior Notes | 4.5% senior notes due May 2042
Debt Instrument [Line Items]
Debt interest rate	4.50%
Long-term debt	$ 500			500
Senior Notes | 4.125% senior notes due November 2042
Debt Instrument [Line Items]
Debt interest rate	4.125%
Long-term debt	$ 500			500
Senior Notes | 5.3% senior notes due December 2043
Debt Instrument [Line Items]
Debt interest rate	5.30%
Long-term debt	$ 750			750
Senior Notes | 4.75% senior notes due March 2044
Debt Instrument [Line Items]
Debt interest rate	4.75%
Long-term debt	$ 375			375
Senior Notes | 5.125% senior notes due July 2045
Debt Instrument [Line Items]
Debt interest rate	5.125%
Long-term debt	$ 3,500			3,500
Senior Notes | 3.875% senior notes due August 2047
Debt Instrument [Line Items]
Debt interest rate	3.875%
Long-term debt	$ 1,000			1,000
Senior Notes | 5.05% senior notes due March 2048
Debt Instrument [Line Items]
Debt interest rate	5.05%
Long-term debt	$ 8,000			8,000
Senior Notes | 4.25% senior notes due April 2050
Debt Instrument [Line Items]
Debt interest rate	4.25%
Long-term debt	$ 750			750
Other Debt Obligations
Debt Instrument [Line Items]
Long-term debt	$ 315			$ 320

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Borrowings - Narrative (Details) - USD ($) $ in Millions	1 Months Ended			9 Months Ended
	Sep. 30, 2022	Aug. 31, 2022	May 31, 2022	Sep. 30, 2022	Sep. 30, 2021
Debt Instrument [Line Items]
Redeemed principal amount				$ 4,195	$ 7,823
Senior Notes | 3.5% senior notes due July 2022
Debt Instrument [Line Items]
Debt interest rate	3.50%		3.50%	3.50%
Redeemed principal amount			$ 1,500
Senior Notes | 2.75% senior notes due November 2022
Debt Instrument [Line Items]
Debt interest rate	2.75%	2.75%		2.75%
Redeemed principal amount		$ 1,000
Senior Notes | 2.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate	2.75%			2.75%
Redeemed principal amount	$ 1,250
Senior Notes | 4.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate	4.75%			4.75%
Redeemed principal amount	$ 399

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Shareholders' Equity - Share Repurchases (Details) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Dec. 09, 2021
Equity, Class of Treasury Stock [Line Items]
Stock repurchased during period (in shares)		0
2021 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount			$ 10,000,000,000.0
Stock repurchase program, remaining authorized repurchase amount	$ 8,000,000,000.0
Stock repurchased during period (in shares)	19,100,000
Stock repurchased during period, value	$ 2,000,000,000

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Shareholders' Equity - Accelerated Share Repurchases (Details) - 2021 ASR - Barclays Bank - USD ($) $ / shares in Units, shares in Millions, $ in Billions	Jan. 04, 2022	Feb. 28, 2022
Equity, Class of Treasury Stock [Line Items]
ASR agreement, amount	$ 1.5	$ 1.5
Payments for ASR, amount	$ 1.5
ASR percent of notional amount received in shares	80.00%
Shares repurchased under ASR agreement (in shares)	11.6	2.7
Share price (in dollars per share)	$ 103.34
Transfer of shares to treasury stock value	$ 1.2
ASR, shares to be received at the end of program as a percent of notional amount		20.00%
Forward contract
Equity, Class of Treasury Stock [Line Items]
Forward contract, notional amount	$ 0.3

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Shareholders' Equity - Dividends (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Equity [Abstract]
Dividends declared per share (in dollars per share)	$ 0.55	$ 0.50	$ 1.65	$ 1.50

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Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	$ 75,506	$ 74,140	$ 75,381	$ 73,565	$ 71,164	$ 69,701	$ 75,381	$ 69,701
Other comprehensive loss	(621)	(798)	(1,155)	(93)	148	(392)	(2,574)	(337)
Balance at end of period	71,011	75,506	74,140	74,618	73,565	71,164	71,011	74,618
Net unrealized investment gains (losses)
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(1,190)		778	977		1,214	778	1,214
Other comprehensive income (loss) before reclassifications, net of tax	(711)			(61)			(2,809)	(297)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	88			(12)			218	(13)
Other comprehensive loss	(623)			(73)			(2,591)	(310)
Balance at end of period	(1,813)	(1,190)		904	977		(1,813)	904
OCI before reclassifications, pre-tax	(796)			(73)			(3,306)	(346)
Amounts reclassified, pre-tax	99			(14)			253	(15)
Foreign currency translation adjustments
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	2		0	6		7	0	7
Other comprehensive income (loss) before reclassifications, net of tax	(7)			(5)			(5)	(6)
Other comprehensive loss	(7)			(5)			(5)	(6)
Balance at end of period	(5)	2		1	6		(5)	1
Net cash flow hedges
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	234		222	241		248	222	248
Other comprehensive income (loss) before reclassifications, net of tax	10			0			28	0
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	(2)			(15)			(8)	(22)
Other comprehensive loss	8			(15)			20	(22)
Balance at end of period	242	234		226	241		242	226
OCI before reclassifications, pre-tax	13			0			37	0
Amounts reclassified, pre-tax	(2)			(20)			(10)	(29)
Amount expected to be reclassified	11						11
Pension and other postretirement benefits
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(34)		(35)	(54)		(55)	(35)	(55)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	1			0			2	1
Other comprehensive loss	1			0			2	1
Balance at end of period	(33)	(34)		(54)	(54)		(33)	(54)
Amounts reclassified, pre-tax	1			0			2	1
AOCI Including Portion Attributable to Noncontrolling Interest
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(988)		$ 965	1,170		$ 1,414	965	1,414
Balance at end of period	$ (1,609)	$ (988)		$ 1,077	$ 1,170		$ (1,609)	$ 1,077

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Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	8
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$ (3,416)	$ 1,598	$ 1,847	$ 6,604
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic (in shares)	1,315	1,321	1,313	1,318
Weighted average diluted shares outstanding (in shares)	1,315	1,329	1,324	1,326
Earnings (loss) per share:
Earnings (loss) per share, basic (in dollars per share)	$ (2.60)	$ 1.21	$ 1.41	$ 5.01
Earnings (loss) per share, diluted (in dollars per share)	$ (2.60)	$ 1.20	$ 1.40	$ 4.98
Restricted stock units and performance stock units
Denominator for earnings (loss) per share calculation:
Effect of dilutive securities (in shares)	0	4	6	5
Stock options and stock appreciation rights
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	4	8	4	8
Denominator for earnings (loss) per share calculation:
Effect of dilutive securities (in shares)	0	4	5	3

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Commitments and Contingencies (Details) $ in Millions		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 18, 2022 USD ($)	Aug. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2022 USD ($) lease	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) lease	Sep. 30, 2021 USD ($)	Dec. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2012 member	Sep. 30, 2020 claim
Commitments and Contingencies Disclosure [Abstract]
Guarantor obligations, number of leases | lease				68		68
Sample size | member										200
Loss Contingencies [Line Items]
Opioid litigation charges				$ 5,220	$ 0	$ 5,704	$ 0
Federal Court in Ohio Judgment | Pending Litigation
Loss Contingencies [Line Items]
Legal settlement awarded to other party		$ 651
Legal settlement, period of payment		15 years
State of Florida Settlement
Loss Contingencies [Line Items]
Legal settlement, period of payment			18 years
Opioid litigation charges			$ 484
Liability recorded in association with legal settlement			$ 484
Radcliffe and Flaim v. Aetna Inc., et al | Pending Litigation
Loss Contingencies [Line Items]
Number of claims | claim											2
Settlement Framework | Subsequent Event
Loss Contingencies [Line Items]
Legal settlement awarded to other party	$ 5,000
Legal settlement, period of payment	10 years
Settlement Framework | Subsequent Event | States and Political Subdivisions
Loss Contingencies [Line Items]
Legal settlement awarded to other party	$ 4,900
Settlement Framework | Subsequent Event | Tribal Entities
Loss Contingencies [Line Items]
Legal settlement awarded to other party	$ 130
Settlement Framework and Other Opioid-Related Claims
Loss Contingencies [Line Items]
Opioid litigation charges				$ 5,200
Settlement Framework and Other Opioid-Related Claims | Maximum | Forecast
Loss Contingencies [Line Items]
Cash impact of litigation settlement								$ 500	$ 500

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Segment Reporting - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 Segment
Segment Reporting [Abstract]
Number of operating segments	3

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Segment Reporting - Reconciliation of Financial Measures of Segments to Consolidated Totals (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenues from external customers	$ 80,958	$ 73,548	$ 238,106	$ 214,675
Net investment income (loss)	201	246	515	832
Total revenues	81,159	73,794	238,621	215,507
Adjusted operating income (loss)	4,233	4,073	13,526	13,165
Health Care Benefits
Segment Reporting Information [Line Items]
Total revenues	22,511	20,479	68,376	61,487
Pharmacy Services
Segment Reporting Information [Line Items]
Total revenues	43,216	39,046	125,489	113,681
Retail/ LTC
Segment Reporting Information [Line Items]
Total revenues	26,706	24,992	78,410	72,994
Operating Segments | Health Care Benefits
Segment Reporting Information [Line Items]
Revenues from external customers	22,387	20,311	68,029	60,993
Net investment income (loss)	101	147	278	432
Total revenues	22,511	20,479	68,376	61,487
Adjusted operating income (loss)	1,544	1,106	5,126	4,502
Operating Segments | Pharmacy Services
Segment Reporting Information [Line Items]
Revenues from external customers	40,545	36,851	116,600	105,909
Net investment income (loss)	0	0	0	0
Total revenues	43,216	39,046	125,489	113,681
Adjusted operating income (loss)	1,877	1,773	5,368	5,035
Copayments	2,900	2,800	9,800	9,000
Operating Segments | Retail/ LTC
Segment Reporting Information [Line Items]
Revenues from external customers	17,994	16,347	53,380	47,672
Net investment income (loss)	(10)	(33)	(44)	13
Total revenues	26,706	24,992	78,410	72,994
Adjusted operating income (loss)	1,398	1,723	4,865	5,166
Intersegment Eliminations
Segment Reporting Information [Line Items]
Intersegment revenues	(11,416)	(10,894)	(34,032)	(33,143)
Net investment income (loss)	0	0	0	0
Total revenues	(11,416)	(10,894)	(34,032)	(33,143)
Adjusted operating income (loss)	(169)	(186)	(556)	(523)
Intersegment Eliminations | Health Care Benefits
Segment Reporting Information [Line Items]
Intersegment revenues	23	21	69	62
Intersegment Eliminations | Pharmacy Services
Segment Reporting Information [Line Items]
Intersegment revenues	2,671	2,195	8,889	7,772
Intersegment Eliminations | Retail/ LTC
Segment Reporting Information [Line Items]
Intersegment revenues	8,722	8,678	25,074	25,309
Corporate/ Other
Segment Reporting Information [Line Items]
Revenues from external customers	32	39	97	101
Net investment income (loss)	110	132	281	387
Total revenues	142	171	378	488
Adjusted operating income (loss)	$ (417)	$ (343)	$ (1,277)	$ (1,015)

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Segment Reporting - Reconciliation of Consolidated Operating Income to Adjusted Operating Income (Details) - USD ($) $ in Millions	1 Months Ended		3 Months Ended		9 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting, Other Significant Reconciling Item [Line Items]
Operating income (loss) (GAAP measure)			$ (3,931)	$ 3,061	$ 4,128	$ 10,964
Amortization of intangible assets			464	561	1,398	1,730
Opioid litigation charges			5,220	0	5,704	0
Loss on assets held for sale			2,480	0	2,521	0
Gain on sale of subsidiary			0	0	(225)	0
Acquisition-related integration costs			0	20	0	101
Goodwill impairment			0	431	0	431
Acquisition purchase price adjustment outside of measurement period		$ (61)	0	0	0	(61)
Adjusted operating income			$ 4,233	$ 4,073	13,526	$ 13,165
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Payflex | Health Care Benefits
Segment Reporting, Other Significant Reconciling Item [Line Items]
Gain on sale of subsidiary					$ (225)
Proceeds from divestiture of subsidiary	$ 775