Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Dec. 31, 2019	Feb. 12, 2020	Jun. 28, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
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 Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
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 Public Float			$ 70,617,679,934
Entity Common Stock, Shares Outstanding		1,304,159,680
Documents Incorporated by Reference	The following materials are incorporated by reference into this Form 10-K: Information contained in the definitive proxy statement for CVS Health Corporation’s 2020 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2019 (the “Proxy Statement”), is incorporated by reference in Parts III and IV to the extent described therein.
Entity Central Index Key	0000064803
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Statements of Operations - USD ($) shares in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues:
Premiums	$ 63,122,000,000	$ 8,184,000,000	$ 3,558,000,000
Net investment income	1,011,000,000	660,000,000	21,000,000
Total revenues	256,776,000,000	194,579,000,000	184,786,000,000
Operating costs:
Cost of products sold	158,719,000,000	156,447,000,000	153,448,000,000
Benefit costs	52,529,000,000	6,594,000,000	2,810,000,000
Goodwill impairments	0	6,149,000,000	181,000,000
Operating expenses	33,541,000,000	21,368,000,000	18,809,000,000
Total operating costs	244,789,000,000	190,558,000,000	175,248,000,000
Operating income	11,987,000,000	4,021,000,000	9,538,000,000
Interest expense	3,035,000,000	2,619,000,000	1,062,000,000
Loss on early extinguishment of debt	79,000,000	0	0
Other expense (income)	(124,000,000)	(4,000,000)	208,000,000
Income before income tax provision	8,997,000,000	1,406,000,000	8,268,000,000
Income tax provision	2,366,000,000	2,002,000,000	1,637,000,000
Income (loss) from continuing operations	6,631,000,000	(596,000,000)	6,631,000,000
Loss from discontinued operations, net of tax	0	0	(8,000,000)
Net income (loss)	6,631,000,000	(596,000,000)	6,623,000,000
Net (income) loss attributable to noncontrolling interests	3,000,000	2,000,000	(1,000,000)
Net income (loss) attributable to CVS Health	$ 6,634,000,000	$ (594,000,000)	$ 6,622,000,000
Basic earnings (loss) per share:
Income (loss) from continuing operations attributable to CVS Health (in dollars per share)	$ 5.10	$ (0.57)	$ 6.48
Loss from discontinued operations attributable to CVS Health (in dollars per share)	0	0	(0.01)
Net income (loss) attributable to CVS Health (in dollars per share)	$ 5.10	$ (0.57)	$ 6.47
Weighted average basic shares outstanding (in shares)	1,301	1,044	1,020
Diluted earnings (loss) per share:
Income (loss) from continuing operations attributable to CVS Health (in dollars per share)	$ 5.08	$ (0.57)	$ 6.45
Loss from discontinued operations attributable to CVS Health (in dollars per share)	0	0	(0.01)
Net income (loss) attributable to CVS Health (in dollars per share)	$ 5.08	$ (0.57)	$ 6.44
Weighted average diluted shares outstanding (in shares)	1,305	1,044	1,024
Dividends declared per share (in dollars per share)	$ 2.00	$ 2.00	$ 2.00
Products
Revenues:
Revenues	$ 185,236,000,000	$ 183,910,000,000	$ 180,063,000,000
Services
Revenues:
Revenues	$ 7,407,000,000	$ 1,825,000,000	$ 1,144,000,000

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 6,631	$ (596)	$ 6,623
Other comprehensive income (loss), net of tax:
Net unrealized investment gains	677	97	0
Foreign currency translation adjustments	162	(29)	(2)
Net cash flow hedges	(33)	330	(10)
Pension and other postretirement benefits	111	(124)	152
Other comprehensive income	917	274	140
Comprehensive income (loss)	7,548	(322)	6,763
Comprehensive (income) loss attributable to noncontrolling interests	3	2	(1)
Comprehensive income (loss) attributable to CVS Health	$ 7,551	$ (320)	$ 6,762

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Assets:
Cash and cash equivalents	$ 5,683	$ 4,059
Investments	2,373	2,522
Accounts receivable, net	19,617	17,631
Inventories	17,516	16,450
Other current assets	5,113	4,581
Total current assets	50,302	45,243
Long-term investments	17,314	15,732
Property and equipment, net	12,044
Property and equipment, net		11,349
Operating lease right-of-use assets	20,860
Goodwill	79,749	78,678
Intangible assets, net	33,121	36,524
Separate accounts assets	4,459	3,884
Other assets	4,600	5,046
Total assets	222,449	196,456
Liabilities:
Accounts payable	10,492	8,925
Pharmacy claims and discounts payable	13,601	11,365
Health care costs payable	6,879	6,147
Policyholders’ funds	2,991	2,939
Accrued expenses	12,133	10,711
Other insurance liabilities	1,830	1,937
Current portion of operating lease liabilities	1,596
Short-term debt	0	720
Current portion of long-term debt	3,781	1,265
Total current liabilities	53,303	44,009
Long-term operating lease liabilities	18,926
Long-term debt	64,699	71,444
Deferred income taxes	7,294	7,677
Separate accounts liabilities	4,459	3,884
Other long-term insurance liabilities	7,436	8,119
Other long-term liabilities	2,162	2,780
Total liabilities	158,279	137,913
Commitments and contingencies (Note 16)
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; 1,727 shares issued and 1,302 shares outstanding at December 31, 2019 and 1,720 shares issued and 1,295 shares outstanding at December 31, 2018 and capital surplus	45,972	45,440
Treasury stock, at cost: 425 shares at both December 31, 2019 and 2018	(28,235)	(28,228)
Retained earnings	45,108	40,911
Accumulated other comprehensive income	1,019	102
Total CVS Health shareholders’ equity	63,864	58,225
Noncontrolling interests	306	318
Total shareholders’ equity	64,170	58,543
Total liabilities and shareholders’ equity	$ 222,449	$ 196,456

Consolidated Balance Sheets (Parentheticals) - $ / shares shares in Millions	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	0.1	0.1
Preferred stock, shares issued (in shares)	0.0	0.0
Preferred stock, shares outstanding (in shares)	0.0	0.0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,200.0	3,200.0
Common stock, shares issued (in shares)	1,727.0	1,720.0
Common stock, shares outstanding (in shares)	1,302.0	1,295.0
Treasury stock (in shares)	425.0	425.0

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Cash receipts from customers	$ 248,393,000,000	$ 186,519,000,000	$ 176,594,000,000
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(149,655,000,000)	(148,981,000,000)	(146,469,000,000)
Insurance benefits paid	(52,242,000,000)	(6,897,000,000)	(2,810,000,000)
Cash paid to other suppliers and employees	(28,932,000,000)	(17,234,000,000)	(15,348,000,000)
Interest and investment income received	955,000,000	644,000,000	21,000,000
Interest paid	(2,954,000,000)	(2,803,000,000)	(1,072,000,000)
Income taxes paid	(2,717,000,000)	(2,383,000,000)	(2,909,000,000)
Net cash provided by operating activities	12,848,000,000	8,865,000,000	8,007,000,000
Cash flows from investing activities:
Proceeds from sales and maturities of investments	7,049,000,000	817,000,000	61,000,000
Purchases of investments	(7,534,000,000)	(692,000,000)	(137,000,000)
Purchases of property and equipment	(2,457,000,000)	(2,037,000,000)	(1,918,000,000)
Proceeds from sale-leaseback transactions	5,000,000
Proceeds from sale-leaseback transactions		0	265,000,000
Acquisitions (net of cash acquired)	(444,000,000)	(42,226,000,000)	(1,181,000,000)
Proceeds from sale of subsidiary and other assets	0	832,000,000	0
Other	42,000,000	21,000,000	33,000,000
Net cash used in investing activities	(3,339,000,000)	(43,285,000,000)	(2,877,000,000)
Cash flows from financing activities:
Net repayments of short-term debt	(720,000,000)	(556,000,000)	(598,000,000)
Proceeds from issuance of long-term debt	3,736,000,000	44,343,000,000	0
Repayments of long-term debt	(8,336,000,000)	(5,522,000,000)	0
Derivative settlements	(25,000,000)	446,000,000	0
Repurchase of common stock	0	0	(4,361,000,000)
Dividends paid	(2,603,000,000)	(2,038,000,000)	(2,049,000,000)
Proceeds from exercise of stock options	210,000,000	242,000,000	329,000,000
Payments for taxes related to net share settlement of equity awards	(112,000,000)	(97,000,000)	(71,000,000)
Other	0	1,000,000	(1,000,000)
Net cash provided by (used in) financing activities	(7,850,000,000)	36,819,000,000	(6,751,000,000)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0	(4,000,000)	1,000,000
Net increase (decrease) in cash, cash equivalents and restricted cash	1,659,000,000	2,395,000,000	(1,620,000,000)
Cash, cash equivalents and restricted cash at the beginning of the period	4,295,000,000	1,900,000,000	3,520,000,000
Cash, cash equivalents and restricted cash at the end of the period	5,954,000,000	4,295,000,000	1,900,000,000
Reconciliation of net income (loss) to net cash provided by operating activities:
Net income (loss)	6,631,000,000	(596,000,000)	6,623,000,000
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	4,371,000,000	2,718,000,000	2,479,000,000
Goodwill impairments	0	6,149,000,000	181,000,000
Loss on settlement of defined benefit pension plans	0	0	187,000,000
Stock-based compensation	453,000,000	280,000,000	234,000,000
Loss on sale of subsidiary	205,000,000	86,000,000	0
Loss on early extinguishment of debt	79,000,000	0	0
Deferred income taxes	(654,000,000)	87,000,000	(1,334,000,000)
Other noncash items	264,000,000	253,000,000	53,000,000
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(2,158,000,000)	(1,139,000,000)	(941,000,000)
Inventories	(1,075,000,000)	(1,153,000,000)	(514,000,000)
Other assets	(614,000,000)	(3,000,000)	(338,000,000)
Accounts payable and pharmacy claims and discounts payable	3,550,000,000	2,329,000,000	1,710,000,000
Health care costs payable and other insurance liabilities	320,000,000	(311,000,000)	0
Other liabilities	$ 1,476,000,000	$ 165,000,000	$ (333,000,000)

Consolidated Statements of Shareholders' Equity - USD ($)
shares in Millions, $ in Millions

Total

Common Shares

Treasury Shares

Common Stock and Capital Surplus

^[2]

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Total CVS Health Shareholders' Equity

Noncontrolling Interest

Balance at beginning of period (in shares) at Dec. 31, 2016

1,705

(644)

^[1]

Beginning of year balance at Dec. 31, 2016

$ 36,834

$ (33,483)

^[1]

$ 31,635

$ 38,983

$ (305)

$ 36,830

$ 4

Stockholders' Equity [Roll Forward]

Net income (loss)

6,623

6,622

1

Other comprehensive income (Note 13)

140

Stock option activity, stock awards and other (in shares)

7

Stock option activity, stock awards and other

461

Purchase of treasury shares, net of ESPP issuances (in shares)

^[1]

(54)

Purchase of treasury shares, net of ESPP issuances

(4,313)

$ (4,313)

^[1]

(4,313)

Common stock dividends

(2,049)

Other decreases in noncontrolling interests

(1)

Balance at end of period (in shares) at Dec. 31, 2017

1,712

(698)

^[1]

End of year balance at Dec. 31, 2017

37,695

$ (37,796)

^[1]

32,096

43,556

(165)

37,691

4

Stockholders' Equity [Roll Forward]

Net income (loss)

(596)

(594)

(2)

Other comprehensive income (Note 13)

274

Common shares issued to acquire Aetna (in shares)

^[1]

274

Common shares issued to acquire Aetna

22,484

$ 9,561

^[1]

12,923

22,484

Stock option activity, stock awards and other (in shares)

8

Stock option activity, stock awards and other

421

Purchase of treasury shares, net of ESPP issuances (in shares)

^[1]

(1)

Purchase of treasury shares, net of ESPP issuances

7

$ 7

^[1]

7

Common stock dividends

(2,045)

Acquisition of noncontrolling interests

329

Other decreases in noncontrolling interests

(13)

Balance at end of period (in shares) at Dec. 31, 2018

1,720

(425)

^[1]

End of year balance at Dec. 31, 2018

58,543

$ (28,228)

^[1]

45,440

40,911

102

58,225

318

Stockholders' Equity [Roll Forward]

Net income (loss)

6,631

6,634

(3)

Other comprehensive income (Note 13)

917

Stock option activity, stock awards and other (in shares)

7

2

Stock option activity, stock awards and other

532

Purchase of treasury shares, net of ESPP issuances (in shares)

^[1]

(2)

Purchase of treasury shares, net of ESPP issuances

(7)

$ (7)

^[1]

(7)

Common stock dividends

(2,615)

Other decreases in noncontrolling interests

(9)

Balance at end of period (in shares) at Dec. 31, 2019

1,727

(425)

^[1]

End of year balance at Dec. 31, 2019

$ 64,170

$ (28,235)

^[1]

$ 45,972

$ 45,108

$ 1,019

$ 63,864

$ 306

[1]

Treasury shares include 1 million shares held in trust for each of the years ended December 31, 2019, 2018 and 2017. Treasury stock includes $29 million related to shares held in trust for each of the years ended December 31, 2019 and 2018 and $31 million related to shares held in trust for the year ended December 31, 2017. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

[2]

Common stock and capital surplus includes the par value of common stock of $17 million as of December 31, 2019, 2018 and 2017.

Consolidated Statements of Shareholders' Equity (Parentheticals) - USD ($)
shares in Millions, $ in Millions

Dec. 31, 2019

Jan. 01, 2019

Dec. 31, 2018

Jan. 01, 2018

Dec. 31, 2017

Treasury shares held in trust (in shares)

1

Treasury shares held in trust

$ 29

$ 31

Common stock

17

$ 17

Adoption of new accounting standards

$ (178)

$ 13

^[1]

Decrease to accumulated other comprehensive income

(1,019)

(102)

Increase to retained earnings

$ 45,108

$ 41,089

$ 40,911

Accounting Standards Update 2014-09

Adoption of new accounting standards

13

Accounting Standards Update 2018-02

Decrease to accumulated other comprehensive income

7

Increase to retained earnings

$ 7

[1]

Reflects the adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, which resulted in a reduction to retained earnings of $13 million and the adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which resulted in a reduction to accumulated other comprehensive income of $7 million and an increase to retained earnings of $7 million, each during the year ended December 31, 2018.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies

Description of Business

CVS Health Corporation (“CVS Health”), together with its subsidiaries (collectively, “Company”), has approximately 9,900 retail locations, approximately 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 105 million plan members, a dedicated senior pharmacy care business serving more than one million patients per year and expanding specialty pharmacy services. CVS Health also serves an estimated 37 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.

On November 28, 2018 (the “Aetna Acquisition Date”), the Company acquired Aetna Inc. (“Aetna”). As a result of the acquisition of Aetna (the “Aetna Acquisition”), the Company added the Health Care Benefits segment. Certain aspects of Aetna’s operations, including products for which the Company no longer solicits or accepts new customers, such as large case pensions and long-term care insurance products, are included in the Company’s Corporate/Other segment. The consolidated financial statements reflect Aetna’s results subsequent to the Aetna Acquisition Date.

Effective for the first quarter of 2019, the Company realigned the composition of its segments to correspond with changes to its operating model and reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company’s SilverScript^® PDP moved from the Pharmacy Services segment to the Health Care Benefits segment. In addition, the Company moved Aetna’s mail order and specialty pharmacy operations from the Health Care Benefits segment to the Pharmacy Services segment. Segment financial information has been retrospectively adjusted to reflect these changes.

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

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, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services and medical spend management. 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 health insurance exchanges (“Public Exchanges”) and private health insurance exchanges, other sponsors of health benefit plans and individuals throughout the United States. 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 general merchandise, including over-the-counter drugs, beauty products, cosmetics and personal care products, provides health care services through its MinuteClinic^® walk-in medical clinics and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to chronic care facilities and other care settings. As of December 31, 2019, the Retail/LTC segment operated approximately 9,900 retail locations, approximately 1,100 MinuteClinic^® locations as well as online retail pharmacy websites, LTC pharmacies and onsite pharmacies.

Health Care Benefits Segment

The Health Care Benefits segment is one of the nation’s leading diversified health care benefits providers, serving an estimated 37 million people as of December 31, 2019. 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, workers’ compensation administrative services and health information technology products and services. The Health Care Benefit 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.” For periods prior to November 28, 2018 (the Aetna Acquisition Date), the Health Care Benefits segment was comprised of the Company’s SilverScript PDP business.

Corporate/Other Segment

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

•

Management and administrative expenses to support the overall operations of the Company, 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 transaction and 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 consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The 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.

Reclassifications

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

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when purchased. The Company invests in short-term money market funds, commercial paper and time deposits, as well as other debt securities that are classified as cash equivalents within the accompanying consolidated balance sheets, as these funds are highly liquid and readily convertible to known amounts of cash.

Restricted Cash

Restricted cash included in other current assets on the consolidated balance sheets represents amounts held in escrow accounts in connection with certain recent acquisitions. Restricted cash included in other assets on the 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, money market funds or commercial paper.

The following is a reconciliation of cash and cash equivalents on the consolidated balance sheets to total cash, cash equivalents and restricted cash on the consolidated statements of cash flows as of December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Cash and cash equivalents	$	5,683	$	4,059	$	1,696
Restricted cash (included in other current assets)	—		6		14
Restricted cash (included in other assets)	271		230		190
Total cash, cash equivalents and restricted cash at the end of the period in the consolidated statements of cash flows	$	5,954	$	4,295	$	1,900

Investments

Debt Securities

Debt securities consist primarily of U.S. Treasury and agency securities, mortgage-backed securities, corporate and foreign bonds and other debt securities. Debt securities are classified as either current or long-term investments based on their contractual maturities unless the Company intends to sell an investment within the next twelve months, in which case it is classified as current on the consolidated balance sheets. Debt securities are classified as available for sale and are carried at fair value. See Note 4 ‘‘Fair Value’’ for additional information on how the Company estimates the fair value of these investments.

The cost for mortgage-backed and other asset-backed securities is adjusted for unamortized premiums and discounts, which are amortized using the interest method over the estimated remaining term of the securities, adjusted for anticipated prepayments.

The Company regularly reviews its debt securities to determine whether a decline in fair value below the cost basis or carrying value is other-than-temporary. When a debt security is in an unrealized capital loss position, the Company monitors the duration and severity of the loss to determine if sufficient market recovery can occur within a reasonable period of time. If a decline in the fair value of a debt security is considered other-than-temporary, the cost basis or carrying value of the debt security is written down. The write-down is then bifurcated into its credit and non-credit related components. The amount of the credit-related component is included in the Company’s net income (loss), and the amount of the non-credit related component is included in other comprehensive income (loss), unless the Company intends to sell the debt security or it is more likely than not that the Company will be required to sell the debt security prior to its anticipated recovery of the debt security’s amortized cost basis. Interest is not accrued on debt securities when management believes the collection of interest is unlikely.

Equity Securities

Equity securities with readily available fair values are measured at fair value with changes in fair value recognized in net income (loss).

Mortgage Loans

Mortgage loan investments on the consolidated balance sheets are valued at the unpaid principal balance, net of impairment reserves. A mortgage loan may be impaired when it is a problem loan (i.e., more than 60 days delinquent, in bankruptcy or in process of foreclosure), a potential problem loan (i.e., high probability of default) or a restructured loan. For impaired loans, a specific impairment reserve is established for the difference between the recorded investment in the loan and the estimated fair value of the collateral. The Company applies its loan impairment policy individually to all loans in its portfolio.

The impairment evaluation described above also considers characteristics and risk factors attributable to the aggregate portfolio. An additional allowance for loan losses is established if it is probable that there will be a credit loss on a group of similar mortgage loans. The following characteristics and risk factors are considered when evaluating if a credit loss is probable on a group of similar mortgage loans: loan-to-value ratios, property type (e.g., office, retail, apartment, industrial), geographic location, vacancy rates and property condition.

Full or partial impairments of loans are recorded at the time an event occurs affecting the legal status of the loan, typically at the time of foreclosure or upon a loan modification giving rise to forgiveness of debt. Interest income on a potential problem loan or restructured loan is accrued to the extent it is deemed to be collectible and the loan continues to perform under its original or restructured terms. Interest income on problem loans is recognized on a cash basis. Cash payments on loans in the process of foreclosure are treated as a return of principal. Mortgage loans with a maturity date or a committed prepayment date within twelve months are classified as current on the consolidated balance sheets.

Other Investments

Other investments consist primarily of the following:

•

Private equity and hedge fund limited partnerships, which are accounted for using the equity method of accounting. Under this method, the carrying value of the investment is based on the value of the Company’s equity ownership of the underlying investment funds provided by the general partner or manager of the investments, the financial statements of which generally are audited. As a result of the timing of the receipt of the valuation information provided by the fund managers, these investments are generally reported on up to a three month lag. The Company reviews investments for impairment at least quarterly and monitors their performance throughout the year through discussions with the administrators, managers and/or general partners. If the Company becomes aware of an impairment of a limited partnership’s investments through its review or prior to receiving the limited partnership’s financial statements at the

financial statement date, an impairment will be recognized by recording a reduction in the carrying value of the limited partnership with a corresponding charge to net investment income.

•

Investment real estate, which is carried on the consolidated balance sheets at depreciated cost, including capital additions, net of write-downs for other-than-temporary declines in fair value. Depreciation is calculated using the straight-line method based on the estimated useful life of each asset. If any real estate investment is considered held-for-sale, it is carried at the lower of its carrying value or fair value less estimated selling costs. The Company generally estimates fair value using a discounted future cash flow analysis in conjunction with comparable sales information. At the time of the sale, the difference between the sales price and the carrying value is recorded as a realized capital gain or loss.


•	Privately-placed equity securities, which are carried on the consolidated balance sheets at cost less impairments, plus or minus subsequent adjustments for observable price changes. Additionally, as a member of the Federal Home Loan Bank of Boston (“FHLBB”), a subsidiary of the Company is required to purchase and hold shares of the FHLBB. These shares are restricted and carried at cost.

Net Investment Income

Net investment income on the Company’s investments is recorded when earned and is reflected in the Company’s net income (loss) (other than net investment income on assets supporting experience-rated products). Experience-rated products are products in the large case pensions business where the contract holder, not the Company, assumes investment and other risks, subject to, among other things, minimum guarantees provided by the Company. The effect of investment performance on experience-rated products is allocated to contract holders’ accounts daily, based on the underlying investment experience and, therefore, does not impact the Company’s net income (loss) (as long as the contract’s minimum guarantees are not triggered). Net investment income on assets supporting large case pensions’ experience-rated products is included in net investment income in the consolidated statements of operations and is credited to contract holders’ accounts through a charge to benefit costs.

Realized capital gains and losses on investments (other than realized capital gains and losses on investments supporting experience-rated products) are included as a component of net investment income in the consolidated statements of operations. Realized capital gains and losses are determined on a specific identification basis. Purchases and sales of debt and equity securities and alternative investments are reflected on the trade date. Purchases and sales of mortgage loans and investment real estate are reflected on the closing date.

Realized capital gains and losses on investments supporting large case pensions’ experience-rated products are not included in realized capital gains and losses in the consolidated statements of operations and instead are credited directly to contract holders’ accounts. The contract holders’ accounts are reflected in policyholders’ funds on the consolidated balance sheets.

Unrealized capital gains and losses on investments (other than unrealized capital gains and losses on investments supporting experience-rated products) are reflected in shareholders’ equity, net of tax, as a component of accumulated other comprehensive income. Unrealized capital gains and losses on investments supporting large case pensions’ experience-rated products are credited directly to contract holders’ accounts. The contract holders’ accounts are reflected in policyholders’ funds on the consolidated balance sheets.

Derivative Financial Instruments

The Company uses derivative financial instruments in order to manage interest rate and foreign exchange risk and credit exposure. The Company’s use of these derivatives is generally limited to hedging risk and has principally consisted of using interest rate swaps, treasury rate locks, forward contracts, futures contracts, warrants, put options and credit default swaps.

Accounts Receivable

Accounts receivable are stated net of allowances for doubtful accounts, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following at December 31, 2019 and 2018:



In millions	2019		2018
Trade receivables	$	6,717	$	6,497
Vendor and manufacturer receivables	7,856		7,315
Premium receivables	2,663		2,259
Other receivables	2,381		1,560
Total accounts receivable, net	$	19,617	$	17,631

The activity in the allowance for doubtful accounts receivable for the years ended December 31, 2019, 2018 and 2017 is as follows:



In millions	2019			2018			2017
Beginning balance	$	287		$	162		$	158
Additions charged to bad debt expense	111			162			139
Write-offs charged to allowance	(79		)	(37		)	(135		)
Ending balance	$	319		$	287		$	162

Inventories

Inventories are valued at the lower of cost or net realizable value using the weighted average cost method. Physical inventory counts are taken on a regular basis in each retail store and LTC pharmacy, and a continuous cycle count process is the primary procedure used to validate the inventory balances on hand in each distribution center and mail facility to ensure that the amounts reflected in the consolidated financial statements are properly stated. During the interim period between physical inventory counts, the Company accrues for anticipated physical inventory losses on a location-by-location basis based on historical results and current physical inventory trends.

Reinsurance Recoverables

The Company utilizes reinsurance agreements primarily to: (a) reduce required capital and (b) facilitate the acquisition or disposition of certain insurance contracts. Ceded reinsurance agreements permit the Company to recover a portion of its losses from reinsurers, although they do not discharge the Company’s primary liability as the direct insurer of the risks reinsured. Failure of reinsurers to indemnify the Company could result in losses; however, the Company does not expect charges for unrecoverable reinsurance to have a material effect on its consolidated operating results or financial condition. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of its reinsurers. At December 31, 2019, the Company’s reinsurance recoverables consisted primarily of amounts due from third parties that are rated consistent with companies that are considered to have the ability to meet their obligations. Reinsurance recoverables are recorded as other current assets or other assets on the consolidated balance sheets.

Health Care Contract Acquisition Costs

Insurance products included in the Health Care Benefits segment are cancelable by either the customer or the member monthly upon written notice. Acquisition costs related to prepaid health care and health indemnity contracts are generally expensed as incurred. Acquisition costs for certain long-duration insurance contracts are deferred and are recorded as other current assets or other assets on the consolidated balance sheets and are amortized over the estimated life of the contracts. The amortization of deferred acquisition costs is recorded in operating expenses in the consolidated statements of operations. At December 31, 2019 and 2018, the balance of deferred acquisition costs was $271 million and $22 million, respectively, comprised primarily of commissions paid on Medicare Supplement products within the Health Care Benefits segment.

Property and Equipment

Property and equipment is reported at historical cost, net of accumulated depreciation. Property, equipment and improvements to leased premises are depreciated using the straight-line method over the estimated useful lives of the assets, or when applicable, the term of the lease, whichever is shorter. Estimated useful lives generally range from 1 to 40 years for buildings, building improvements and leasehold improvements and 3 to 10 years for fixtures, equipment and internally developed software. Repair and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Application development stage costs for significant internally developed software projects are capitalized and depreciated.

Property and equipment consists of the following at December 31, 2019 and 2018:



In millions	2019			2018
Land	$	1,981		$	1,872
Building and improvements	4,068			3,785
Fixtures and equipment	13,807			13,028
Leasehold improvements	5,611			5,384
Software	3,467			2,800
Total property and equipment	28,934			26,869
Accumulated depreciation and amortization	(16,890		)	(15,520		)
Property and equipment, net	$	12,044		$	11,349

Depreciation expense (which includes the amortization of property and equipment under finance or capital leases) totaled $1.9 billion in the year ended December 31, 2019 and $1.7 billion in each of the years ended December 31, 2018 and 2017. See Note 6 ‘‘Leases’’ for additional information about finance and capital leases.

Right-of-Use Assets and Lease Liabilities

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date of the lease, renewal date of the lease or significant remodeling of the lease space based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and are reduced by lease incentives.

The Company’s real estate leases typically contain options that permit renewals for additional periods of up to five years each. For real estate leases, the options to extend are not considered reasonably certain at lease commencement because the Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options and regularly opens or closes stores to align with its operating strategy. Generally, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the right-of-use asset and lease liability. Similarly, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheets, and lease expense is recognized on a straight-line basis over the term of the short-term lease.

For real estate leases, the Company accounts for lease components and nonlease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities.

See Note 6 ‘‘Leases’’ for additional information about right-of-use assets and lease liabilities.

Goodwill

The Company accounts for business combinations using the acquisition method of accounting, which requires the excess cost of an acquisition over the fair value of net assets acquired and identifiable intangible assets to be recorded as goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary, as further described below. See Note 5 ‘‘Goodwill and Other Intangibles’’ for additional information about goodwill.

Intangible Assets

The Company’s identifiable intangible assets consist primarily of trademarks, trade names, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired (“VOBA”). These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.

The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset. Other than VOBA, definite-lived intangible assets are amortized using the straight-line method. VOBA is amortized over the expected life of the acquired contracts in proportion to estimated premiums. Indefinite-lived intangible assets are not amortized but are tested for impairment annually, or more frequently if necessary, as further described in “Long-Lived Asset Impairment” below.

See Note 5 ‘‘Goodwill and Other Intangibles’’ for additional information about intangible assets.

Long-Lived Asset Impairment

The Company evaluates the recoverability of long-lived assets, excluding goodwill and indefinite-lived intangible assets, which are tested for impairment using separate tests described below, whenever events or changes in circumstances indicate that the carrying value of such asset may not be recoverable. The Company groups and evaluates these long-lived assets for impairment at the lowest level at which individual cash flows can be identified. If indicators of impairment are present, the Company first compares the carrying amount of the asset group to the estimated future cash flows associated with the asset group (undiscounted and without interest charges). If the estimated future cash flows used in this analysis are less than the carrying amount of the asset group, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset group to the asset group’s estimated future cash flows (discounted and with interest charges). If required, an impairment loss is recorded for the portion of the asset group’s carrying value that exceeds the asset group’s estimated future cash flows (discounted and with interest charges). During the year ended December 31, 2019, the Company recorded store rationalization charges of $231 million, primarily related to operating lease right-of-use asset impairment charges. See Note 6 ‘‘Leases’’ for additional information about the right-of-use asset impairment charges. During the year ended December 31, 2018, the Company recognized a $43 million long-lived asset impairment charge, primarily related to the impairment of property and equipment. There were no material impairment charges recognized on long-lived assets in the year ended December 31, 2017.

When evaluating goodwill for potential impairment, the Company compares the fair value of its reporting units to their respective carrying amounts. The Company estimates the fair value of its reporting units using a combination of a discounted cash flow method and a market multiple method. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess. During the third quarter of 2019, the Company performed its required annual goodwill impairment tests and concluded there were no goodwill impairments as of the testing date. See Note 5 ‘‘Goodwill and Other Intangibles’’ for additional information about goodwill impairment charges recorded during the years ended December 31, 2018 and 2017.

Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to its carrying value. The Company estimates the fair value of its indefinite-lived trademarks using the relief from royalty method under the income approach. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value. There were no impairment losses recognized on indefinite-lived intangible assets in any of the years ended December 31, 2019, 2018 or 2017.

Separate Accounts

Separate Accounts assets and liabilities related to large case pensions products represent funds maintained to meet specific objectives of contract holders who bear the investment risk. These assets and liabilities are carried at fair value. Net investment income (including net realized capital gains and losses) accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals and net investment income (including net realized and net unrealized capital gains and losses) on Separate Accounts assets are not reflected in the consolidated statements of operations or cash flows. Management fees charged to contract holders are included in services revenue and recognized over the period earned.

Health Care Costs Payable

Health care costs payable consist principally of unpaid fee-for-service medical, dental and pharmacy claims, capitation costs, other amounts due to health care providers pursuant to risk-sharing arrangements related to the Health Care Benefits segment’s Insured Commercial, Medicare and Medicaid products and accruals for state assessments. Unpaid health care claims include an estimate of payments the Company will make for (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, each as of the financial statement date (collectively, “IBNR”). Health care costs payable also include an estimate of the cost of services that will continue to be rendered after the financial statement date if the Company is obligated to pay for such services in accordance with contractual or regulatory requirements. Such estimates are developed using actuarial principles and assumptions which consider, among other things, historical and projected claim submission and processing patterns, assumed and historical medical cost trends, historical utilization of medical services, claim inventory levels, changes in Insured membership and product mix, seasonality and other relevant factors. The Company reflects changes in these estimates in benefit costs in the Company’s consolidated operating results in the period they are determined. Capitation costs represent contractual monthly fees paid to participating physicians and other medical providers for providing medical care, regardless of the volume of medical services provided to the Insured member. Amounts due under risk-sharing arrangements are based on the terms of the underlying contracts with the providers and consider claims experience under the contracts through the financial statement date.

The Company develops its estimate of IBNR using actuarial principles and assumptions that consider numerous factors. Of those factors, the Company considers the analysis of historical and projected claim payment patterns (including claims submission and processing patterns) and the assumed health care cost trend rate (the year-over-year change in per member per month health care costs) to be the most critical assumptions. In developing its IBNR estimate, the Company consistently applies these actuarial principles and assumptions each period, with consideration to the variability of related factors. There have been no significant changes to the methodologies or assumptions used to develop the Company’s estimate of IBNR in 2019.

The Company analyzes historical claim payment patterns by comparing claim incurred dates (i.e., the date services were provided) to claim payment dates to estimate “completion factors.” The Company uses completion factors predominantly to estimate the ultimate cost of claims incurred more than three months before the financial statement date. The Company estimates completion factors by aggregating claim data based on the month of service and month of claim payment and estimating the percentage of claims incurred for a given month that are complete by each month thereafter. For any given month, substantially all claims are paid within six months of the date of service, but it can take up to 48 months or longer after the date of service before all of the claims are completely resolved and paid. These historically-derived completion factors are then applied to claims paid through the financial statement date to estimate the ultimate claim cost for a given month’s incurred claim activity. The difference between the estimated ultimate claim cost and the claims paid through the financial statement date represents the Company’s estimate of claims remaining to be paid as of the financial statement date and is included in the Company’s health care costs payable. The completion factors the Company uses reflect judgments and possible adjustments based on data such as claim inventory levels, claim submission and processing patterns and, to a lesser extent, other factors such as changes in health care cost trend rates, changes in Insured membership and changes in product mix. If claims are submitted or processed on a faster (slower) pace than prior periods, the actual claims may be more (less) complete than originally estimated using the Company’s completion factors, which may result in reserves that are higher (lower) than the ultimate cost of claims.

Because claims incurred within three months before the financial statement date are less mature, the Company uses a combination of historically-derived completion factors and the assumed health care cost trend rate to estimate the ultimate cost of claims incurred for these months. The Company applies its actuarial judgment and places a greater emphasis on the assumed health care cost trend rate for the most recent claim incurred dates as these months may be influenced by seasonal patterns and changes in membership and product mix.

The Company’s health care cost trend rate is affected by changes in per member utilization of medical services as well as changes in the unit cost of such services. Many factors influence the health care cost trend rate, including the Company’s ability to manage benefit costs through product design, negotiation of favorable provider contracts and medical management programs, as well as the mix of the Company’s business. The health status of the Company’s Insured members, aging of the population and other demographic characteristics, advances in medical technology and other factors continue to contribute to rising per member utilization and unit costs. Changes in health care practices, inflation, new technologies, increases in the cost of prescription drugs (including specialty pharmacy drugs), direct-to-consumer marketing by pharmaceutical companies, clusters of high-cost cases, claim intensity, changes in the regulatory environment, health care provider or member fraud and numerous other factors also contribute to the cost of health care and the Company’s health care cost trend rate.

For each reporting period, the Company uses an extensive degree of judgment in the process of estimating its health care costs payable. As a result, considerable variability and uncertainty is inherent in such estimates, particularly with respect to claims with claim incurred dates of three months or less before the financial statement date; and the adequacy of such estimates is highly sensitive to changes in assumed completion factors and the assumed health care cost trend rates. For each reporting period the Company recognizes the actuarial best estimate of health care costs payable considering the potential volatility in assumed completion factors and health care cost trend rates, as well as other factors. The Company believes its estimate of health care costs payable is reasonable and adequate to cover its obligations at December 31, 2019; however, actual claim payments may differ from the Company’s estimates. A worsening (or improvement) of the Company’s health care cost trend rates or changes in completion factors from those that the Company assumed in estimating health care costs payable at December 31, 2019 would cause these estimates to change in the near term, and such a change could be material.

Each quarter, the Company re-examines previously established health care costs payable estimates based on actual claim payments for prior periods and other changes in facts and circumstances. Given the extensive degree of judgment in this estimate, it is possible that the Company’s estimates of health care costs payable could develop either favorably (that is, its actual benefit costs for the period were less than estimated) or unfavorably. The changes in the Company’s estimate of health care costs payable may relate to a prior quarter, prior year or earlier periods. For a roll forward of the Company’s health care costs payable, see Note 7 ‘‘Health Care Costs Payable.’’ The Company’s reserving practice is to consistently recognize the actuarial best estimate of its ultimate liability for health care costs payable.

Other Insurance Liabilities

Unpaid Claims

Unpaid claims consist primarily of reserves associated with certain short-duration group disability and term life insurance contracts, including an estimate for IBNR as of the financial statement date. Reserves associated with certain short-duration group disability and term life insurance contracts are based upon the Company’s estimate of the present value of future benefits, which is based on assumed investment yields and assumptions regarding mortality, morbidity and recoveries from the U.S. Social Security Administration. The Company develops its estimate of IBNR using actuarial principles and assumptions which consider, among other things, contractual requirements, claim incidence rates, claim recovery rates, seasonality and other relevant factors. The Company discounts certain claim liabilities related to group long-term disability and life insurance waiver of premium contracts. The discount rates generally reflect the Company’s expected investment returns for the investments supporting all incurral years of these liabilities. The discount rates for retrospectively-rated contracts are set at contractually specified levels. The Company’s estimates of unpaid claims are subject to change due to changes in the underlying experience of the insurance contracts, changes in investment yields or other factors, and these changes are recorded in current and future benefits in the consolidated statements of operations in the period they are determined. The Company estimates its reserve for claims IBNR for life products largely based on completion factors. The completion factors used are based on the Company’s historical experience and reflect judgments and possible adjustments based on data such as claim inventory levels, claim payment patterns, changes in business volume and other factors. If claims are submitted or processed on a faster (slower) pace than historical periods, the actual claims may be more (less) complete than originally estimated using completion factors, which may result in reserves that are higher (lower) than required to cover future life benefit payments. There have been no significant changes to the methodologies or assumptions used to develop the Company’s estimate of unpaid claims IBNR in 2019. As of December 31, 2019, unpaid claims balances of $704 million and $1.8 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively. As of December 31, 2018, unpaid claims balances of $816 million and $1.9 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively.

Substantially all life and disability insurance liabilities have been fully ceded to unrelated third parties through indemnity reinsurance agreements; however, the Company remains directly obligated to the policyholders.

Future Policy Benefits

Future policy benefits consist primarily of reserves for limited payment pension and annuity contracts and long-term care insurance contracts. Reserves for limited payment pension and annuity contracts are computed using actuarial principles that consider, among other things, assumptions reflecting anticipated mortality, retirement, expense and interest rate experience. Such assumptions generally vary by plan, year of issue and policy duration. Assumed interest rates on such contracts ranged from 3.5% to 11.3% in the year ended December 31, 2019 and from the Aetna Acquisition Date through December 31, 2018. The Company periodically reviews mortality assumptions against both industry standards and its experience. Reserves for long-duration long-term care contracts represent the Company’s estimate of the present value of future benefits to be paid to or on behalf of policyholders less the present value of future net premiums. The assumed interest rate on such contracts was 5.1% in the year ended December 31, 2019 and from the Aetna Acquisition Date through December 31, 2018. The Company’s estimate of the present value of future benefits under such contracts is based upon mortality, morbidity and interest rate assumptions. As of December 31, 2019, future policy benefits balances of $508 million and $5.6 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively. As of December 31, 2018, future policy benefits balances of $536 million and $6.2 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively.

Premium Deficiency Reserves

The Company evaluates its insurance contracts to determine if it is probable that a loss will be incurred. A premium deficiency loss is recognized when it is probable that expected future claims, including maintenance costs (for example, direct costs such as claim processing costs), will exceed existing reserves plus anticipated future premiums and reinsurance recoveries. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts. For purposes of determining premium deficiency losses, contracts are grouped consistent with the Company’s method of acquiring, servicing and measuring the profitability of such contracts. As of December 31, 2019 and 2018, the Company established a premium deficiency reserve of $4 million and $16 million, respectively, related to Medicaid products in the Health Care Benefits segment.

Policyholders’ Funds

Policyholders’ funds consist primarily of reserves for pension and annuity investment contracts and customer funds associated with certain health contracts. Reserves for such contracts are equal to cumulative deposits less withdrawals and charges plus interest credited thereon, net of experience-rated adjustments. In 2019, interest rates for pension and annuity investment contracts ranged from 3.5% to 15.0%. From the Aetna Acquisition Date through December 31, 2018, interest rates for pension and annuity investment contracts ranged from 3.5% to 13.4%. Reserves for contracts subject to experience rating reflect the Company’s rights as well as the rights of policyholders and plan participants. The Company also holds funds for health savings accounts (“HSAs”) on behalf of members associated with high deductible health plans. These amounts are held to pay for qualified health care expenses incurred by these members. The HSA balances were approximately $2.2 billion and $2.1 billion at December 31, 2019 and 2018, respectively, and are reflected in other current assets with a corresponding liability in policyholders’ funds.

Policyholders’ funds liabilities that are expected to be paid within twelve months from the balance sheet date are classified as current on the consolidated balance sheets. Policyholders’ funds liabilities that are expected to be paid greater than twelve months from the balance sheet date are included in other long-term liabilities on the consolidated balance sheets.

Self-Insurance Liabilities

The Company is self-insured for certain losses related to general liability, workers’ compensation and auto liability. The Company obtains third party insurance coverage to limit exposure from these claims. The Company is also self-insured for certain losses related to health and medical liabilities. The Company’s self-insurance accruals, which include reported claims and claims incurred but not reported, are calculated using standard insurance industry actuarial assumptions and the Company’s historical claims experience. At December 31, 2019 and 2018, self-insurance liabilities totaled $856 million and $865 million, respectively, and were recorded as accrued expenses on the consolidated balance sheets.

Foreign Currency Translation and Transactions

For non-U.S. dollar functional currency locations, (i) assets and liabilities are translated at end-of-period exchange rates, (ii) revenues and expenses are translated at average exchange rates in effect during the period and (iii) equity is translated at historical exchange rates. The resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income (loss).

For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for nonmonetary balance sheet accounts which are remeasured at historical exchange rates. Revenues and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the nonmonetary balance sheet amounts which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in net income (loss).

On July 1, 2019, the Company sold its Brazilian subsidiary, Drogaria Onofre Ltda. (“Onofre”) for an immaterial amount. The Company recorded a loss on the divestiture, which included the elimination of the subsidiary’s $154 million cumulative translation adjustment from accumulated other comprehensive income. Gains and losses from foreign currency transactions and the effects of foreign currency remeasurements were not material in 2018 or 2017.

Revenue Recognition

Pharmacy Services Segment

The Pharmacy Services segment sells prescription drugs directly through its mail service dispensing pharmacies and indirectly through the Company’s retail pharmacy network. The Company’s pharmacy benefit arrangements are accounted for in a manner consistent with a master supply arrangement as there are no contractual minimum volumes and each prescription is considered a separate purchasing decision and distinct performance obligation transferred at a point in time. PBM services performed in connection with each prescription claim are considered part of a single performance obligation which culminates in the dispensing of prescription drugs.

The Company recognizes revenue using the gross method at the contract price negotiated with its clients when the Company has concluded it controls the prescription drug before it is transferred to the client plan members. The Company controls prescriptions dispensed indirectly through its retail pharmacy network because it has separate contractual arrangements with those pharmacies, has discretion in setting the price for the transaction and assumes primary responsibility for fulfilling the promise to provide prescription drugs to its client plan members while also performing the related PBM services.

Revenues include (i) the portion of the price the client pays directly to the Company, net of any discounts earned on brand name drugs or other discounts and refunds paid back to the client (see “Drug Discounts” and “Guarantees” below), (ii) the price paid to the Company by client plan members for mail order prescriptions and the price paid to retail network pharmacies by client plan members for retail prescriptions (“retail co-payments”), and (iii) claims based administrative fees for retail pharmacy network contracts. Sales taxes are not included in revenues.

The Company recognizes revenue when control of the prescription drugs is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those prescription drugs. The Company has established the following revenue recognition policies for the Pharmacy Services segment:


•	Revenues generated from prescription drugs sold by mail service dispensing pharmacies are recognized when the prescription drug is delivered to the client plan member. At the time of delivery, the Company has performed substantially all of its performance obligations under its client contracts and does not experience a significant level of returns or reshipments.

•

Revenues generated from prescription drugs sold by third party pharmacies in the Company’s retail pharmacy network and associated administrative fees are recognized at the Company’s point-of-sale, which is when the claim is adjudicated by the Company’s online claims processing system and the Company has transferred control of the prescription drug and performed all of its performance obligations.

For contracts under which the Company acts as an agent or does not control the prescription drugs prior to transfer to the client plan member, revenue is recognized using the net method.

Drug Discounts

The Company records revenue net of manufacturers’ rebates earned by its clients based on their plan members’ utilization of brand-name formulary drugs. The Company estimates these rebates at period-end based on actual and estimated claims data and its estimates of the manufacturers’ rebates earned by its clients. The estimates are based on the best available data at period-end and recent history for the various factors that can affect the amount of rebates due to the client. The Company adjusts its rebates payable to clients to the actual amounts paid when these rebates are paid or as significant events occur. Any cumulative effect of these adjustments is recorded against revenues at the time it is identified. Adjustments generally result from contract changes with clients or manufacturers that have retroactive rebate adjustments, differences between the estimated and actual product mix subject to rebates, or whether the brand name drug was included in the applicable formulary. The effect of adjustments

between estimated and actual manufacturers’ rebate amounts has not been material to the Company’s operating results or financial condition.

Guarantees

The Company also adjusts revenues for refunds owed to clients resulting from pricing guarantees and performance against defined service and performance metrics. The inputs to these estimates are not subject to a high degree of subjectivity or volatility. The effect of adjustments between estimated and actual pricing and performance refund amounts has not been material to the Company’s operating results or financial condition.

Retail/LTC Segment

Retail Pharmacy

The Company’s retail drugstores recognize revenue at the time the customer takes possession of the merchandise. For pharmacy sales, each prescription claim is its own arrangement with the customer and is a performance obligation, separate and distinct from other prescription claims under other retail network arrangements. Revenues are adjusted for refunds owed to third party payers resulting from pricing guarantees and performance against defined value-based service and performance metrics. The inputs to these estimates are not subject to a high degree of subjectivity or volatility. The effect of adjustments between estimated and actual pricing and performance refund amounts has not been material to the Company’s operating results or financial condition.

Revenue from Company gift cards purchased by customers is deferred as a contract liability until goods or services are transferred. Any amounts not expected to be redeemed by customers (i.e., breakage) are recognized based on historical redemption patterns.

Customer returns are not material to the Company’s operating results or financial condition. Sales taxes are not included in revenues.

Loyalty and Other Programs

The Company’s customer loyalty program, ExtraCare^®, consists of two components, ExtraSavings^TM and ExtraBucks^® Rewards. ExtraSavings are coupons that are recorded as a reduction of revenue when redeemed as the Company concluded that they do not represent a promise to the customer to deliver additional goods or services at the time of issuance because they are not tied to a specific transaction or spending level.

ExtraBucks Rewards are accumulated by customers based on their historical spending levels. Thus, the Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the ExtraBucks Rewards transaction based upon the relative standalone selling price, which considers historical redemption patterns for the rewards. Revenue allocated to ExtraBucks Rewards is recognized as those rewards are redeemed. At the end of each period, unredeemed ExtraBucks Rewards are reflected as a contract liability.

The Company also offers a subscription-based membership program, CarePass^®, under which members are entitled to a suite of benefits delivered over the course of the subscription period, as well as a promotional reward that can be redeemed for future goods and services. Subscriptions are paid for on a monthly or annual basis at the time of or in advance of the Company delivering the goods and services. Revenue from these arrangements is recognized as the performance obligations are satisfied.

Long-term Care

Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. Each prescription claim represents a separate performance obligation of the Company, separate and distinct from other prescription claims under customer arrangements. A significant portion of Long-term Care revenue from sales of pharmaceutical and medical products is reimbursed by the federal Medicare Part D program and, to a lesser extent, state Medicaid programs. The Company monitors its revenues and receivables from these reimbursement sources, as well as long-term care facilities and other third party insurance payors, and reduces revenue at the revenue recognition date to properly account for the variable consideration due to anticipated differences between billed and reimbursed amounts. Accordingly, the total revenues and receivables reported in the Company’s consolidated financial statements are recorded at the amount expected to be ultimately received from these payors.

Patient co-payments associated with Medicare Part D, certain state Medicaid programs, Medicare Part B and certain third party payors typically are not collected at the time products are delivered or services are rendered, but are billed to the individuals as part of normal billing procedures and subject to normal accounts receivable collections procedures.

Walk-In Medical Clinics

For services provided by the Company’s walk-in medical clinics, revenue recognition occurs for completed services provided to patients, with adjustments taken for third party payor contractual obligations and patient direct bill historical collection rates.

Health Care Benefits Segment

Health Care Benefits revenue is principally derived from insurance premiums and fees billed to customers. Revenue is recognized based on customer billings, which reflect contracted rates per employee and the number of covered employees recorded in the Company’s records at the time the billings are prepared. Billings are generally sent monthly for coverage during the following month.

The Company’s billings may be subsequently adjusted to reflect enrollment changes due to member terminations or other factors. These adjustments are known as retroactivity adjustments. In each period, the Company estimates the amount of future retroactivity and adjusts the recorded revenue accordingly. As information regarding actual retroactivity amounts becomes known, the Company refines its estimates and records any required adjustments to revenues in the period in which they arise.

Premium Revenue

Premiums are recognized as revenue in the month in which the enrollee is entitled to receive health care services. Premiums are reported net of an allowance for estimated terminations and uncollectible amounts. Additionally, premium revenue subject to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010’s (as amended, collectively, the “ACA’s”) minimum medical loss ratio (“MLR”) rebate requirements is recorded net of the estimated minimum MLR rebates for the current calendar year. Premiums related to unexpired contractual coverage periods (unearned premiums) are reported as other insurance liabilities on the consolidated balance sheets and recognized as revenue when earned.

Some of the Company’s contracts allow for premiums to be adjusted to reflect actual experience or the relative health status of Insured members. Such adjustments are reasonably estimable at the outset of the contract, and adjustments to those estimates are made based on actual experience of the customer emerging under the contract and the terms of the underlying contract.

Services Revenue

Services revenue relates to contracts that can include various combinations of services or series of services which generally are capable of being distinct and accounted for as separate performance obligations. The Health Care Benefits segment’s services revenue primarily consists of the following components:

•

ASC fees are received in exchange for performing certain claim processing and member services for ASC members. ASC fee revenue is recognized over the period the service is provided. Some of the Company’s administrative services contracts include guarantees with respect to certain functions, such as customer service response time, claim processing accuracy and claim processing turnaround time, as well as certain guarantees that a plan sponsor’s benefit claim experience will fall within a certain range. With any of these guarantees, the Company is financially at risk if the conditions of the arrangements are not met, although the maximum amount at risk typically is limited to a percentage of the fees otherwise payable to the Company by the customer involved. Each period the Company estimates its obligations under the terms of these guarantees and records its estimate as an offset to services revenues.


•	Workers’ compensation administrative services consist of fee-based managed care services. Workers’ compensation administrative services revenue is recognized once the service is provided.

Accounting for Medicare Part D

Revenues include insurance premiums earned by the Company’s PDPs, which are determined based on the PDP’s annual bid and related contractual arrangements with the U.S. Centers for Medicare & Medicaid Services (“CMS”). The insurance premiums include a beneficiary premium, which is the responsibility of the PDP member, and can be subsidized by CMS in the case of low-income members, and a direct premium paid by CMS. Premiums collected in advance are initially recorded within other insurance liabilities and are then recognized ratably as revenue over the period in which members are entitled to receive benefits.

Revenues also include a risk-sharing feature of the Medicare Part D program design referred to as the risk corridor. The Company estimates variable consideration in the form of amounts payable to, or receivable from, CMS under the risk corridor, and adjusts revenue based on calculations of additional subsidies to be received from or owed to CMS at the end of the reporting year.

In addition to Medicare Part D premiums, the Company receives additional payments each month from CMS related to catastrophic reinsurance, low-income cost sharing subsidies and coverage gap benefits. If the subsidies received differ from the

amounts earned from actual prescriptions transferred, the difference is recorded in either accounts receivable, net or accrued expenses.

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source in each segment for the years ended December 31, 2019 and 2018:



In millions	Pharmacy Services		Retail/ LTC		Health Care Benefits		Corporate/ Other		Intersegment Eliminations			Consolidated Totals
2019
Major goods/services lines:
Pharmacy	$	140,896	$	66,442	$	—	$	—	$	(41,439	)	$	165,899
Front Store	—		19,422		—		—		—			19,422
Premiums	—		—		63,031		91		—			63,122
Net investment income	—		—		599		412		—			1,011
Other	595		744		5,974		9		—			7,322
Total	$	141,491	$	86,608	$	69,604	$	512	$	(41,439	)	$	256,776

Pharmacy Services distribution channel:
Pharmacy network⁽¹⁾	$	88,755
Mail choice ⁽²⁾	52,141
Other	595
Total	$	141,491

2018
Major goods/services lines:
Pharmacy	$	134,216	$	64,179	$	164	$	—	$	(33,714	)	$	164,845
Front Store	—		19,055		—		—		—			19,055
Premiums	—		—		8,180		4		—			8,184
Net investment income	—		—		58		602		—			660
Other	520		755		560		—		—			1,835
Total	$	134,736	$	83,989	$	8,962	$	606	$	(33,714	)	$	194,579

Pharmacy Services distribution channel:
Pharmacy network^{(1) (3)}	$	87,167
Mail choice ^{(2) (3)}	47,049
Other	520
Total	$	134,736

^{_____________________________________________}

(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 Choiceprogram.


(3)	Certain prior year amounts have been reclassified for consistency with the current period presentation.

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 ExtraBucksRewards 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 as of December 31, 2019 and 2018:



In millions	2019		2018
Trade receivables (included in accounts receivable, net)	$	6,717	$	6,497
Contract liabilities (included in accrued expenses)	73		67

During the year ended December 31, 2019, 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:



In millions	2019			2018
Balance at December 31, 2018	$	67		$	53
Adoption of ASU 2014-09	—			17
Rewards earnings and gift card issuances	365			332
Redemption and breakage	(359		)	(335		)
Balance at December 31, 2019	$	73		$	67

Cost of Products Sold

The Company accounts for cost of products sold as follows:

Pharmacy Services Segment

Cost of products sold includes: (i) the cost of prescription drugs sold during the reporting period directly through the Company’s mail service dispensing pharmacies and indirectly through the Company’s retail pharmacy network, (ii) shipping and handling costs, and (iii) the operating costs of the Company’s mail service dispensing pharmacies and client service operations and related information technology support costs including depreciation and amortization. The cost of prescription drugs sold component of cost of products sold includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients’ benefit plans from the Company’s mail service dispensing pharmacies, net of any volume-related or other discounts (see “Vendor Allowances and Purchase Discounts” below) and (ii) the cost of prescription drugs sold (including retail co-payments) through the Company’s retail pharmacy network under contracts where the Company is the principal, net of any volume-related or other discounts.

Retail/LTC Segment

Cost of products sold includes: the cost of merchandise sold during the reporting period, including prescription drug costs, and the related purchasing costs, warehousing and delivery costs (including depreciation and amortization) and actual and estimated inventory losses.

Vendor Allowances and Purchase Discounts

The Company accounts for vendor allowances and purchase discounts as follows:

Pharmacy Services Segment

The Pharmacy Services segment receives purchase discounts on products purchased. Contractual arrangements with vendors, including manufacturers, wholesalers and retail pharmacies, normally provide for the Pharmacy Services segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, (ii) a discount for the prompt payment of invoices or (iii) when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy), a discount (or rebate) paid subsequent to dispensing. These rebates are recognized when prescriptions are dispensed and are generally calculated and billed to manufacturers within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Company’s operating results or financial condition. The Company accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services segment also receives additional discounts under its wholesaler contracts if it exceeds contractually defined purchase volumes. In addition, the Pharmacy Services segment receives fees from pharmaceutical

manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of products sold.

Retail/LTC Segment

Vendor allowances received by the Retail/LTC segment reduce the carrying cost of inventory and are recognized in cost of products sold when the related inventory is sold, unless they are specifically identified as a reimbursement of incremental costs for promotional programs and/or other services provided. Amounts that are directly linked to advertising commitments are recognized as a reduction of advertising expense (included in operating expenses) when the related advertising commitment is satisfied. Any such allowances received in excess of the actual cost incurred also reduce the carrying cost of inventory. The total value of any upfront payments received from vendors that are linked to purchase commitments is initially deferred. The deferred amounts are then amortized to reduce cost of products sold over the life of the contract based upon purchase volume. The total value of any upfront payments received from vendors that are not linked to purchase commitments is also initially deferred. The deferred amounts are then amortized to reduce cost of products sold on a straight-line basis over the life of the related contract. The total amortization of these upfront payments was not material to the Company’s consolidated financial statements in any of the periods presented.

Health Care Reform

Health Insurer Fee

Since January 1, 2014, the ACA imposes an annual premium-based health insurer fee (“HIF”) for each calendar year payable in September which is not deductible for tax purposes. The Company is required to estimate a liability for the HIF at the beginning of the calendar year in which the fee is payable with a corresponding deferred asset that is amortized ratably to operating expenses over the calendar year. The Company records the liability for the HIF in accrued expenses and records the deferred asset in other current assets. There was no expense related to the HIF in 2019 and 2017, since the HIF was temporarily suspended for each of those periods. In 2018, operating expenses included $157 million related to the Company’s share of the HIF. The HIF applies for 2020, and in December 2019, the HIF was repealed for calendar years after 2020.

Risk Adjustment

The ACA established a permanent risk adjustment program to transfer funds from qualified individual and small group insurance plans with below average risk scores to plans with above average risk scores. Based on the risk of the Company’s qualified plan members relative to the average risk of members of other qualified plans in comparable markets, as defined by the ACA, the Company estimates its ultimate risk adjustment receivable (recorded in accounts receivable) or payable (recorded in accrued expenses) for the current calendar year and reflects the pro-rata year-to-date impact as an adjustment to premium revenue.

Advertising Costs

Advertising costs, which are reduced by the portion funded by vendors, are expensed when the related advertising takes place. Net advertising costs, which are included in operating expenses, were $396 million, $364 million and $230 million in 2019, 2018 and 2017, respectively.

Stock-Based Compensation

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the applicable requisite service period of the stock award (generally 3 to 5 years) using the straight-line method.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year or years in which the differences are expected to reverse. The effect of a change in the tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date of such change.

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. Among numerous changes to existing tax laws, the TCJA permanently reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effects of changes in tax rates on deferred tax balances are required to be taken into consideration in the period in which the changes are

enacted, regardless of when they are effective. As a result of the reduction of the corporate income tax rate under the TCJA, the Company estimated the revaluation of its net deferred tax liabilities and recorded a provisional income tax benefit of approximately $1.5 billion for year ended December 31, 2017. In 2018, the Company completed its process of determining the TCJA’s final impact and recorded an additional income tax benefit of $100 million.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the Company’s recent operating results. The Company establishes a valuation allowance when it does not consider it more likely than not that a deferred tax asset will be recovered.

The Company records uncertain tax positions on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Interest and/or penalties related to uncertain tax positions are recognized in the income tax provision.

Measurement of Defined Benefit Pension and Other Postretirement Employee Benefit Plans

The Company sponsors defined benefit pension plans (“pension plans”) and other postretirement employee benefit plans (“OPEB plans”) for its employees and retirees. The Company recognizes the funded status of its pension and OPEB plans on the consolidated balance sheets based on the year-end measurements of plan assets and benefit obligations. When the fair value of plan assets are in excess of the plan benefit obligations, the amounts are reported in other current assets and other assets. When the fair value of plan benefit obligations are in excess of plan assets, the amounts are reported in accrued expenses and other long-term liabilities based on the amount by which the actuarial present value of benefits payable in the next twelve months included in the benefit obligation exceeds the fair value of plan assets. The net periodic benefit costs for the Company’s pension and OPEB plans do not contain a service cost component as these plans have been frozen for an extended period of time. Non-service cost components of pension and postretirement benefit cost are included in other expense (income) in the consolidated statements of operations.

Earnings (Loss) per Common Share

Earnings (loss) per share is computed using the two-class method. The Company calculates basic earnings (loss) per share based on the weighted average number of common shares outstanding for the period. See Note 14 ‘‘Earnings (Loss) Per Share’’ for additional information.

Shares Held in Trust

The Company maintains grantor trusts, which held approximately one million shares of its common stock at both December 31, 2019 and 2018. These shares are designated for use under various employee compensation plans. Since the Company holds these shares, they are excluded from the computation of basic and diluted shares outstanding.

Variable Interest Entities

The Company has investments in (i) a generic pharmaceutical sourcing entity, (ii) certain hedge fund and private equity investments and (iii) certain real estate partnerships that are considered VIE’s. The Company does not have a future obligation to fund losses or debts on behalf of these investments; however, it may voluntarily contribute funds. In evaluating whether the Company is the primary beneficiary of a VIE, the Company considers several factors, including whether the Company has (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE.

Variable Interest Entities - Primary Beneficiary

In 2014, the Company and Cardinal Health, Inc. (“Cardinal”) established Red Oak Sourcing, LLC (“Red Oak”), a generic pharmaceutical sourcing entity in which the Company and Cardinal each own 50%. The Red Oak arrangement has an initial term of 10 years. Under this arrangement, the Company and Cardinal contributed their sourcing and supply chain expertise to Red Oak and agreed to source and negotiate generic pharmaceutical supply contracts for both companies through Red Oak; however, Red Oak does not own or hold inventory on behalf of either company. No physical assets (e.g., property and

equipment) were contributed to Red Oak by either company, and minimal funding was provided to capitalize Red Oak. The Company has determined that it is the primary beneficiary of this VIE because it has the ability to direct the activities of Red Oak. Consequently, the Company consolidates Red Oak in its consolidated financial statements within the Retail/LTC segment.

Cardinal is required to pay the Company 39 quarterly payments beginning in October 2014. As milestones are met, the quarterly payments increase. The Company received from Cardinal $183 million during each of the years ended December 31, 2019, 2018 and 2017. The payments reduce the Company’s carrying value of inventory and are recognized in cost of products sold when the related inventory is sold. Revenues associated with Red Oak expenses reimbursed by Cardinal for the years ended December 31, 2019, 2018 and 2017, and amounts due to or due from Cardinal at December 31, 2019 and 2018 were immaterial.

Variable Interest Entities - Other Variable Interest Holder

The Company has invested in certain VIEs for which it has determined that it is not the primary beneficiary, consisting of the following:


•	Hedge fund and private equity investments - The Company invests in hedge fund and private equity investments in order to generate investment returns for its investment portfolio supporting its insurance businesses.


•	Real estate partnerships - The Company invests in various real estate partnerships, including those that construct, own and manage low-income housing developments. For the low income housing development investments, substantially all of the projected benefits to the Company are from tax credits and other tax benefits.

The Company is not the primary beneficiary of these VIEs because the nature of the Company’s involvement with the activities of these VIEs does not give the Company the power to direct the activities that most significantly impact their economic performance. The Company records the amount of its investment in these VIEs as long-term investments on the consolidated balance sheets and recognizes its share of each VIE’s income or losses in net income (loss). The Company’s maximum exposure to loss from these VIEs is limited to its investment balances as disclosed below and the risk of recapture of previously recognized tax credits related to the real estate partnerships, which the Company does not consider significant.

The total amount of other variable interest holder VIE assets included in long-term investments on the consolidated balance sheets at December 31, 2019 and 2018 was as follows:



In millions	2019		2018
Hedge fund investments	$	271	$	270
Private equity investments	538		524
Real estate partnerships	212		275
Total	$	1,021	$	1,069

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 $32 million, $45 million and $35 million in the years ended December 31, 2019, 2018 and 2017, 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 (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $96 million, $135 million and $139 million for pharmaceutical inventory purchases during the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, the Company performs certain collection functions for Heartland and then passes those customer cash collections back to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

During the year ended December 31, 2019, the Company made a charitable contribution of $30 million to the CVS Health Foundation, a non-profit entity that focuses on health, education and community involvement programs. The charitable contribution will fund future charitable giving and was recorded as an operating expense in the consolidated statement of operations for the year ended December 31, 2019.

Discontinued Operations

In connection with certain business dispositions completed between 1995 and 1997, the Company retained guarantees on store lease obligations for a number of former subsidiaries, including Linens ‘n Things and Bob’s Stores, each of which subsequently filed for bankruptcy. The Company’s loss from discontinued operations primarily includes lease-related costs that the Company believes it will likely be required to satisfy pursuant to its Linens ‘n Things and Bob’s Stores lease guarantees. See “Lease Guarantees” in Note 16 ‘‘Commitments and Contingencies’’ for more information.

Results from discontinued operations were immaterial for the years ended December 31, 2019 and 2018. Below is a summary of the results of discontinued operations for the year ended December 31, 2017:



In millions	2017
Loss from discontinued operations	$	(13	)
Income tax benefit	5
Loss from discontinued operations, net of tax	$	(8	)

New Accounting Pronouncements Recently Adopted

Leases

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (Topic 842). Under this accounting standard, lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard), while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). Lessor accounting is similar to the prior model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue recognition standard that was adopted in 2018.

The Company adopted this new accounting standard on January 1, 2019 on a modified retrospective basis and applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. On January 1, 2019, the Company recorded an after-tax transition adjustment to increase retained earnings by approximately $178 million ($241 million prior to tax effect). The new standard had a material impact on the Company’s consolidated balance sheet, but did not materially impact the Company’s consolidated operating results and had no impact on the Company’s cash flows.

Impact of New Lease Standard on Balance Sheet Line Items

As a result of applying the new lease accounting standard using a modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of January 1, 2019:



	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2018		Adjustments			As Adjusted January 1, 2019
Consolidated Balance Sheets:
Other current assets	$	4,581	$	(48	)	$	4,533
Total current assets	45,243		(48		)	45,195
Property and equipment, net	11,349		11			11,360
Operating lease right-of-use assets	—		20,987			20,987
Intangible assets, net	36,524		(217		)	36,307
Other assets	5,046		(521		)	4,525
Total assets	196,456		20,212			216,668
Accrued expenses	10,711		(52		)	10,659
Current portion of operating lease liabilities	—		1,803			1,803
Current portion of long-term debt	1,265		2			1,267
Total current liabilities	44,009		1,753			45,762
Long-term operating lease liabilities	—		18,832			18,832
Long-term debt	71,444		(96		)	71,348
Deferred income taxes	7,677		63			7,740
Other long-term liabilities	2,780		(518		)	2,262
Total liabilities	137,913		20,034			157,947
Retained earnings	40,911		178			41,089
Total CVS Health shareholders’ equity	58,225		178			58,403
Total shareholders’ equity	58,543		178			58,721

Accounting for Interest Associated with the Purchase of Callable Debt Securities

In March 2017, the FASB issued ASU 2017-08, Accounting for Interest Associated with the Purchase of Callable Debt Securities (Topic 310). Under this standard, premiums on callable debt securities are amortized to the earliest call date rather than to the contractual maturity date. Callable debt securities held at a discount will continue to be amortized to the contractual maturity date. The Company adopted this new accounting standard on January 1, 2019 on a modified retrospective basis and recorded an immaterial cumulative effect adjustment from accumulated other comprehensive income to retained earnings on the consolidated balance sheet.

New Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). This standard requires the use of a forward-looking expected credit loss impairment model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded through an allowance account and revises certain disclosure requirements. The Company adopted this new accounting standard on January 1, 2020. The Company adopted the credit loss impairment model on a modified retrospective basis and recorded an immaterial cumulative effect adjustment to retained earnings as of the adoption date. The Company adopted the available-for-sale debt security impairment model on a prospective basis. The adoption of this standard did not have a material impact on the Company’s consolidated operating results, cash flows or financial condition.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and other - Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This standard requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Topic 350-40 to determine which implementation costs to capitalize as assets. The Company adopted this new

accounting guidance on January 1, 2020 on a prospective basis. The implementation of this standard is not expected to have a material impact on the Company’s consolidated operating results, cash flows, financial condition or related disclosures.

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the FASB issued ASU 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 (loss). 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, 2021. The Company is currently evaluating the effect that implementation of this standard will have on the Company’s consolidated operating results, cash flows, financial condition and related disclosures.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the effect that implementation of this standard will have on the Company’s consolidated operating results, cash flows, financial condition and related disclosures.

Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisition of Aetna

On the Aetna Acquisition Date, the Company acquired 100% of the outstanding shares and voting interests of Aetna for a combination of cash and stock. Under the terms of the merger agreement, Aetna shareholders received $145.00 in cash and 0.8378 CVS Health shares for each Aetna share. The transaction valued Aetna at approximately $212 per share or approximately $70 billion. Including the assumption of Aetna’s debt, the total value of the transaction was approximately $78 billion. The Company financed the cash portion of the purchase price through a combination of cash on hand and by issuing approximately $45 billion of new debt, including senior notes and term loans. The Company acquired Aetna to help improve the consumer health care experience by combining Aetna’s health care benefits products and services with CVS Health’s approximately 9,900 retail locations, approximately 1,100 walk-in medical clinics and integrated pharmacy capabilities with the goal of becoming the new, trusted front door to health care.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values at the date of acquisition. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:



In millions
Cash and cash equivalents	$	6,565
Accounts receivable	4,094
Other current assets	3,894
Investments (current and long-term)	17,984
Goodwill	47,755
Intangible assets	22,571
Other assets	8,249
Total assets acquired	111,112
Health care costs payable	5,302
Other current liabilities	9,940
Debt (current and long-term)	8,098
Deferred income taxes	4,608
Other long-term liabilities	13,078
Total liabilities assumed	41,026
Noncontrolling interests	320
Total consideration transferred	$	69,766

The Company’s assessment of the fair value of assets acquired and liabilities assumed was finalized during the fourth quarter of 2019. Measurement period adjustments to assets acquired and liabilities assumed during the year ended December 31, 2019 primarily were due to additional information received related to certain intangible asset valuations and contingencies and the related impact on the accounting for income taxes and goodwill. There were no material income statement measurement period adjustments recorded during the year ended December 31, 2019.

Consolidated Results of Operations

The Company’s consolidated operating results for the year ended December 31, 2018, included $5.6 billion of revenues and $146 million of income before income tax provision associated with the operating results of Aetna from the Aetna Acquisition Date to December 31, 2018.

During the years ended December 31, 2018 and 2017, the Company incurred transaction costs of $147 million and $34 million, respectively, associated with the Aetna Acquisition that were recorded within operating expenses.

Unaudited Pro Forma Financial Information

The following unaudited pro forma information presents a summary of the Company’s combined operating results for the years ended December 31, 2018 and 2017 as if the Aetna acquisition and the related financing transactions had occurred on January 1, 2017. The following pro forma financial information is not necessarily indicative of the Company’s operating results as they

would have been had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including differences between the assumptions used to prepare the pro forma financial information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.



	Year Ended December 31,
In millions, except per share data	2018		2017
Total revenues	$	243,232	$	236,000
Income from continuing operations	1,152		6,813
Basic earnings per share from continuing operations attributable to CVS Health	$	0.89	$	5.25
Diluted earnings per share from continuing operations attributable to CVS Health	$	0.88	$	5.21

The pro forma results for the years ended December 31, 2018 and 2017 include adjustments related to the following purchase accounting and acquisition-related items:


•	Elimination of intercompany transactions between CVS Health and Aetna;


•	Elimination of estimated foregone interest income associated with (i) cash assumed to have been used to partially fund the Aetna Acquisition and (ii) adjusting the amortized cost of Aetna’s investment portfolio to fair value as of the completion of the Aetna Acquisition;


•	Elimination of historical intangible asset, deferred acquisition cost and capitalized software amortization expense and addition of amortization expense based on the values of identified intangible assets;


•	Additional interest expense from (i) the long-term debt issued to partially fund the Aetna Acquisition and (ii) the amortization of the fair value adjustment to assumed long-term debt.


•	Additional depreciation expense related to the adjustment of Aetna’s property and equipment to fair value;


•	Adjustments to align CVS Health’s and Aetna’s accounting policies;


•	Elimination of transaction related costs; and


•	Tax effects of the adjustments noted above.

Divestiture of Brazilian Subsidiary

On July 1, 2019, the Company sold its Brazilian subsidiary, Onofre, for an immaterial amount. Onofre operated 50 retail pharmacy stores, the results of which historically had been reported within the Retail/LTC segment. The Company recorded a pre-tax loss on the divestiture of $205 million in the year ended December 31, 2019, which primarily relates to the elimination of the cumulative translation adjustment from accumulated other comprehensive income and is reflected in operating expenses in the Company’s consolidated statements of operations within the Retail/LTC segment.

Divestiture of RxCrossroads Subsidiary

On January 2, 2018, the Company sold its RxCrossroads subsidiary, the results of which had historically been reported within the Retail/LTC segment, to McKesson Corporation for $725 million. The Company recorded a pre-tax loss on the divestiture of $86 million in the year ended December 31, 2018 and transaction costs associated with the sale of $9 million in the year ended December 31, 2017, each of which were reflected in operating expenses in the Company’s consolidated statements of operations within the Retail/LTC segment.

Investments

12 Months Ended

Dec. 31, 2019

Investments [Abstract]

Investments

Total investments at December 31, 2019 and 2018 were as follows:



	2019						2018
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,251	$	14,671	$	16,922	$	2,359	$	12,896	$	15,255
Mortgage loans	122		1,091		1,213		145		1,216		1,361
Other investments	—		1,552		1,552		18		1,620		1,638
Total investments	$	2,373	$	17,314	$	19,687	$	2,522	$	15,732	$	18,254

At December 31, 2019 and 2018, the Company held investments of $537 million and $531 million, respectively, related to the 2012 conversion of an existing group annuity contract from a participating to a non-participating contract. The conversion occurred prior to the Aetna Acquisition. These investments are included in the total investments of large case pensions supporting non-experience-rated products. Although these investments are not accounted for as Separate Accounts assets, they are legally segregated and are not subject to claims that arise out of the Company’s business and only support future policy benefits obligations under that group annuity contract.

Debt Securities

Debt securities available for sale at December 31, 2019 and 2018 were as follows:



In millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2019
Debt securities:
U.S. government securities	$	1,791	$	62	$	(1	)	$	1,852
States, municipalities and political subdivisions	2,202		108		(1		)	2,309
U.S. corporate securities	7,167		573		(3		)	7,737
Foreign securities	2,149		200		(1		)	2,348
Residential mortgage-backed securities	508		25		—			533
Commercial mortgage-backed securities	654		46		—			700
Other asset-backed securities	1,397		13		(5		)	1,405
Redeemable preferred securities	30		8		—			38
Total debt securities ⁽¹⁾	$	15,898	$	1,035	$	(11	)	$	16,922

December 31, 2018
Debt securities:
U.S. government securities	$	1,662	$	26	$	—		$	1,688
States, municipalities and political subdivisions	2,370		30		(1		)	2,399
U.S. corporate securities	6,444		61		(16		)	6,489
Foreign securities	2,355		31		(3		)	2,383
Residential mortgage-backed securities	567		10		—			577
Commercial mortgage-backed securities	594		11		—			605
Other asset-backed securities	1,097		3		(15		)	1,085
Redeemable preferred securities	30		—		(1		)	29
Total debt securities ⁽¹⁾	$	15,119	$	172	$	(36	)	$	15,255

^{_____________________________________________}

(1)

Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At December 31, 2019, debt securities with a fair value of $965 million, gross unrealized capital gains of $83 million and no gross unrealized capital losses, and at December 31, 2018, debt securities with a fair value of $916 million, gross unrealized capital gains of $12 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.

The amortized cost and fair value of debt securities at December 31, 2019 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	Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,028	$	1,034
One year through five years	5,507		5,702
After five years through ten years	3,081		3,296
Greater than ten years	3,723		4,252
Residential mortgage-backed securities	508		533
Commercial mortgage-backed securities	654		700
Other asset-backed securities	1,397		1,405
Total	$	15,898	$	16,922

Mortgage-Backed and Other Asset-Backed Securities

All of the Company’s residential mortgage-backed securities at December 31, 2019 were issued by the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and carry agency guarantees and explicit or implicit guarantees by the U.S. Government. At December 31, 2019, the Company’s residential mortgage-backed securities had an average credit quality rating of AAA and a weighted average duration of 3.3 years.

The Company’s commercial mortgage-backed securities have underlying loans that are dispersed throughout the United States. Significant market observable inputs used to value these securities include loss severity and probability of default. At December 31, 2019, these securities had an average credit quality rating of AAA and a weighted average duration of 6.1 years.

The Company’s other asset-backed securities have a variety of underlying collateral (e.g., automobile loans, credit card receivables, home equity loans and commercial loans). Significant market observable inputs used to value these securities include the unemployment rate, loss severity and probability of default. At December 31, 2019, these securities had an average credit quality rating of AA and a weighted average duration of 1.2 years.

Summarized below are the debt securities the Company held at December 31, 2019 and 2018 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
December 31, 2019
Debt securities:
U.S. government securities	52	$	168	$	1	—	$	—	$	—	52	$	168	$	1
States, municipalities and political subdivisions	66	115		1		2	5		—		68	120		1
U.S. corporate securities	181	305		2		2	—		1		183	305		3
Foreign securities	39	75		1		—	—		—		39	75		1
Residential mortgage-backed securities	30	16		—		9	—		—		39	16		—
Commercial mortgage-backed securities	16	49		—		—	—		—		16	49		—
Other asset-backed securities	138	254		1		187	182		4		325	436		5
Total debt securities	522	$	982	$	6	200	$	187	$	5	722	$	1,169	$	11

December 31, 2018
Debt securities:
U.S. government securities	8	$	26	$	—	—	$	—	$	—	8	$	26	$	—
States, municipalities and political subdivisions	54	86		1		—	—		—		54	86		1
U.S. corporate securities	1,399	1,431		16		—	—		—		1,399	1,431		16
Foreign securities	243	314		3		—	—		—		243	314		3
Residential mortgage-backed securities	45	1		—		—	—		—		45	1		—
Other asset-backed securities	516	528		15		—	—		—		516	528		15
Redeemable preferred securities	14	23		1		—	—		—		14	23		1
Total debt securities	2,279	$	2,409	$	36	—	$	—	$	—	2,279	$	2,409	$	36

The Company reviewed the securities in the tables 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. As of December 31, 2019, 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. Since Aetna’s investment portfolio was measured at fair value as of the Aetna Acquisition Date, each of the securities as of December 31, 2018 were in an unrealized loss position for less than 12 months.

The maturity dates for debt securities in an unrealized capital loss position at December 31, 2019 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	$	—	$	—	$	12	$	—	$	12	$	—
One year through five years	3		—		285		1		288		1
After five years through ten years	9		—		151		2		160		2
Greater than ten years	11		—		197		3		208		3
Residential mortgage-backed securities	—		—		16		—		16		—
Commercial mortgage-backed securities	—		—		49		—		49		—
Other asset-backed securities	10		—		426		5		436		5
Total	$	33	$	—	$	1,136	$	11	$	1,169	$	11

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During 2019 and subsequent to the Aetna Acquisition Date in 2018, the Company had the following activity in its mortgage loan portfolio:



In millions	2019		2018
New mortgage loans	$	131	$	4
Mortgage loans fully-repaid	234		27
Mortgage loans foreclosed	—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and annually assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, 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 upon the Company’s assessments at December 31, 2019 and 2018, the Company’s mortgage loans were given the following credit quality indicators:



In millions, except credit ratings indicator	2019		2018
1	$	58	$	42
2 to 4	1,143		1,301
5 and 6	12		18
7	—		—
Total	$	1,213	$	1,361

At December 31, 2019 scheduled mortgage loan principal repayments were as follows:



In millions
2020	$	122
2021	235
2022	200
2023	81
2024	193
Thereafter	382
Total	$	1,213

Net Investment Income

Sources of net investment income for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Debt securities	$	589		$	61
Mortgage loans	71			6
Other investments	194			593
Gross investment income	854			660
Investment expenses	(42		)	(3		)
Net investment income (excluding net realized capital gains or losses)	812			657
Net realized capital gains ⁽¹⁾	199			3
Net investment income ⁽²⁾	$	1,011		$	660

^{_____________________________________________}


(1)	Net realized capital gains are net of other-than-temporary impairment (“OTTI”) losses on debt securities recognized in the consolidated statements of operations of $24 million for the year ended December 31, 2019. There were no material OTTI losses on debt securities for the year ended December 31, 2018.


(2)	Net investment income includes $44 million and $4 million for 2019 and 2018, respectively, related to investments supporting experience-rated products.

The Company’s net investment income was $21 million in 2017, relating to interest income on cash equivalents and debt securities. The Company did not have any material realized capital gains or losses during 2017.

Capital gains and losses recognized during the year ended December 31, 2019 related to investments in equity securities held as of December 31, 2019 were not material.

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 in the year ended December 31, 2019 and subsequent to the Aetna Acquisition Date in 2018 were as follows:



In millions	2019			2018
Proceeds from sales	$	4,773		$	389
Gross realized capital gains	146			2
Gross realized capital losses	(17		)	(2		)

Fair Value

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value

The preparation of the Company’s 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. In this note, the Company provides details on the fair value of financial assets and liabilities and how it determines those fair values. The Company presents this information for those financial instruments that are measured at fair value for which the change in fair value impacts net income (loss) attributable to CVS Health or other comprehensive income separately from other financial assets and liabilities.

Financial Instruments Measured at Fair Value on the Consolidated Balance Sheets

Certain of the Company’s financial instruments are measured at fair value on the consolidated balance sheets. The fair values of these instruments are based on valuations that include inputs that can be 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.

Financial assets and liabilities are classified based upon the lowest level of input that is significant to the valuation. When quoted prices in active markets for identical assets and liabilities are available, the Company uses these quoted market prices to determine the fair value of financial assets and liabilities and classifies these assets and liabilities in Level 1. In other cases where a quoted market price for identical assets and liabilities in an active market is either not available or not observable, the Company estimates fair value using valuation methodologies based on available and observable market information or by using a matrix pricing model. These financial assets and liabilities are classified in Level 2. If quoted market prices are not available, the Company determines fair value using broker quotes or an internal analysis of each investment’s financial performance and cash flow projections. Thus, financial assets and liabilities may be classified in Level 3 even though there may be some significant inputs that may be observable.

The following is a description of the valuation methodologies used for the Company’s financial assets and liabilities that are measured at fair value, including the general classification of such assets and liabilities pursuant to the valuation hierarchy.

Cash and Cash Equivalents – The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. When quoted prices are available in an active market, cash equivalents are classified in Level 1 of the fair value hierarchy. Fair values of cash equivalent instruments that do not trade on a regular basis in active markets are classified as Level 2.

Debt Securities – Where quoted prices are available in an active market, debt securities are classified in Level 1 of the fair value hierarchy. The Company’s Level 1 debt securities consist primarily of U.S. Treasury securities.

The fair values of the Company’s Level 2 debt securities are obtained using models, such as matrix pricing, which use quoted market prices of debt securities with similar characteristics or discounted cash flows to estimate fair value. The Company reviews these prices to ensure they are based on observable market inputs that include quoted prices for similar assets in active markets, quoted prices for identical assets in inactive markets and inputs that are observable that are not prices (such as interest rates and credit risks). The Company also reviews the methodologies and the assumptions used to calculate prices from these observable inputs. On a quarterly basis, the Company selects a sample of its Level 2 debt securities’ prices and compares them to prices provided by a secondary source. Variances over a specified threshold are identified and reviewed to confirm the price provided by the primary source represents an appropriate estimate of fair value. In addition, the Company’s internal investment team consistently compares the prices obtained for select Level 2 debt securities to the team’s own independent estimates of fair value for those securities. The Company obtained one price for each of its Level 2 debt securities and did not adjust any of those prices at December 31, 2019 or 2018.

The Company also values certain debt securities using Level 3 inputs. For Level 3 debt securities, fair values are determined by outside brokers or, in the case of certain private placement securities, are priced internally. Outside brokers determine the value of these debt securities through a combination of their knowledge of the current pricing environment and market flows. The Company did not have any broker quoted debt securities at December 31, 2019. The total fair value of broker quoted debt securities at December 31, 2018 was $50 million. The Company obtained one non-binding broker quote for each of these Level 3 debt securities and did not adjust any of those quotes at December 31, 2018. Examples of these broker quoted Level 3 debt securities include certain U.S. and foreign corporate securities and certain of the Company’s commercial mortgage-backed securities as well as other asset-backed securities. For some private placement securities, the Company’s internal staff determines the value of these debt securities by analyzing spreads of corporate and sector indices as well as interest spreads of comparable public

bonds. Examples of these private placement Level 3 debt securities include certain U.S. and foreign securities and certain tax-exempt municipal securities.

Equity Securities – The Company currently has two classifications of equity securities: those that are publicly traded and those that are privately placed. Publicly-traded equity securities are classified in Level 1 because quoted prices are available for these securities in an active market. For privately placed equity securities, there is no active market; therefore, these securities are classified in Level 3 because the Company prices these securities through an internal analysis of each investment’s financial statements and cash flow projections. Significant unobservable inputs consist of earnings and revenue multiples, discount for lack of marketability and comparability adjustments. An increase or decrease in any of these unobservable inputs would result in a change in the fair value measurement, which may be significant.

There were no financial liabilities measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2019 or 2018. Financial assets measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2019 and 2018 were as follows:



In millions	Level 1		Level 2		Level 3		Total
December 31, 2019
Cash and cash equivalents	$	3,397	$	2,286	$	—	$	5,683
Debt securities:
U.S. government securities	1,785		67		—		1,852
States, municipalities and political subdivisions	—		2,309		—		2,309
U.S. corporate securities	—		7,700		37		7,737
Foreign securities	—		2,348		—		2,348
Residential mortgage-backed securities	—		533		—		533
Commercial mortgage-backed securities	—		700		—		700
Other asset-backed securities	—		1,405		—		1,405
Redeemable preferred securities	—		26		12		38
Total debt securities	1,785		15,088		49		16,922
Equity securities	34		—		39		73
Total	$	5,216	$	17,374	$	88	$	22,678

December 31, 2018
Cash and cash equivalents	$	2,619	$	1,440	$	—	$	4,059
Debt securities:
U.S. government securities	1,597		91		—		1,688
States, municipalities and political subdivisions	—		2,399		—		2,399
U.S. corporate securities	—		6,422		67		6,489
Foreign securities	—		2,380		3		2,383
Residential mortgage-backed securities	—		577		—		577
Commercial mortgage-backed securities	—		605		—		605
Other asset-backed securities	—		1,085		—		1,085
Redeemable preferred securities	—		22		7		29
Total debt securities	1,597		13,581		77		15,255
Equity securities	19		—		54		73
Total	$	4,235	$	15,021	$	131	$	19,387

There were no transfers between Levels 1 and 2 during the years ended December 31, 2019 and 2018. The changes in the balances of Level 3 financial assets during 2019 were as follows:



In millions	Foreign securities			U.S. corporate securities			Equity securities			Redeemable preferred securities		Total
Beginning balance	$	3		$	67		$	54		$	7	$	131
Net realized and unrealized capital gains (losses):
Included in earnings	—			(33		)	13			—		(20		)
Included in other comprehensive income	—			18			—			5		23
Purchases	2			3			13			—		18
Sales	—			(6		)	(41		)	—		(47		)
Settlements	(1		)	(12		)	—			—		(13		)
Transfers out of Level 3, net	(4		)	—			—			—		(4		)
Ending balance	$	—		$	37		$	39		$	12	$	88

The total gross transfers into (out of) Level 3 during the year ended December 31, 2019 were as follows:



In millions
Gross transfers into Level 3	$	—
Gross transfers out of Level 3	(4		)
Net transfers out of Level 3	$	(4	)

The increase in the balance of Level 3 financial assets during 2018 relates to investments acquired in the Aetna Acquisition, which occurred on November 28, 2018. There were no transfers into or out of Level 3 subsequent to the Aetna Acquisition Date in 2018.

Financial Instruments Not Measured at Fair Value on the Consolidated Balance Sheets

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the consolidated balance sheets at adjusted cost or contract value at December 31, 2019 and 2018 were as follows:



	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
December 31, 2019
Assets:
Mortgage loans	$	1,213	$	—	$	—	$	1,239	$	1,239
Equity securities ⁽¹⁾	149		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	372		—		—		392		392
Long-term debt	68,480		74,306		—		—		74,306



	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
December 31, 2018
Assets:
Mortgage loans	$	1,361	$	—	$	—	$	1,366	$	1,366
Equity securities ⁽¹⁾	140		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	382		—		—		357		357
Long-term debt	72,709		71,252		—		—		71,252

^{_____________________________________________}


(1)	It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies. See Note 1 ‘‘Significant Accounting Policies’’ for additional information regarding the valuation of cost method investments.

Separate Accounts Measured at Fair Value on the Consolidated Balance Sheets

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. Net investment income and capital gains and losses on Separate Accounts assets accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals, net investment income and realized and unrealized capital gains and losses on Separate Accounts assets are not reflected in the consolidated statements of operations, shareholders’ equity or cash flows.

Separate Accounts assets include debt and equity securities. The valuation methodologies used for these assets are similar to the methodologies described above in this Note 4 ‘‘Fair Value.’’ Separate Accounts assets also include investments in common/collective trusts that are carried at fair value. Common/collective trusts invest in other investment funds otherwise known as the underlying funds. The Separate Accounts’ interests in the common/collective trust funds are based on the fair values of the investments of the underlying funds and therefore are classified in Level 2. The assets in the underlying funds primarily consist of equity securities. Investments in common/collective trust funds are valued at their respective net asset value (“NAV”) per share/unit on the valuation date.

Separate Accounts financial assets at December 31, 2019 and 2018 were as follows:



	December 31, 2019								December 31, 2018
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2	$	143	$	—	$	145	$	2	$	189	$	—	$	191
Debt securities	1,224		2,589		—		3,813		782		2,500		4		3,286
Equity securities	—		2		—		2		—		3		—		3
Common/collective trusts	—		499		—		499		—		404		—		404
Total	$	1,226	$	3,233	$	—	$	4,459	$	784	$	3,096	$	4	$	3,884

During 2019 and 2018, there were no transfers of Separate Accounts financial assets between Levels 1 and 2. During 2019 and 2018, the Company had an immaterial amount of gross transfers of Separate Accounts financial assets into or out of Level 3.

Offsetting Financial Assets and Liabilities

Certain financial assets and liabilities are offset in the Company’s consolidated balance sheets or are subject to master netting arrangements or similar agreements with the applicable counterparty. Financial liabilities subject to offsetting and enforceable master netting arrangements were $3 million as of December 31, 2019. Financial assets subject to offsetting and enforceable master netting arrangements were $13 million as of December 31, 2018.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangibles

Goodwill

Below is a summary of the changes in the carrying amount of goodwill by segment for the years ended December 31, 2019 and 2018:



In millions	Pharmacy Services			Retail/ LTC			Health Care Benefits			Total
Balance at December 31, 2017	$	21,819		$	16,632		$	—		$	38,451
Acquisitions	1,569			735			44,484			46,788
Foreign currency translation adjustments	—			(14		)	—			(14		)
Divestiture of RxCrossroads subsidiary	—			(398		)	—			(398		)
Impairments	—			(6,149		)	—			(6,149		)
Balance at December 31, 2018	23,388			10,806			44,484			78,678
Segment realignment	194			—			(194		)	—
Purchase accounting adjustments	—			—			1,071			1,071
Other	(1		)	1			—			—
Balance at December 31, 2019	$	23,581		$	10,807		$	45,361		$	79,749

Cumulative goodwill impairments were $6.1 billion at both December 31, 2019 and 2018.

The changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 reflect the following activity:

Segment Realignment

During 2019, the Company realigned the composition of its segments to correspond with changes to its operating model and reflect how the CODM reviews information and manages the business as discussed in Note 1 ‘‘Significant Accounting Policies.’’ As a result of this realignment, the Company reallocated the goodwill balance of the Pharmacy Services and Health Care Benefits segments based on a relative fair value approach.

Aetna Acquisition

On November 28, 2018, the Company completed the Aetna Acquisition. The majority of the preliminary valuation of goodwill associated with the Aetna Acquisition was recorded in the Health Care Benefits segment. The Company also allocated a portion of such goodwill to the Retail/LTC and Pharmacy Services segments related to the fair value of identified synergies that are expected to directly benefit those segments. During 2019, the Company finalized its purchase accounting assessment and recorded the applicable measurement period adjustments, including an adjustment to the acquired goodwill. See Note 2 ‘‘Acquisitions and Divestitures’’ for further discussion regarding the Aetna Acquisition.

LTC

During 2018, the LTC reporting unit continued to experience industry-wide challenges that impacted management’s ability to grow the business at the rate that was originally estimated when the Company acquired Omnicare, Inc. (“Omnicare”) and when the 2017 annual goodwill impairment test was performed. Those challenges include lower client retention rates, lower occupancy rates in skilled nursing facilities, the deteriorating financial health of numerous skilled nursing facility customers which resulted in a number of customer bankruptcies in 2018, and continued facility reimbursement pressures. In June 2018, LTC management submitted its initial budget for 2019 and updated the 2018 annual forecast which showed a deterioration in the projected financial results for the remainder of 2018 and in 2019, which also caused management to update its long-term forecast beyond 2019. Based on these updated projections, management determined that there were indicators that the LTC reporting unit’s goodwill may be impaired and, accordingly, management performed an interim goodwill impairment test as of June 30, 2018. The results of that interim impairment test showed that the fair value of the LTC reporting unit was lower than the carrying value, resulting in a $3.9 billion pre-tax goodwill impairment charge in the second quarter of 2018. The fair value of the LTC reporting unit was determined using a combination of a discounted cash flow method and a market multiple method. In addition to the lower financial projections, changes in risk-free interest rates and lower market multiples of peer group companies contributed to the amount of the 2018 goodwill impairment charges.

During the third quarter of 2018, the Company performed its required annual impairment tests of goodwill and concluded there was no impairment of goodwill or trade names.

During the fourth quarter of 2018, the LTC reporting unit missed its forecast primarily due to operational issues and customer liquidity issues, including one significant customer bankruptcy. Additionally, LTC management submitted an updated final budget for 2019 which showed significant additional deterioration in the projected financial results for 2019 compared to the analyses performed in the second and third quarters of 2018 primarily due to continued industry and operational challenges, which also caused management to make further updates to its long-term forecast beyond 2019. The updated projections reflected continued industry wide challenges including lower occupancy rates in skilled nursing facilities, significant deterioration in the financial health of numerous skilled nursing facility customers and continued facility reimbursement pressures. Based on these updated projections, management determined that there were indicators that the LTC reporting unit’s goodwill may be further impaired and, accordingly, management performed an interim goodwill impairment test during the fourth quarter of 2018. The results of that interim impairment test showed that the fair value of the LTC reporting unit was lower than the carrying value, resulting in an additional $2.2 billion pre-tax goodwill impairment charge in the fourth quarter of 2018. In addition to the lower financial projections, lower market multiples of peer group companies also contributed to the amount of the fourth quarter 2018 goodwill impairment charge. The fair value of the LTC reporting unit was determined using a methodology consistent with the methodology described above for the analyses performed during the second and third quarters of 2018.

During the third quarter of 2019, the Company performed its required annual impairment tests of goodwill. The results of these impairment tests indicated that there was no impairment of goodwill. As of December 31, 2019, the remaining goodwill balance in the LTC reporting unit was $431 million.

RxCrossroads

During 2017, the Company began pursuing various strategic alternatives for its RxCrossroads reporting unit. In connection with this effort, the Company performed an interim goodwill impairment test in the second quarter of 2017. The results of that impairment test showed that the fair value of the RxCrossroads reporting unit was lower than the carrying value, resulting in a $135 million pre-tax goodwill impairment charge in the second quarter of 2017.

The TCJA was enacted on December 22, 2017 and reduced the U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018 (see Note 10 ‘‘Income Taxes’’). As a result, the RxCrossroads deferred income tax liabilities were reduced by $47 million and an income tax benefit of $47 million was recorded in the 2017 statement of operations. The reduction in the deferred income tax liabilities increased the carrying value of the RxCrossroads reporting unit by $47 million which triggered an additional goodwill impairment charge in the RxCrossroads reporting unit of $46 million during the fourth quarter of 2017.

On January 2, 2018, the Company sold its RxCrossroads subsidiary to McKesson Corporation for $725 million, at which time the remaining goodwill of this reporting unit was removed from the consolidated balance sheets.

Intangible Assets

The following table is a summary of the Company’s intangible assets as of December 31, 2019 and 2018:



In millions, except weighted average life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (years)
2019
Trademarks (indefinite-lived)	$	10,498	$	—		$	10,498	N/A
Customer contracts/relationships and covenants not to compete	25,447		(8,128		)	17,319		14.8
Technology	1,060		(386		)	674		3.0
Provider networks	4,200		(229		)	3,971		20.0
Value of Business Acquired	590		(63		)	527		20.0
Other	364		(232		)	132		8.1
Total	$	42,159	$	(9,038	)	$	33,121	15.1

2018
Trademarks (indefinite-lived)	$	10,498	$	—		$	10,498	N/A
Customer contracts/relationships and covenants not to compete	26,213		(6,349		)	19,864		14.8
Technology	1,060		(31		)	1,029		3.0
Provider networks	4,200		(19		)	4,181		20.0
Value of Business Acquired	590		(7		)	583		20.0
Favorable leases and other ⁽¹⁾	1,177		(808		)	369		17.1
Total	$	43,738	$	(7,214	)	$	36,524	15.3

^{_____________________________________________}


(1)	Upon adoption of ASU 2016-02, Leases, the Company’s favorable leases were reclassified from an intangible asset to a reduction of the right-of-use asset. Refer to Note 1 ‘‘Significant Accounting Policies’’ for additional information on the adoption of ASU 2016-02, Leases.

Amortization expense for intangible assets totaled $2.4 billion, $1.0 billion and $817 million for the years ended December 31, 2019, 2018 and 2017, respectively. The projected annual amortization expense for the Company’s intangible assets for the next five years is as follows:



In millions
2020	$	2,283
2021	2,186
2022	1,816
2023	1,786
2024	1,743

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

The Company adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”) on January 1, 2019 on a modified retrospective basis. As a result, the Company’s lease disclosures as of and for the year ended December 31, 2019 are reported under ASC 842. Comparative financial information for prior periods has not been restated and continues to be reported under ASC 840, the lease accounting standard in effect for those periods.

Disclosure Subsequent to the Adoption of the New Lease Accounting Standard (ASU 2016-02)

The Company leases most of its retail stores and mail order facilities and certain distribution centers and corporate offices under operating or finance leases, typically with initial terms of 15 to 25 years. The Company also leases certain equipment and other assets under operating or finance leases, typically with initial terms of 3 to 10 years.

In addition, the Company leases pharmacy space at the stores of another retail chain for which the noncancelable contractual term of the pharmacy lease arrangement exceeds the remaining estimated economic life of the buildings. For these pharmacy

lease arrangements, the Company concluded that for accounting purposes the lease term was the remaining estimated economic life of the buildings. Consequently, most of these individual pharmacy leases are finance leases.

The following table is a summary of the components of net lease cost for the year ended December 31, 2019:



In millions	2019
Operating lease cost	$	2,720
Finance lease cost:
Amortization of right-of-use assets	38
Interest on lease liabilities	44
Total finance lease costs	82
Short-term lease costs	24
Variable lease costs	581
Less: sublease income	50
Net lease cost	$	3,357

Supplemental cash flow information related to leases for the year ended December 31, 2019 is as follows:



In millions	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	2,701
Operating cash flows paid for interest portion of finance leases	44
Financing cash flows paid for principal portion of finance leases	26
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,824
Finance leases	283

Supplemental balance sheet information related to leases as of December 31, 2019 is as follows:



In millions, except remaining lease term and discount rate
Operating leases:
Operating lease right-of-use assets	$	20,860

Current portion of operating lease liabilities	$	1,596
Long-term operating lease liabilities	18,926
Total operating lease liabilities	$	20,522

Finance leases:⁽¹⁾
Property and equipment, gross	$	790
Accumulated depreciation ⁽²⁾	(38		)
Property and equipment, net	$	752

Current portion of long-term debt	$	27
Long-term debt	781
Total finance lease liabilities	$	808

Weighted average remaining lease term (in years)
Operating leases	13.8
Finance leases	20.5

Weighted average discount rate
Operating leases	4.6		%
Finance leases	6.7		%

^{_____________________________________________}


(1)	Finance lease right-of-use assets are included within property and equipment, net and the respective finance lease liabilities are included in current portion of long-term debt and long-term debt on the consolidated balance sheets.


(2)	In accordance with ASC 842, upon adoption the net carrying value of the prior capital leases became the initial basis of the Company’s finance leases. As a result, upon adoption there was no accumulated amortization associated with such finance leases.

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

^{_____________________________________________}


(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

The Company leases pharmacy and clinic space from Target Corporation. Amounts related to such finance and operating leases are reflected above. Pharmacy lease amounts due in excess of the remaining estimated economic life of the buildings of approximately $2.2 billion are not reflected in this table since the estimated economic life of the buildings is shorter than the contractual term of the pharmacy lease arrangement.

Sale-Leaseback Transactions

The Company finances a portion of its store development program through sale-leaseback transactions. The properties are generally sold at net book value, which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operating leases. The operating leases that resulted from these transactions are included in the tables above. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. Proceeds from sale-leaseback transactions totaled $5 million in 2019.

Store Rationalization Charges

During the first quarter of 2019, the Company performed a review of its retail stores and determined it would close 46 underperforming retail pharmacy stores during the second quarter of 2019. As a result, management determined that there were indicators of impairment with respect to the impacted stores, including the associated operating lease right-of-use assets. Accordingly, an interim long-lived asset impairment test was performed. The results of the impairment test indicated that the fair value of each store asset group was lower than the carrying value. The fair value was determined using a discounted cash flow method based on estimated sublease income. In the three months ended March 31, 2019, the Company recorded a store rationalization charge of $135 million, primarily related to these operating lease right-of-use asset impairment charges, which was recorded within operating expenses in the Retail/LTC segment.

During the third quarter of 2019, in connection with its annual budgeting process, the Company performed an updated review of its retail stores and determined it would close an additional 22 underperforming retail pharmacy stores during the first quarter of 2020. As a result, management determined that there were indicators of impairment with respect to the impacted stores, including the associated operating lease right-of-use assets. Accordingly, an interim long-lived asset impairment test was performed. The results of the impairment test indicated that the fair value of each store asset group was lower than the carrying value. The fair value was determined using a discounted cash flow method based on estimated sublease income. In the three months ended September 30, 2019, the Company recorded a store rationalization charge of $96 million, primarily related to these operating lease right-of-use asset impairment charges, which was recorded within operating expenses in the Retail/LTC segment.

Comparative Disclosure Prior to the Adoption of the New Lease Accounting Standard (ASU 2016-02)

The following table is a summary of the Company’s net rental expense for operating leases for the years ended December 31, 2018 and 2017:



In millions	2018			2017
Minimum rentals	$	2,528		$	2,455
Contingent rentals	28			29
Rental expense	2,556			2,484
Less: sublease income	(21		)	(24		)
Total rental expense, net	$	2,535		$	2,460

The amount of property and equipment under capital leases at December 31, 2018 was as follows:



In millions	2018
Property and equipment under capital leases	$	582
Accumulated amortization of property and equipment under capital leases	(163		)
Property and equipment under capital leases, net	$	419

Sale-Leaseback Transactions

The Company finances a portion of its store development program through sale-leaseback transactions. The properties are generally sold at net book value, which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operating leases. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. There were no sale-leaseback transactions in 2018. Proceeds from sale-leaseback transactions totaled $265 million in 2017.

Store Rationalization Charges

Prior to the adoption of ASC 842, when the Company closed a facility, the present value of estimated unrecoverable costs, including the remaining lease obligation less estimated sublease income and the book value of abandoned property and equipment, were charged to expense. During the year ended December 31, 2018, the Company did not recognize any significant charges related to facility closing costs.

In December 2016, the Company announced an enterprise streamlining initiative designed to reduce costs and enhance operating efficiencies to allow the Company to be more competitive in the current health care environment. During the year ended December 31, 2017, in connection with that enterprise streamlining initiative, the Company closed 71 retail stores and recorded charges of $215 million within operating expenses in the Retail/LTC segment. The charges primarily consist of provisions for the present value of noncancelable lease obligations. The noncancelable lease obligations associated with stores closed during the year ended December 31, 2017 extend through the year 2039.

The long-term portion of the lease obligations associated with all outstanding facility closings was $269 million as of December 31, 2018 and was recorded in other long-term liabilities on the consolidated balance sheets. Upon adoption of ASC 842, the closed store lease obligation was reclassified from a liability to a reduction of the right-of-use asset. Refer to Note 1 ‘‘Significant Accounting Policies’’ for additional discussion regarding the adoption of ASC 842.

Leases

The Company adopted ASU 2016-02, Leases (Topic 842) (“ASC 842”) on January 1, 2019 on a modified retrospective basis. As a result, the Company’s lease disclosures as of and for the year ended December 31, 2019 are reported under ASC 842. Comparative financial information for prior periods has not been restated and continues to be reported under ASC 840, the lease accounting standard in effect for those periods.

Disclosure Subsequent to the Adoption of the New Lease Accounting Standard (ASU 2016-02)

The Company leases most of its retail stores and mail order facilities and certain distribution centers and corporate offices under operating or finance leases, typically with initial terms of 15 to 25 years. The Company also leases certain equipment and other assets under operating or finance leases, typically with initial terms of 3 to 10 years.

In addition, the Company leases pharmacy space at the stores of another retail chain for which the noncancelable contractual term of the pharmacy lease arrangement exceeds the remaining estimated economic life of the buildings. For these pharmacy

lease arrangements, the Company concluded that for accounting purposes the lease term was the remaining estimated economic life of the buildings. Consequently, most of these individual pharmacy leases are finance leases.

The following table is a summary of the components of net lease cost for the year ended December 31, 2019:



In millions	2019
Operating lease cost	$	2,720
Finance lease cost:
Amortization of right-of-use assets	38
Interest on lease liabilities	44
Total finance lease costs	82
Short-term lease costs	24
Variable lease costs	581
Less: sublease income	50
Net lease cost	$	3,357

Supplemental cash flow information related to leases for the year ended December 31, 2019 is as follows:



In millions	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	2,701
Operating cash flows paid for interest portion of finance leases	44
Financing cash flows paid for principal portion of finance leases	26
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,824
Finance leases	283

Supplemental balance sheet information related to leases as of December 31, 2019 is as follows:



In millions, except remaining lease term and discount rate
Operating leases:
Operating lease right-of-use assets	$	20,860

Current portion of operating lease liabilities	$	1,596
Long-term operating lease liabilities	18,926
Total operating lease liabilities	$	20,522

Finance leases:⁽¹⁾
Property and equipment, gross	$	790
Accumulated depreciation ⁽²⁾	(38		)
Property and equipment, net	$	752

Current portion of long-term debt	$	27
Long-term debt	781
Total finance lease liabilities	$	808

Weighted average remaining lease term (in years)
Operating leases	13.8
Finance leases	20.5

Weighted average discount rate
Operating leases	4.6		%
Finance leases	6.7		%

^{_____________________________________________}


(1)	Finance lease right-of-use assets are included within property and equipment, net and the respective finance lease liabilities are included in current portion of long-term debt and long-term debt on the consolidated balance sheets.


(2)	In accordance with ASC 842, upon adoption the net carrying value of the prior capital leases became the initial basis of the Company’s finance leases. As a result, upon adoption there was no accumulated amortization associated with such finance leases.

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

^{_____________________________________________}


(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

The Company leases pharmacy and clinic space from Target Corporation. Amounts related to such finance and operating leases are reflected above. Pharmacy lease amounts due in excess of the remaining estimated economic life of the buildings of approximately $2.2 billion are not reflected in this table since the estimated economic life of the buildings is shorter than the contractual term of the pharmacy lease arrangement.

Sale-Leaseback Transactions

The Company finances a portion of its store development program through sale-leaseback transactions. The properties are generally sold at net book value, which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operating leases. The operating leases that resulted from these transactions are included in the tables above. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. Proceeds from sale-leaseback transactions totaled $5 million in 2019.

Store Rationalization Charges

During the first quarter of 2019, the Company performed a review of its retail stores and determined it would close 46 underperforming retail pharmacy stores during the second quarter of 2019. As a result, management determined that there were indicators of impairment with respect to the impacted stores, including the associated operating lease right-of-use assets. Accordingly, an interim long-lived asset impairment test was performed. The results of the impairment test indicated that the fair value of each store asset group was lower than the carrying value. The fair value was determined using a discounted cash flow method based on estimated sublease income. In the three months ended March 31, 2019, the Company recorded a store rationalization charge of $135 million, primarily related to these operating lease right-of-use asset impairment charges, which was recorded within operating expenses in the Retail/LTC segment.

During the third quarter of 2019, in connection with its annual budgeting process, the Company performed an updated review of its retail stores and determined it would close an additional 22 underperforming retail pharmacy stores during the first quarter of 2020. As a result, management determined that there were indicators of impairment with respect to the impacted stores, including the associated operating lease right-of-use assets. Accordingly, an interim long-lived asset impairment test was performed. The results of the impairment test indicated that the fair value of each store asset group was lower than the carrying value. The fair value was determined using a discounted cash flow method based on estimated sublease income. In the three months ended September 30, 2019, the Company recorded a store rationalization charge of $96 million, primarily related to these operating lease right-of-use asset impairment charges, which was recorded within operating expenses in the Retail/LTC segment.

Comparative Disclosure Prior to the Adoption of the New Lease Accounting Standard (ASU 2016-02)

The following table is a summary of the Company’s net rental expense for operating leases for the years ended December 31, 2018 and 2017:



In millions	2018			2017
Minimum rentals	$	2,528		$	2,455
Contingent rentals	28			29
Rental expense	2,556			2,484
Less: sublease income	(21		)	(24		)
Total rental expense, net	$	2,535		$	2,460

The amount of property and equipment under capital leases at December 31, 2018 was as follows:



In millions	2018
Property and equipment under capital leases	$	582
Accumulated amortization of property and equipment under capital leases	(163		)
Property and equipment under capital leases, net	$	419

Sale-Leaseback Transactions

The Company finances a portion of its store development program through sale-leaseback transactions. The properties are generally sold at net book value, which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operating leases. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. There were no sale-leaseback transactions in 2018. Proceeds from sale-leaseback transactions totaled $265 million in 2017.

Store Rationalization Charges

Prior to the adoption of ASC 842, when the Company closed a facility, the present value of estimated unrecoverable costs, including the remaining lease obligation less estimated sublease income and the book value of abandoned property and equipment, were charged to expense. During the year ended December 31, 2018, the Company did not recognize any significant charges related to facility closing costs.

In December 2016, the Company announced an enterprise streamlining initiative designed to reduce costs and enhance operating efficiencies to allow the Company to be more competitive in the current health care environment. During the year ended December 31, 2017, in connection with that enterprise streamlining initiative, the Company closed 71 retail stores and recorded charges of $215 million within operating expenses in the Retail/LTC segment. The charges primarily consist of provisions for the present value of noncancelable lease obligations. The noncancelable lease obligations associated with stores closed during the year ended December 31, 2017 extend through the year 2039.

The long-term portion of the lease obligations associated with all outstanding facility closings was $269 million as of December 31, 2018 and was recorded in other long-term liabilities on the consolidated balance sheets. Upon adoption of ASC 842, the closed store lease obligation was reclassified from a liability to a reduction of the right-of-use asset. Refer to Note 1 ‘‘Significant Accounting Policies’’ for additional discussion regarding the adoption of ASC 842.

Health Care Costs Payable

12 Months Ended

Dec. 31, 2019

Insurance [Abstract]

Health Care Costs Payable

The following is information about incurred and cumulative paid health care claims development as of December 31, 2019, net of reinsurance, and the total IBNR liabilities plus expected development on reported claims included within the net incurred claims amounts. See Note 1 ‘‘Significant Accounting Policies’’ for information on how the Company estimates IBNR reserves and health care costs payable as well as changes to those methodologies, if any. The Company’s estimate of IBNR liabilities is primarily based on trend and completion factors. Claim frequency is not used in the calculation of the Company’s liability. In addition, it is impracticable to disclose claim frequency information for health care claims due to the Company’s inability to gather consistent claim frequency information across its multiple claims processing systems. Any claim frequency count disclosure would not be comparable across the Company’s different claim processing systems and would not be consistent from period to period based on the volume of claims processed through each system. As a result, health care claim count frequency is not included in the disclosures below.

The Company acquired Aetna on November 28, 2018. The information about incurred and cumulative paid health care claims development in the table below is presented on a retrospective basis, under which the Company included Aetna’s historical development of health care claims for all years presented in the table. The information about incurred and paid health care claims development for the year ended December 31, 2018 is presented as required unaudited supplemental information.



In millions	Incurred Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	44,962	$	44,621
2019			51,426
	Total		$	96,047

In millions	Cumulative Paid Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	39,440	$	44,373
2019			44,987
	Total		$	89,360
All outstanding liabilities for health care costs payable prior to 2018, net of reinsurance			56
Total outstanding liabilities for health care costs payable, net of reinsurance			$	6,743

At December 31, 2019, the Company’s liabilities for IBNR plus expected development on reported claims totaled approximately $5.0 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at December 31, 2019 related to the current calendar year.

The reconciliation of the December 31, 2019 health care net incurred and paid claims development tables to the health care costs payable liability on the consolidated balance sheet is as follows:



In millions	December 31, 2019
Short-duration health care costs payable, net of reinsurance	$	6,743
Reinsurance recoverables	5
Premium deficiency reserve	4
Insurance lines other than short duration	127
Total health care costs payable	$	6,879

Prior to the Aetna Acquisition on November 28, 2018, the Company’s health care costs payable balance was immaterial and related to unpaid pharmacy claims for its SilverScript PDP. Accordingly, the Company has not provided disclosures for health care costs payable for periods prior to 2018. The following table shows the components of the change in health care costs payable during 2019 and 2018:



In millions	2019			2018
Health care costs payable, beginning of the period	$	6,147		$	5
Less: Reinsurance recoverables	4			—
Health care costs payable, beginning of the period, net	6,143			5
Acquisitions, net	—			5,357
Reclassification from pharmacy claims and discounts payable ⁽¹⁾	—			776
Add: Components of incurred health care costs
Current year	52,723			6,594
Prior years	(524		)	(42		)
Total incurred health care costs ⁽²⁾	52,199			6,552
Less: Claims paid
Current year	46,158			6,303
Prior years	5,314			260
Total claims paid	51,472			6,563
Add: Premium deficiency reserve	4			16
Health care costs payable, end of period, net	6,874			6,143
Add: Reinsurance recoverables	5			4
Health care costs payable, end of period	$	6,879		$	6,147

^{_____________________________________________}


(1)	As of the Aetna Acquisition Date, the Company reclassified $776 million of the Pharmacy Services segment’s unpaid retail pharmacy claims to third parties from pharmacy claims and discounts payable to health care costs payable as the third party liability was incurred to support the Health Care Benefits segment’s insured members.

(2)

Total incurred health care costs for the year ended December 31, 2019 and 2018 in the table above exclude (i) $4 million and $16 million, respectively, related to a premium deficiency reserve related to the Company’s Medicaid products, (ii) $41 million and $4 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the consolidated balance sheets and (iii) $285 million and $22 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the consolidated balance sheets.

The Company’s estimates of prior years’ health care costs payable decreased by $524 million in 2019 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. This development does not directly correspond to an increase in the Company’s operating results as these reductions were offset by estimated current period health care costs when the Company established the estimate of the current year health care costs payable.

Borrowings and Credit Arrangements

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Borrowings and Credit Arrangements

Borrowings and Credit Agreements

The following table is a summary of the Company’s borrowings as of December 31, 2019 and 2018:



In millions	2019			2018
Short-term debt
Commercial paper	$	—		$	720

Long-term debt
2.2% senior notes due March 2019	—			375
2.25% senior notes due August 2019	—			850
3.125% senior notes due March 2020	723			2,000
Floating rate notes due March 2020 (2.515% and 3.397% at December 31, 2019 and 2018)	277			1,000
2.8% senior notes due July 2020	2,750			2,750
3.35% senior notes due March 2021	2,038			3,000
Floating rate notes due March 2021 (2.605% and 3.487% at December 31, 2019 and 2018)	1,000			1,000
4.125% senior notes due May 2021	222			550
2.125% senior notes due June 2021	1,750			1,750
4.125% senior notes due June 2021	203			500
5.45% senior notes due June 2021	187			600
3-year tranche term loan due November 2021	—			3,000
3.5% senior notes due July 2022	1,500			1,500
2.75% senior notes due November 2022	1,000			1,000
2.75% senior notes due December 2022	1,250			1,250
4.75% senior notes due December 2022	399			399
3.7% senior notes due March 2023	6,000			6,000
2.8% senior notes due June 2023	1,300			1,300
4% senior notes due December 2023	1,250			1,250
2.625% senior notes due August 2024	1,000			—
3.375% senior notes due August 2024	650			650
3.5% senior notes due November 2024	750			750
5% senior notes due December 2024	299			299
4.1% senior notes due March 2025	5,000			5,000
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			—
6.25% senior notes due June 2027	372			372
4.3% senior notes due March 2028	9,000			9,000
3.25% senior notes due August 2029	1,750			—
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
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
Finance lease liabilities	808			642
Other	279			19
Total debt principal	69,246			74,265
Debt premiums	262			302
Debt discounts and deferred financing costs	(1,028		)	(1,138		)
	68,480			73,429
Less:
Short-term debt (commercial paper)	—			(720		)
Current portion of long-term debt	(3,781		)	(1,265		)
Long-term debt	$	64,699		$	71,444

The following is a summary of the Company’s required repayments of debt principal due during each of the next five years and thereafter, as of December 31, 2019:



In millions
2020	$	3,754
2021	5,404
2022	4,153
2023	8,554
2024	2,704
Thereafter	43,869
Total	68,438
Finance lease liabilities ⁽¹⁾	808
Total debt principal	$	69,246

^{_____________________________________________}


(1)	See Note 6 ‘‘Leases’’ for a summary of maturities of the Company’s finance lease liabilities.

Short-term Borrowings

Commercial Paper and Back-up Credit Facilities

The Company did not have any commercial paper outstanding as of December 31, 2019. The Company had $720 million of commercial paper outstanding at a weighted average interest rate of 2.8% as of December 31, 2018. In connection with its commercial paper program, the Company maintains a $1.0 billion 364-day unsecured back-up revolving credit facility, which expires on May 14, 2020, a $1.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 18, 2022, a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 17, 2023 and a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2024. 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 .03%, regardless of usage. As of December 31, 2019 and 2018, there were no borrowings outstanding under any of the Company’s back-up credit facilities.

Bridge Loan Facility

On December 3, 2017, in connection with the Aetna Acquisition, the Company entered into a $49.0 billion unsecured bridge loan facility commitment. The Company paid $221 million in fees upon entering into the agreement. The fees were capitalized in other current assets and were amortized as interest expense over the period the bridge loan facility commitment was outstanding. The bridge loan facility commitment was reduced to $44.0 billion on December 15, 2017 upon the Company entering into a $5.0 billion term loan agreement. The Company recorded $56 million of amortization of the bridge loan facility fees during the year ended December 31, 2017, which was recorded in interest expense in the consolidated statement of operations.

On March 9, 2018, the Company issued an aggregate of $40.0 billion principal amount of unsecured floating rate notes and unsecured fixed rate senior notes, collectively the “2018 Notes.” At that time, the bridge loan facility commitment was reduced to $4.0 billion, and the Company paid $8 million in fees to retain the bridge loan facility commitment through the Aetna Acquisition Date. Those fees were capitalized in other current assets and were amortized as interest expense over the period the bridge loan facility commitment was outstanding. The Company recorded $173 million of amortization of the bridge loan facility commitment fees during the year ended December 31, 2018, which was recorded in interest expense in the consolidated statement of operations. On October 26, 2018, the Company entered into a $4.0 billion unsecured 364-day bridge term loan agreement to formalize the bridge loan facility discussed above. On November 28, 2018, in connection with the Aetna Acquisition, the $4.0 billion unsecured 364-day bridge term loan agreement terminated.

Federal Home Loan Bank of Boston

Since the Aetna Acquisition Date, a subsidiary of the Company is a member of 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 December 31, 2019 was approximately $850 million. At both December 31, 2019 and 2018, there were no outstanding advances from the FHLBB.

Long-term Borrowings

2019 Notes

On August 15, 2019, the Company issued $1.0 billion aggregate principal amount of 2.625% unsecured senior notes due August 15, 2024, $750 million aggregate principal amount of 3% unsecured senior notes due August 15, 2026 and $1.75 billion aggregate principal amount of 3.25% unsecured senior notes due August 15, 2029 (collectively, the “2019 Notes”) for total proceeds of approximately $3.5 billion, net of discounts and underwriting fees. The net proceeds of the 2019 Notes were used to repay certain of the Company’s outstanding debt.

Beginning in July 2019, the Company entered into several interest rate swap and treasury lock transactions to manage interest rate risk. These agreements were designated as cash flow hedges and were used to hedge the exposure to variability in future cash flows resulting from changes in interest rates related to the anticipated issuance of the 2019 Notes. In connection with the issuance of the 2019 Notes, the Company terminated all outstanding cash flow hedges. The Company paid a net amount of $25 million to the hedge counterparties upon termination, which was recorded as a loss, net of tax, of $18 million in accumulated other comprehensive income and will be reclassified as interest expense over the life of the 2019 Notes. See Note 13 ‘‘Other Comprehensive Income’’ for additional information.

Early Extinguishment of Debt

In August 2019, the Company purchased $4.0 billion of its outstanding senior notes through cash tender offers. The senior notes purchased included the following: $1.3 billion of its 3.125% senior notes due 2020, $723 million of its floating rate notes due 2020, $328 million of its 4.125% senior notes due 2021, $297 million of 4.125% senior notes due 2021 issued by Aetna, $413 million of 5.45% senior notes due 2021 issued by Coventry Health Care, Inc., a wholly-owned subsidiary of Aetna, and $962 million of its 3.35% senior notes due 2021. In connection with the purchase of such senior notes, the Company paid a premium of $76 million in excess of the aggregate principal amount of the senior notes that were purchased, incurred $8 million in fees and recognized a net gain of $5 million on the write-off of net unamortized deferred financing premiums, for a net loss on early extinguishment of debt of $79 million.

2018 Notes

On March 9, 2018, the Company issued an aggregate of $40.0 billion in principal amount of the 2018 Notes for total proceeds of approximately $39.4 billion, net of discounts and underwriting fees. The net proceeds of the 2018 Notes were used to fund a portion of the Aetna Acquisition. The 2018 Notes consisted of the following at the time of issuance:



In millions
3.125% senior notes due March 2020	$	2,000
Floating rate notes due March 2020	1,000
3.35% senior notes due March 2021	3,000
Floating rate notes due March 2021	1,000
3.7% senior notes due March 2023	6,000
4.1% senior notes due March 2025	5,000
4.3% senior notes due March 2028	9,000
4.78% senior notes due March 2038	5,000
5.05% senior notes due March 2048	8,000
Total debt principal	$	40,000

From December 2017 through March 2018, the Company entered into several interest rate swap and treasury lock transactions to manage interest rate risk. These agreements were designated as cash flow hedges and were used to hedge the exposure to variability in future cash flows resulting from changes in interest rates related to the anticipated issuance of long-term debt to fund the Aetna Acquisition.

In connection with the issuance of the 2018 Notes, the Company terminated all outstanding cash flow hedges. In connection with the hedge transactions, the Company received a net amount of $446 million from the hedge counterparties upon termination, which was recorded as a gain, net of tax, of $331 million in accumulated other comprehensive income and will be reclassified as a reduction of interest expense over the life of the 2018 Notes. See Note 13 ‘‘Other Comprehensive Income’’ for additional information.

Term Loan Agreement

On December 15, 2017, in connection with the Aetna Acquisition, the Company entered into a $5.0 billion term loan agreement. The term loan agreement allowed for borrowings at various rates that were dependent, in part, on the Company’s debt ratings. In connection with the Aetna Acquisition, the Company borrowed $5.0 billion (a $3.0 billion three-year tranche and a $2.0 billion five-year tranche) under the term loan agreement in November 2018. The Company terminated the $2.0 billion five-year tranche in December 2018 with the repayment of the borrowing. The Company made principal payments of $500 million in March 2019, $1.0 billion in May 2019 and $1.5 billion in July 2019 on the three-year tranche, and terminated the three-year tranche and the term loan agreement with the final repayment of the borrowing in July 2019, at which time the Company had repaid all term loans.

Aetna Related Debt

Upon the closing of the Aetna Acquisition, the Company assumed long-term debt with a fair value of $8.1 billion, with stated interest rates ranging from 2.2% to 6.75%. The long-term debt assumed is included in the summary of the Company’s borrowings table above.

Debt Covenants

The Company’s back-up revolving credit facilities, unsecured senior notes and unsecured floating rate 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 December 31, 2019, the Company was in compliance with all of its debt covenants.

Pension Plans and Other Postretirement Benefits

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Pension Plans and Other Postretirement Benefits

Defined Contribution Plans

As of December 31, 2019, the Company sponsors several active 401(k) savings plans that cover all employees who meet plan eligibility requirements. The Company makes matching contributions consistent with the provisions of the respective plans.

At the participant’s option, account balances, including the Company’s matching contribution, can be invested among various investment options under each plan. Two of the defined contribution plans offer the Company’s common stock fund as an investment option. The Company also maintains nonqualified, unfunded deferred compensation plans for certain key employees. The plans provide participants the opportunity to defer portions of their eligible compensation and for certain nonqualified plans, participants receive matching contributions equivalent to what they could have received under the CVS Health Future Fund 401(k) Plan or Aetna 401(k) Plan absent certain restrictions and limitations under the Internal Revenue Code. The Company’s contributions under the above defined contribution plans were $550 million, $334 million and $314 million in 2019, 2018 and 2017, respectively. The Company’s contributions for the years ended December 31, 2019 and 2018 include contributions to the Aetna Inc. 401(k) plan subsequent to the Aetna Acquisition Date.

Defined Benefit Pension Plans

On November 28, 2018, the Company completed the Aetna Acquisition. Aetna sponsors a tax-qualified defined benefit pension plan that was frozen in 2010. Aetna also sponsors a nonqualified supplemental pension plan that was frozen in 2007. Aetna’s pension plan benefit obligations and the fair value of plan assets were remeasured as of the Aetna Acquisition Date.

Prior to the Aetna Acquisition, during the year ended December 31, 2017, the Company settled the pension obligations of its two existing tax-qualified defined benefit pension plans by irrevocably transferring pension liabilities to an insurance company through the purchase of group annuity contracts and through lump sum distributions. These purchases, funded with pension plan assets, resulted in pre-tax settlement losses of $187 million in the year ended December 31, 2017, related to the recognition of accumulated deferred actuarial losses. The settlement losses were recorded in other expense in the consolidated statement of operations. The Company also sponsors several other defined benefit pension plans that are unfunded nonqualified supplemental retirement plans.

Pension Benefit Obligation and Plan Assets

The following tables outline the change in pension benefit obligation and plan assets over the specified periods:



In millions	2019			2018
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,841		$	131
Acquired benefit obligations	—			5,685
Interest cost	225			25
Actuarial loss	530			41
Benefit payments	(357		)	(41		)
Benefit obligation, end of year	6,239			5,841

Change in plan assets:
Fair value of plan assets, beginning of year	5,663			—
Fair value of plan assets acquired	—			5,709
Actual return on plan assets	1,064			(17		)
Employer contributions	25			12
Benefit payments	(357		)	(41		)
Fair value of plan assets, end of year	6,395			5,663

Funded status	$	156		$	(178	)

The assets (liabilities) recognized on the consolidated balance sheets at December 31, 2019 and 2018 for the pension plans consisted of the following:



In millions	2019			2018
Non-current assets reflected in other assets	$	494		$	147
Current liabilities reflected in accrued expenses	(25		)	(25		)
Non-current liabilities reflected in other long-term liabilities	(313		)	(300		)
Net assets (liabilities)	$	156		$	(178	)

Net Periodic Benefit Cost (Income)

The components of net periodic benefit cost (income) for the years ended December 31, 2019, 2018 and 2017 are shown below:



In millions	2019			2018			2017
Components of net periodic benefit cost (income):
Interest cost	$	225		$	25		$	20
Expected return on plan assets	(357		)	(33		)	(20		)
Amortization of net actuarial loss	1			2			21
Settlement losses	—			—			187
Net periodic benefit cost (income)	$	(131	)	$	(6	)	$	208

Pension Plan Assumptions

The Company uses a series of actuarial assumptions to determine its benefit obligation and net periodic benefit cost (income), including discount rates and expected return on plan assets assumptions, as further detailed below.

Discount Rates - The discount rate is determined using a yield curve as of the annual measurement date. The yield curve consists of a series of individual discount rates, with each discount rate corresponding to a single point in time, based on high-quality bonds. Projected benefit payments are discounted to the measurement date using the corresponding rate from the yield curve that is consistent with the maturity profile of the expected liability cash flows.

Expected Return on Plan Assets - The expected long-term rate of return on plan assets is determined by using the plan’s target allocation and return expectations based on many factors including forecasted long-term capital market real returns and the inflationary outlook on a plan by plan basis. See “Pension Plan Assets” below for additional details regarding the pension plan assets as of December 31, 2019 and 2018.

The Company determined its benefit obligation based on the following weighted average assumptions as of December 31, 2019 and 2018:



	2019		2018
Discount rate	3.2	%	4.3	%

The Company determined its net periodic benefit cost (income) based on the following weighted average assumptions for the years ended December 31, 2019, 2018 and 2017:



	2019		2018		2017
Discount rate	4.0	%	4.0	%	4.0	%
Expected long-term rate of return on plan assets	6.5	%	6.6	%	5.0	%

Pension Plan Assets

As of December 31, 2017, the assets in the Company’s tax-qualified defined benefit pension plans had been fully liquidated to settle all plan obligations through the purchase of group annuity contracts and through lump sum distributions. Subsequent to the Aetna Acquisition Date, the Company’s pension plan assets primarily include debt and equity securities held in separate accounts, common/collective trusts and real estate investments. The valuation methodologies used to value these debt and equity securities and common/collective trusts are similar to the methodologies described in Note 4 “Fair Value.” Pension plan assets also include investments in other assets that are carried at fair value. The following is a description of the valuation methodologies used to value real estate investments and these additional investments, including the general classification pursuant to the fair value hierarchy.

Real Estate - Real estate investments are valued by independent third party appraisers. The appraisals comply with the Uniform Standards of Professional Appraisal Practice, which include, among other things, the income, cost, and sales comparison approaches to estimating property value. Therefore, these investments are classified in Level 3.

Private equity and hedge fund limited partnerships - Private equity and hedge fund limited partnerships are carried at fair value which is estimated using the NAV per unit as reported by the administrator of the underlying investment fund as a practical expedient to fair value. Therefore, these investments have been excluded from the fair value table below.

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2019 were as follows:



In millions	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	92	$	65		$	—	$	157
Debt securities:
U.S. government securities	592		31			—		623
States, municipalities and political subdivisions	—		157			—		157
U.S. corporate securities	—		1,849			1		1,850
Foreign securities	—		178			—		178
Residential mortgage-backed securities	—		385			—		385
Commercial mortgage-backed securities	—		89			—		89
Other asset-backed securities	—		150			—		150
Redeemable preferred securities	—		5			—		5
Total debt securities	592		2,844			1		3,437
Equity securities:
U.S. domestic	931		1			—		932
International	481		—			—		481
Domestic real estate	25		—			—		25
Total equity securities	1,437		1			—		1,438
Other investments:
Real estate	—		—			353		353
Common/collective trusts ⁽¹⁾	—		288			—		288
Derivatives	—		(2		)	—		(2		)
Total other investments	—		286			353		639
Total pension investments ⁽²⁾	$	2,121	$	3,196		$	354	$	5,671

^{_____________________________________________}


(1)	The assets in the underlying funds of common/collective trusts consist of $137 million of equity securities and $151 million of debt securities.


(2)	Excludes $540 million of private equity limited partnership investments and $184 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2018 were as follows:



In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	68	$	30	$	—	$	98
Debt securities:
U.S. government securities	511		38		—		549
States, municipalities and political subdivisions	—		147		—		147
U.S. corporate securities	—		1,671		5		1,676
Foreign securities	—		177		—		177
Residential mortgage-backed securities	—		339		—		339
Commercial mortgage-backed securities	—		70		—		70
Other asset-backed securities	—		162		—		162
Redeemable preferred securities	—		6		—		6
Total debt securities	511		2,610		5		3,126
Equity securities:
U.S. domestic	744		—		—		744
International	356		—		—		356
Domestic real estate	30		—		—		30
Total equity securities	1,130		—		—		1,130
Other investments:
Real estate	—		—		425		425
Common/collective trusts ⁽¹⁾	—		253		—		253
Derivatives	—		2		—		2
Total other investments	—		255		425		680
Total pension investments ⁽²⁾	$	1,709	$	2,895	$	430	$	5,034

^{_____________________________________________}


(1)	The assets in the underlying funds of common/collective trusts consist of $109 million of equity securities and $144 million of debt securities.


(2)	Excludes $465 million of private equity limited partnership investments and $164 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

The changes in the balance of Level 3 pension plan assets during 2019 were as follows:



	2019
In millions	Real estate			U.S. corporate securities			Total
Beginning balance	$	425		$	5		$	430
Actual return on plan assets	5			—			5
Purchases, sales and settlements	(77		)	(5		)	(82		)
Transfers into (out of) Level 3	—			1			1
Ending balance	$	353		$	1		$	354

The increase in the balance of Level 3 pension plan assets during 2018 relates to investments acquired in the Aetna Acquisition. There was an immaterial amount of transfers into or out of Level 3 from the Aetna Acquisition Date to December 31, 2018.

The Company’s pension plan invests in a diversified mix of assets intended to maximize long-term returns while recognizing the need for adequate liquidity to meet ongoing benefit and administrative obligations. The risk of unexpected investment and actuarial outcomes is regularly evaluated. This evaluation is performed through forecasting and assessing ranges of investment outcomes over short- and long-term horizons and by assessing the pension plan’s liability characteristics. Complementary investment styles and strategies are utilized by multiple investment management firms to further improve portfolio and operational risk characteristics. Public and private equity investments are used primarily to increase overall plan returns. Real estate investments are viewed favorably for their diversification benefits and above-average dividend generation. Fixed income

investments provide diversification benefits and liability hedging attributes that are desirable, especially in falling interest rate environments.

At December 31, 2019, target investment allocations for the Company’s pension plan were: 33% in equity securities, 54% in debt securities, 6% in real estate, 4% in private equity limited partnerships and 3% in hedge funds. Actual asset allocations may differ from target allocations due to tactical decisions to overweight or underweight certain assets or as a result of normal fluctuations in asset values. Asset allocations are consistent with stated investment policies and, as a general rule, periodically rebalanced back to target asset allocations. Asset allocations and investment performance are formally reviewed periodically throughout the year by the pension plan’s Benefit Finance Committee. Forecasting of asset and liability growth is performed at least annually.

Cash Flows

The Company generally contributes to its tax-qualified pension plan based on minimum funding requirements determined under applicable federal laws and regulations. Employer contributions related to the nonqualified supplemental pension plans generally represent payments to retirees for current benefits. The Company contributed $25 million, $12 million and $46 million to its pension plans during 2019, 2018 and 2017, respectively. No contributions are required for the tax-qualified pension plan in 2020. The Company expects to make an immaterial amount of contributions for all other pension plans in 2020. The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the pension benefit obligation as of December 31, 2019:



In millions
2020	$	373
2021	415
2022	379
2023	384
2024	380
2025-2029	1,851

Multiemployer Pension Plans

The Company also contributes to a number of multiemployer pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer pension plans in the following respects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers, and (iii) if the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the applicable plan, which is referred to as a withdrawal liability.

None of the multiemployer pension plans in which the Company participates are individually significant to the Company. The Company’s contributions to multiemployer pension plans were $18 million, $18 million and $17 million in 2019, 2018 and 2017, respectively.

Other Postretirement Benefits

The Company provides postretirement health care and life insurance benefits to certain retirees who meet eligibility requirements. During 2018, the Company acquired additional OPEB plans in connection with the Aetna Acquisition. The Company’s funding policy is generally to pay covered expenses as they are incurred. For retiree medical plan accounting, the Company reviews external data and its own historical trends for health care costs to determine the health care cost trend rates. As of December 31, 2019 and 2018, the Company’s other postretirement benefits had an accumulated postretirement benefit obligation of $246 million and $228 million, respectively. Net periodic benefit costs related to these other postretirement benefits were $7 million, $2 million and $1 million in 2019, 2018 and 2017, respectively.

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the accumulated other postretirement benefit obligation as of December 31, 2019:



In millions
2020	$	15
2021	15
2022	15
2023	15
2024	15
2025-2029	72

Pursuant to various collective bargaining agreements, the Company also contributes to multiemployer health and welfare plans that cover certain union-represented employees. The plans provide postretirement health care and life insurance benefits to certain employees who meet eligibility requirements. The Company’s contributions to multiemployer health and welfare plans totaled $57 million, $58 million and $58 million in 2019, 2018 and 2017, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

The income tax provision (benefit) for continuing operations consisted of the following for the years ended December 31, 2019, 2018 and 2017:



In millions	2019			2018		2017
Current:
Federal	$	2,450		$	1,480	$	2,594
State	565			499		464
	3,015			1,979		3,058
Deferred:
Federal	(535		)	22		(1,435		)
State	(114		)	1		14
	(649		)	23		(1,421		)
Total	$	2,366		$	2,002	$	1,637

The TCJA was enacted on December 22, 2017. Among numerous changes to existing tax laws, the TCJA permanently reduced the federal corporate income tax rate from 35% to 21% effective on January 1, 2018. The effects of changes in tax rates on deferred tax balances are required to be taken into consideration in the period in which the changes are enacted, regardless of when they are effective. As a result of the reduction of the corporate income tax rate under the TCJA, the Company estimated the revaluation of its net deferred tax liabilities and recorded a provisional income tax benefit of approximately $1.5 billion for year ended December 31, 2017. In 2018, the Company completed its process of determining the TCJA’s final impact and recorded an additional income tax benefit of $100 million.

The following table is a reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continuing operations for the years ended December 31, 2019, 2018 and 2017:



	2019		2018		2017
Statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal tax benefit	4.0		27.7		4.1
Effect of the Tax Cuts and Jobs Act	—		(7.1	)	(18.3	)
Health insurer fee	—		2.2		—
Goodwill impairments	—		89.5		0.8
Sale of subsidiary	—		5.0		—
Other	1.3		4.1		(1.8	)
Effective income tax rate	26.3	%	142.4	%	19.8	%

The following table is a summary of the components of the Company’s deferred income tax assets and liabilities as of December 31, 2019 and 2018:



In millions	2019			2018
Deferred income tax assets:
Lease and rents	$	267		$	277
Inventory	23			28
Employee benefits	191			243
Bad debts and other allowances	294			243
Retirement benefits	47			130
Net operating loss and capital loss carryforwards	480			529
Deferred income	36			104
Insurance reserves	430			467
Investments	—			11
Other	451			242
Valuation allowance	(374		)	(520		)
Total deferred income tax assets	1,845			1,754
Deferred income tax liabilities:
Investments	(289		)	—
Depreciation and amortization	(8,850		)	(9,431		)
Total deferred income tax liabilities	(9,139		)	(9,431		)
Net deferred income tax liabilities	$	(7,294	)	$	(7,677	)

As of December 31, 2019, the Company has net operating and capital loss carryovers of $480 million, which expire between 2021 and 2038. The Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and the Company’s recent operating results. The Company established a valuation allowance of $374 million because it does not consider it more likely than not that these deferred tax assets will be recovered.

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2019, 2018 and 2017 is as follows:



In millions	2019			2018			2017
Beginning balance	$	661		$	344		$	307
Additions based on tax positions related to the current year	4			1			62
Additions based on tax positions related to prior years	115			324			32
Reductions for tax positions of prior years	(111		)	(5		)	(28		)
Expiration of statutes of limitation	(7		)	(2		)	(10		)
Settlements	(7		)	(1		)	(19		)
Ending balance	$	655		$	661		$	344

The increase in the balance of unrecognized tax benefits in 2018 compared to 2017 was mainly due to the Aetna Acquisition.

The Company and most of its subsidiaries are subject to U.S. federal income tax as well as income tax of numerous state and local jurisdictions. The Company is a participant in the Compliance Assurance Process, which is a program made available by the U.S. Internal Revenue Service (“IRS”) to certain qualifying large taxpayers, under which participants work collaboratively with the IRS to identify and resolve potential tax issues through open, cooperative and transparent interaction prior to the annual filing of their federal income tax returns. The IRS has completed its examinations of the Company’s consolidated U.S. federal income tax returns through tax year 2013. The IRS has substantially completed its examinations of the Company’s consolidated U.S. federal income tax returns for tax years 2014 through 2018. The IRS is currently examining the Company’s 2019 consolidated U.S. federal income tax return.

The Company and its subsidiaries are also currently under income tax examinations by a number of state and local tax authorities. As of December 31, 2019, no examination has resulted in any proposed adjustments that would result in a material change to the Company’s operating results, financial condition or liquidity.

Substantially all material state and local income tax matters have been concluded for fiscal years through 2014. Certain state exams are likely to be concluded and certain state statutes of limitations will lapse in 2020, but the change in the balance of the Company’s uncertain tax positions is projected to be immaterial. In addition, it is reasonably possible that the Company’s unrecognized tax benefits could change within the next twelve months due to the anticipated conclusion of various examinations with the IRS for various years. An estimate of the range of the possible change cannot be made at this time.

The Company records interest expense related to unrecognized tax benefits and penalties in the income tax provision. The Company accrued interest expense of approximately $49 million, $19 million and $11 million in 2019, 2018 and 2017, respectively. The Company had approximately $173 million and $80 million accrued for interest and penalties as of December 31, 2019 and 2018, respectively.

As of December 31, 2019, the total amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate is approximately $532 million, after considering the federal benefit of state income taxes.

Stock Incentive Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock Incentive Plans

The terms of the CVS Health 2017 Incentive Compensation Plan (“ICP”) provide for grants of annual incentive and long-term performance awards to executive officers and other officers and employees of the Company or any subsidiary of the Company, as well as equity compensation to outside directors of CVS Health. Payment of such annual incentive and long-term performance awards will be in cash, stock, other awards or other property, at the discretion of the Management Planning and Development Committee (the “MP&D Committee”) of CVS Health’s Board of Directors (the “Board”). The ICP allows for a maximum of 32 million shares of CVS Health common stock to be reserved and available for grants. Prior to the acquisition of Aetna in 2018, the ICP was the only compensation plan under which the Company granted stock options, restricted stock and other stock-based awards to its employees, with the exception of the Company’s Employee Stock Purchase Plan (“ESPP”). As of December 31, 2019, there were approximately 17 million shares of CVS Health common stock available for future grants under the ICP.

As of the Aetna Acquisition Date, approximately 22 million shares of Aetna common stock subject to awards outstanding under the Amended Aetna Inc. 2010 Stock Incentive Plan (“SIP”) were assumed by CVS Health. In addition, in accordance with the merger agreement, shares which were available for future issuance under the SIP were converted into approximately 32 million shares of CVS Health common stock reserved and available for issuance pursuant to future awards. As of December 31, 2019, there were approximately 27 million shares of CVS Health common stock available for future grants under the SIP.

Stock-Based Compensation Expense

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the stock award (generally three to five years) using the straight-line method. The following table is a summary of stock-based compensation for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Stock options and stock appreciation rights (“SARs”) ^{(1) (2)}	$	76	$	70	$	65
Restricted stock units and performance stock units ⁽²⁾	377		210		169
Total stock-based compensation	$	453	$	280	$	234

^{_____________________________________________}


(1)	Includes the ESPP.


(2)	Stock-based compensation for the year ended December 31, 2018 includes $14 million and $27 million associated with accelerated vesting of SARs and restricted stock replacement awards, respectively, issued to Aetna employees who were terminated subsequent to the Aetna Acquisition.

ESPP

The ESPP provides for the purchase of up to 30 million shares of CVS Health common stock. Under the ESPP, eligible employees may purchase common stock at the end of each six month offering period at a purchase price equal to 90% of the lower of the fair market value on the first day or the last day of the offering period. During 2019, approximately two million

shares of common stock were purchased under the provisions of the ESPP at an average price of $53.29 per share. As of December 31, 2019, approximately seven million shares of common stock were available for issuance under the ESPP.

The fair value of stock-based compensation associated with the ESPP is estimated on the date of grant (the first day of the six month offering period) using the Black-Scholes option pricing model.

The following table is a summary of the assumptions used to value the ESPP awards for the years ended December 31, 2019, 2018 and 2017:



	2019			2018			2017
Dividend yield ⁽¹⁾	1.70		%	1.45		%	1.24		%
Expected volatility ⁽²⁾	27.96		%	28.02		%	22.70		%
Risk-free interest rate ⁽³⁾	2.27		%	1.87		%	0.86		%
Expected life (in years) ⁽⁴⁾	0.5			0.5			0.5
Weighted-average grant date fair value	$	10.51		$	12.26		$	13.01

^{_____________________________________________}


(1)	The dividend yield is calculated based on semi-annual dividends paid and the fair market value of CVS Health stock at the grant date.


(2)	The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over the previous six month period.


(3)	The risk-free interest rate is selected based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP purchases (i.e., six months).


(4)	The expected life is based on the semi-annual purchase period.

Restricted Stock Units and Performance Stock Units

The Company’s restricted stock units and performance stock units are considered nonvested share awards and require no payment from the employee. The fair value of the restricted stock units is based on the market price of CVS Health common stock on the grant date and is recognized on a straight-line basis over the vesting period. For each restricted stock unit granted, employees receive one share of common stock, net of taxes, at the end of the vesting period.

The Company’s performance stock units contain performance vesting conditions in addition to a service vesting condition. Vesting of the Company’s performance stock units is dependent upon the degree to which the Company achieves its performance goals, which are generally set for a three-year performance period and are approved at the time of grant by the MP&D Committee.

The fair value of performance stock units granted with service and performance vesting conditions is based on the market price of CVS Health common stock on the grant date and is recognized over the vesting period. Certain of the performance stock units also contain a market vesting condition based on the performance of CVS Health common stock relative to a comparator group. The fair value of these performance stock units is determined using a Monte Carlo simulation as of the grant date and is recognized over the vesting period.

On November 28, 2018, the Company completed the Aetna Acquisition. All unvested Aetna performance stock unit and restricted stock unit awards as of the Aetna Acquisition Date were converted into replacement CVS Health restricted stock awards.

As of December 31, 2019, there was $524 million of total unrecognized compensation cost related to the Company’s restricted stock units and performance stock units that are expected to vest. These costs are expected to be recognized over a weighted-average period of 2.2 years. The total fair value of restricted stock units vested during 2019, 2018 and 2017 was $265 million, $262 million and $175 million, respectively.

The following table is a summary of the restricted stock unit and performance stock unit activity for the year ended December 31, 2019:



In thousands, except weighted average grant date fair value	Units		Weighted Average Grant Date Fair Value
Outstanding at beginning of year, nonvested	11,005		$	76.18
Granted	7,644		$	54.34
Vested	(4,216	)	$	62.59
Forfeited	(1,308	)	$	58.73
Outstanding at end of year, nonvested	13,125		$	61.57

Stock Options and SARs

All stock option grants are awarded at fair value on the date of grant. The fair value of stock options is estimated using the Black-Scholes option pricing model, and stock-based compensation is recognized on a straight-line basis over the requisite service period. Stock options granted generally become exercisable over a four-year period from the grant date. Stock options granted prior to 2019 generally expire seven years after the grant date. Stock options granted in 2019 expire ten years after the grant date.

On November 28, 2018, the Company completed the Aetna Acquisition. All unvested Aetna SARs outstanding as of the Aetna Acquisition Date were converted into replacement CVS Health SARs. The replacement SARs granted will be settled in CVS Health common stock, net of taxes, based on the appreciation of the stock price on the exercise date over the market price on the date of grant. The fair value of SARs is estimated using the Black-Scholes option pricing model, and stock-based compensation is recognized on a straight-line basis over the requisite service period. SARs generally become exercisable over a three-year period from the grant date. SARs generally expire ten years after the grant date.

The following table is a summary of stock option and SAR activity that occurred for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Cash received from stock options exercised (including ESPP)	$	210	$	242	$	329
Payments for taxes for net share settlement of equity awards	112		97		71
Intrinsic value of stock options and SARs exercised	30		79		176
Fair value of stock options and SARs vested	467		324		341

The fair value of each stock option and SAR is estimated using the Black-Scholes option pricing model based on the following assumptions at the time of grant:



	2019			2018			2017
Dividend yield ⁽¹⁾	3.68		%	2.76		%	2.56		%
Expected volatility ⁽²⁾	21.76		%	21.27		%	18.39		%
Risk-free interest rate ⁽³⁾	0.56		%	2.77		%	1.77		%
Expected life (in years) ⁽⁴⁾	6.3			4.8			4.1
Weighted-average grant date fair value	$	6.27		$	24.55		$	9.43

^{_____________________________________________}


(1)	The dividend yield is based on annual dividends paid and the fair market value of CVS Health stock at the grant date.


(2)	The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over a period equal to the expected life of each option or SAR grant after adjustments for infrequent events such as stock splits.


(3)	The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options or SARs being valued.


(4)	The expected life represents the number of years the options or SARs are expected to be outstanding from grant date based on historical option or SAR holder exercise experience.

The increase in the weighted-average grant date fair value in 2018 was due to the issuance of the replacement SARs in connection with the Aetna Acquisition.

As of December 31, 2019, unrecognized compensation expense related to unvested stock options and SARs totaled $41 million, which the Company expects to be recognized over a weighted-average period of 2.1 years. After considering anticipated forfeitures, the Company expects approximately 10 million of the unvested stock options and SARs to vest over the requisite service period.

The following table is a summary of the Company’s stock option and SAR activity for the year ended December 31, 2019:



In thousands, except weighted average exercise price and remaining contractual term	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at beginning of year	22,909		$	71.15
Granted	6,538		$	54.40
Exercised	(3,667	)	$	46.17
Forfeited	(769	)	$	68.12
Expired	(1,109	)	$	82.40
Outstanding at end of year	23,902		$	69.98	4.76	$	274,987
Exercisable at end of year	13,267		$	77.48	2.73	109,765
Vested at end of year and expected to vest in the future	23,328		$	70.28	4.67	265,128

Shareholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Repurchases

The following share repurchase programs have been authorized by the Board:



In billions Authorization Date	Authorized		Remaining as of December 31, 2019
November 2, 2016 (“2016 Repurchase Program”)	$	15.0	$	13.9
December 15, 2014 (“2014 Repurchase Program”)	10.0		—

Each of the share Repurchase Programs was effective immediately. The 2014 Repurchase Program has been completed. The 2016 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 2016 Repurchase Program can be modified or terminated by the Board at any time.

During the years ended December 31, 2019 and 2018, the Company did not repurchase any shares of common stock pursuant to the 2016 Repurchase Program. During the year ended December 31, 2017, the Company repurchased an aggregate of 55.4 million shares of common stock for approximately $4.4 billion under the 2014 and 2016 Repurchase Programs, a significant portion of which were repurchased through two ASR transactions which are further described below.

Pursuant to the authorization under the 2014 Repurchase Program, in August 2016, the Company entered into two fixed dollar ASRs with Barclays Bank PLC (“Barclays”) for a total of $3.6 billion. Upon payment of the $3.6 billion purchase price in January 2017, the Company received a number of shares of CVS Health common stock equal to 80% of the $3.6 billion notional amount of the ASRs or approximately 36.1 million shares, which were placed into treasury stock in January 2017. The ASRs were accounted for as an initial treasury stock transaction for $2.9 billion and a forward contract for $0.7 billion. In April 2017, the Company received an additional 9.9 million shares of CVS Health common stock, representing the remaining 20% of the $3.6 billion notional amount of the ASRs, thereby concluding the ASRs. The additional 9.9 million shares of common stock delivered to the Company by Barclays were placed into treasury stock, and the forward contract was reclassified from capital surplus to treasury stock in April 2017.

Dividends

The quarterly cash dividend declared by the Board was $0.50 per share in 2019 and 2018. CVS Health 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.

Regulatory Requirements

On November 28, 2018, the Company completed the Aetna Acquisition. Aetna’s insurance business operations are conducted through subsidiaries that principally consist of HMOs and insurance companies. The Company’s HMO and insurance subsidiaries report their financial statements in accordance with accounting practices prescribed by state regulatory authorities which may differ from GAAP.

The combined statutory net income of the Company’s insurance and HMO subsidiaries for the year ended December 31, 2019 was $2.8 billion and for the year ended December 31, 2018 (which includes Aetna and its subsidiaries from November 28, 2018 to December 31, 2018) was not material. The estimated combined statutory capital and surplus at December 31, 2019 and 2018 of the Company’s insurance and HMO subsidiaries was approximately $11.0 billion and $10.1 billion, respectively. The Company’s insurance and HMO subsidiaries paid $2.4 billion of gross dividends to the Company for the year ended December 31, 2019.

In addition to general state law restrictions on payments of dividends and other distributions to stockholders applicable to all corporations, HMOs and insurance companies are subject to further regulations that, among other things, may require those companies to maintain certain levels of equity and restrict the amount of dividends and other distributions that may be paid to their equity holders. In addition, in connection with the Aetna Acquisition, the Company made certain undertakings that require prior regulatory approval of dividends by certain of its HMOs and insurance companies. At December 31, 2019, these amounts were as follows:



In millions
Estimated minimum statutory surplus required by regulators	$	5,841
Investments on deposit with regulatory bodies	672
Estimated maximum dividend distributions permitted in 2020 without prior regulatory approval	366

Noncontrolling Interests

At December 31, 2019 and 2018, noncontrolling interests were $306 million and $318 million, respectively, primarily related to third party interests in the Company’s operating entities. The noncontrolling entities’ share is included in total shareholders’ equity on the consolidated balance sheets.

Other Comprehensive Income

12 Months Ended

Dec. 31, 2019

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

Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) in 2019, 2018 and 2017:



	At December 31,
In millions	2019			2018			2017
Net unrealized investment gains:
Beginning of year balance	$	97		$	—		$	—
Other comprehensive income before reclassifications ($927, $132 and $0 pretax)	763			97			—
Amounts reclassified from accumulated other comprehensive income ($(105), $1 and $0 pretax) ⁽¹⁾	(86		)	—			—
Other comprehensive income	677			97			—
End of year balance	774			97			—

Foreign currency translation adjustments:
Beginning of year balance	(158		)	(129		)	(127		)
Other comprehensive income (loss) before reclassifications	8			(29		)	(2		)
Amounts reclassified from accumulated other comprehensive loss ⁽²⁾	154			—			—
Other comprehensive income (loss)	162			(29		)	(2		)
End of year balance	4			(158		)	(129		)

Net cash flow hedges:
Beginning of year balance	312			(15		)	(5		)
Adoption of new accounting standard ⁽³⁾	—			(3		)	—
Other comprehensive income (loss) before reclassifications ($(25), $465 and $(18) pretax)	(18		)	344			(11		)
Amounts reclassified from accumulated other comprehensive income (loss) ($(20), $(19) and $2 pretax) ⁽⁴⁾	(15		)	(14		)	1
Other comprehensive income (loss)	(33		)	330			(10		)
End of year balance	279			312			(15		)

Pension and other postretirement benefits:
Beginning of year balance	(149		)	(21		)	(173		)
Adoption of new accounting standard ⁽³⁾	—			(4		)	—
Other comprehensive income (loss) before reclassifications ($162, $(178) and $0 pretax)	120			(132		)	—
Amounts reclassified from accumulated other comprehensive loss ($(12), $11 and $249 pretax) ⁽⁵⁾	(9		)	8			152
Other comprehensive income (loss)	111			(124		)	152
End of year balance	(38		)	(149		)	(21		)

Total beginning of year accumulated other comprehensive income (loss)	102			(165		)	(305		)
Adoption of new accounting standard ⁽³⁾	—			(7		)	—
Total other comprehensive income	917			274			140
Total end of year accumulated other comprehensive income (loss)	$	1,019		$	102		$	(165	)

^{_____________________________________________}


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


(2)	Amounts reclassified from accumulated other comprehensive loss represent the elimination of the cumulative translation adjustment associated with the sale of Onofre, which was sold on July 1, 2019. The loss on the divestiture of Onofre is reflected in operating expenses in the consolidated statements of operations.


(3)	Reflects the adoption of ASU 2018-02, Income Statement Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income during the year ended December 31, 2018.


(4)	Amounts reclassified from accumulated other comprehensive income (loss) for specifically identified cash flow hedges are included within interest expense in the consolidated statements of operations. The Company expects to reclassify approximately $14 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(5)

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

Earnings (Loss) Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (loss) per share is computed using the two-class method. For periods in which the Company reports net income, diluted earnings per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. SARs and options to purchase 17 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share, for the year ended December 31, 2019 because the exercise prices of the SARs and options were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, options to purchase 13 million and 10 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share, for the years ended December 31, 2018 and 2017, respectively. In addition, due to the loss from continuing operations attributable to CVS Health in the year ended December 31, 2018, 3 million potentially dilutive common equivalent shares were excluded from the calculation of diluted earnings per share, as the impact of these shares was antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share from continuing operations for the years ended December 31, 2019, 2018 and 2017:



In millions, except per share amounts	2019			2018			2017
Numerator for earnings (loss) per share calculation:
Income (loss) from continuing operations	$	6,631		$	(596	)	$	6,631
Income allocated to participating securities	(5		)	(3		)	(24		)
Net (income) loss attributable to noncontrolling interests	3			2			(1		)
Income (loss) from continuing operations attributable to CVS Health	$	6,629		$	(597	)	$	6,606

Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,301			1,044			1,020
Effect of dilutive securities	4			—			4
Weighted average shares, diluted	1,305			1,044			1,024

Earnings (loss) per share from continuing operations:
Basic	$	5.10		$	(0.57	)	$	6.48
Diluted	$	5.08		$	(0.57	)	$	6.45

Reinsurance

12 Months Ended

Dec. 31, 2019

Reinsurance Disclosures [Abstract]

Reinsurance

The Company utilizes reinsurance agreements primarily to: (a) reduce required capital and (b) facilitate the acquisition or disposition of certain insurance contracts. Ceded reinsurance agreements permit the Company to recover a portion of its losses from reinsurers, although they do not discharge the Company’s primary liability as the direct insurer of the risks reinsured.

On November 30, 2018, the Company completed the sale of Aetna’s standalone Medicare Part D prescription drug plans to a subsidiary of WellCare Health Plans, Inc. (“WellCare”), effective December 31, 2018. In connection with that sale, subsidiaries of WellCare and Aetna entered into reinsurance agreements under which WellCare ceded to Aetna 100% of the insurance risk related to the divested standalone Medicare Part D prescription drug plans for the 2019 PDP plan year.

In January 2020, the Company entered into two four-year reinsurance agreements with an unrelated reinsurer that allow it to reduce required capital and provide collateralized excess of loss reinsurance coverage on a portion of the Health Care Benefits segment’s group Commercial Insured business.

Reinsurance recoverables (recorded as other current assets or other assets on the consolidated balance sheets) at December 31, 2019 and 2018 were as follows:



In millions	2019		2018
Reinsurer
Hartford Life and Accident Insurance Company	$	3,085	$	3,470
Lincoln Life & Annuity Company of New York	413		424
WellCare Health Plans	355		—
VOYA Retirement Insurance and Annuity Company	175		186
All Other	103		461
Total	$	4,131	$	4,541

Prior to the Aetna Acquisition Date, the Company had no material assumed or ceded premiums or benefit costs. Accordingly, the Company has not provided disclosure of these amounts for periods prior to 2018.

Direct, assumed and ceded premiums earned for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Direct	$	62,968		$	8,365
Assumed	2,108			38
Ceded	(1,954		)	(219		)
Net premiums	$	63,122		$	8,184

The impact of reinsurance on benefit costs for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Direct	$	52,592		$	6,773
Assumed	1,562			32
Ceded	(1,625		)	(211		)
Net benefit costs	$	52,529		$	6,594

There is not a material difference between premiums on a written basis versus an earned basis.

The Company also has various agreements with unrelated reinsurers that do not qualify for reinsurance accounting under GAAP, and consequently are accounted for using deposit accounting. The Company entered into these contracts to reduce the risk of catastrophic loss which in turn reduces the Company’s capital and surplus requirements. Total deposit assets and liabilities related to reinsurance agreements that do not qualify for reinsurance accounting under GAAP were not material as of December 31, 2019 or 2018.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Guarantees

The Company has the following significant guarantee arrangements at December 31, 2019:

•

ASC Claim Funding Accounts - The Company has arrangements with certain banks for the processing of claim payments for its ASC customers. The banks maintain accounts to fund claims of the Company’s ASC customers. The customer is responsible for funding the amount paid by the bank each day. In these arrangements, the Company guarantees that the banks will not sustain losses if the responsible ASC customer does not properly fund its account. The aggregate maximum exposure under these arrangements is generally limited to $250 million. The Company can limit its exposure to these guarantees by suspending the payment of claims for ASC customers that have not adequately funded the amount paid by the bank.


•	Separate Accounts Assets - Certain Separate Accounts assets associated with the large case pensions business in the Corporate/Other segment represent funds maintained as a contractual requirement to fund specific pension annuities that the Company has guaranteed. Minimum contractual obligations underlying the guaranteed benefits in these Separate

Accounts were approximately $1.4 billion at both December 31, 2019 and 2018. See Note 1 ‘‘Significant Accounting Policies’’ for additional information on Separate Accounts. Contract holders assume all investment and mortality risk and are required to maintain Separate Accounts balances at or above a specified level. The level of required funds is a function of the risk underlying the Separate Account’s investment strategy. If contract holders do not maintain the required level of Separate Accounts assets to meet the annuity guarantees, the Company would establish an additional liability. Contract holders’ balances in the Separate Accounts at December 31, 2019 exceeded the value of the guaranteed benefit obligation. As a result, the Company was not required to maintain any additional liability for its related guarantees at December 31, 2019.

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. As of December 31, 2019, the Company guaranteed 79 such store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the consolidated balance sheet), with the maximum remaining lease term extending through 2030.

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 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 ACA.

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 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. 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.

The Company’s total guaranty fund assessments liability was $84 million and $90 million at December 31, 2019 and 2018, respectively, and was recorded in accrued expenses on the consolidated balance sheets.

Litigation and Regulatory Proceedings

The Company is a party to numerous legal proceedings, investigations, audits and claims arising, for the most part, in the ordinary course of its businesses, including the matters described below. 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. It is reasonably possible that the outcome of such legal matters could be material to the Company.

Usual and Customary Litigation

The Company is named as a defendant in a number of lawsuits that allege that the Company’s retail stores overcharged for prescription drugs by not providing the correct usual and customary charge.

Corcoran et al. v. CVS Health Corporation (U.S. District Court for the Northern District of California) and Podgorny et al. v. CVS Health Corporation (U.S. District Court for the Northern District of Illinois). These putative class actions were filed against the Company in July and September 2015. The cases were consolidated in the U.S. District Court for the Northern District of California. Plaintiffs seek damages and injunctive relief under the consumer protection statutes of certain states on behalf of a class of consumers who purchased certain prescription drugs. Several third-party payors filed similar putative class actions on behalf of payors captioned Sheet Metal Workers Local No. 20 Welfare and Benefit Fund v. CVS Health Corp. and Plumbers Welfare Fund, Local 130 v. CVS Health Corporation (both pending in the U.S. District Court for the District of Rhode Island) in February and August 2016. In all of these cases the plaintiffs allege the Company overcharged for certain prescription drugs by not submitting the price available to members of the CVS Health Savings Pass program as the pharmacy’s usual and customary price. In the Corcoran case, the U.S. District Court granted summary judgment to CVS on plaintiffs’ claims in their entirety and certified certain subclasses in September 2017. In June 2019, the U.S. Court of Appeals for the Ninth Circuit reversed the U.S. District Court’s grant of summary judgment and reversed the U.S. District Court’s narrowing of the requested class. The Corcoran case is proceeding to a trial on a six state class basis, and trial is scheduled to occur in 2020. The Sheet Metal Workers plaintiffs have amended their complaint to assert a claim under the federal Racketeer Influenced and Corrupt Organizations Act premised on an alleged conspiracy between the Company and other PBMs. The Company is defending itself against these claims.

State of California ex rel. Matthew Omlansky v. CVS Caremark Corporation (Superior Court of the State of California, County of Sacramento). In April 2016, the California Superior Court unsealed a first amended qui tam complaint filed in July 2013. The government has declined to intervene in this case. The relator alleges that the Company submitted false claims for payment to the California Medicaid program in connection with reimbursement for drugs available through the CVS Health Savings Pass program as well as certain other generic drugs. The case has been stayed pending the relator’s appeal of the judgment against him in a similar case against another retailer. The Company is defending itself against these claims.

State of Mississippi v. CVS Health Corporation, et al. (Circuit Court of DeSoto County, Mississippi, Third Judicial District). In July 2016, the Company was served with a complaint filed on behalf of the State of Mississippi. The complaint alleged that CVS retail pharmacies in Mississippi submitted false claims for reimbursement to the Mississippi Medicaid program by not submitting the price available to members of the CVS Health Savings Pass program as the pharmacy’s usual and customary price. In June 2019, the Company’s motion for judgment on the pleadings was granted in part and denied in part. Also in June 2019, the State of Mississippi’s motion to dismiss the Company’s counterclaim for declaratory relief was granted. 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.

Klein, et al. v. Prime Therapeutics, et al. (U.S. District Court for the District of Minnesota). This putative class action was filed against the Company and other PBMs in June 2017 on behalf of ERISA plan members who purchased and paid for EpiPen or EpiPen Jr. Plaintiffs allege that the PBMs are ERISA fiduciaries to plan members and have violated ERISA by allegedly causing higher inflated prices for EpiPens through the process of negotiating increased rebates from EpiPen manufacturer Mylan. This case has been consolidated with a similar matter and is now proceeding as In re EpiPen ERISA Litigation. The Company is defending itself against these claims.

County of Harris, Texas v. Eli Lilly and Company, et al. (U.S. District Court for the Southern District of Texas). This lawsuit was filed against Caremark, Aetna, the manufacturers of insulin and other PBMs in November 2019 by Harris County. Harris County alleges that it was overcharged for insulin as a result of a “price fixing conspiracy” between the manufacturers and PBMs to artificially increase the price of insulin and other diabetes medications. The complaint alleges that the manufacturers and PBMs engaged in an “Insulin Pricing Scheme” whereby the manufacturers artificially increased the reported prices of their insulin products while “secretly” paying rebates to the PBMs in exchange for preferred treatment on the PBMs’ drug formularies. The Company is defending itself against these claims.

In March 2017, Advanced Care Scripts, a subsidiary acquired in the Omnicare transaction that is now part of the Company’s PBM specialty operations, received a subpoena from the U.S. Department of Justice (the “DOJ”) requesting documents concerning its work with pharmaceutical manufacturers and charitable foundations that provide payment assistance to Medicare patients in connection with an investigation concerning potential violations of the federal Anti-Kickback Statute and/or federal False Claims Act. The Company has been cooperating with the government with respect to this subpoena and additional requests for information.

The Company has received subpoenas, CIDs and other requests for documents and information from, and is being investigated by, Attorneys General of several states regarding its PBM practices, including pricing and rebates. In addition, the Company has received inquiries from congressional committees regarding insulin pricing. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information.

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 generally concerning the impacts of widespread 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 states. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information.

The Company routinely is audited by the U.S. Drug Enforcement Administration (the “DEA”). In some instances, the Company is in discussions with the DEA and U.S. Attorney’s Offices concerning allegations that the Company violated certain requirements of the federal Controlled Substances Act.

In September 2015, the DEA served the Company with an administrative subpoena. The subpoena seeks documents related to controlled substance policies, procedures and practices at eight Omnicare pharmacy locations from May 2012 to the present. In September 2017, the DEA expanded the investigation to include an additional Omnicare pharmacy location. The Company has been cooperating with the government and providing documents and witnesses in response to this subpoena.

In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to opioids and other controlled substances at CVS Pharmacy locations in connection with an investigation concerning potential violations of the federal Controlled Substances Act and the federal False Claims Act. The Company has been cooperating with the government with respect to this subpoena.

Prescription Processing Litigation and Investigations

U.S. ex rel. Bassan et al. v. Omnicare, Inc. and CVS Health Corp. and U.S. ex rel. Mohajer 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 complaints-in-intervention in these two previously sealed qui tam cases. With respect to the Bassan complaint, all states except Washington, D.C. and Indiana have declined to intervene; Washington, D.C. has intervened, and Indiana has not filed a decision on intervention. The government’s investigation related to these complaints included the previously disclosed CID that the Company received in October 2015 from the SDNY concerning the Company’s Omnicare pharmacies’ cycle fill process for assisted living facilities. The complaints allege 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.

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.

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.

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 health care 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 these services and/or otherwise allege that the Company failed to timely or appropriately pay or administer 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 health care 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 health care 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 Health and Human Services (the “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, the U.S. Department of Health and Human Services or otherwise, including audits of the Company’s minimum MLR rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, financial condition and/or cash flows.

Medicare 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.

Stockholder Matters

The Company and/or its current and/or former directors and/or executive officers are named as defendants in a number of lawsuits and a request for access to information initiated by holders or putative holders of CVS Health common stock.

Between February and August 2019, six class action complaints were filed by putative plaintiffs against the Company and certain current and former officers and directors: Anarkat v. CVS Health Corp., et al. (U.S. District Court for the District of Rhode Island); Labourers’ Pension Fund of Central and Eastern Canada v. CVS Health Corp., et al. (New York Supreme Court); City of Warren Police and Fire Retirement Sys.v. CVS Health Corp., et. al. (Rhode Island Superior Court); Cambria Co. Employees Retirement Sys. v. CVS Health Corp., et al. (New York Supreme Court); Freundlich v. CVS Health Corp., et al. (Rhode Island Superior Court); and Waterford Twp. Police & Fire Retirement Sys. v. CVS Health Corp., et al. (U.S. District Court for the District of Rhode Island). 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, which allegedly injured investors who acquired CVS Health securities between February 9, 2016 and February 20, 2019. The Freundlich case also alleges that defendants misrepresented anticipated synergies of the Aetna Acquisition. Plaintiffs in the Freundlich and the City of Warren cases have filed a consolidated complaint that combines their allegations. The Company is defending itself against these claims.

In January 2020, a derivative complaint was filed against the Company’s directors and current and former executive officers in the U.S. District Court for the District of Rhode Island by a stockholder. Lovoi v. Aguirre, et al. makes allegations similar to those contained the six stockholder class action complaints described above, including that the Company made false or misleading statements about its LTC business unit’s financial health. The Lovoi complaint alleges claims for breach of fiduciary duty against the Company’s directors and certain of its current and former executive officers and for violation of the federal securities laws. The Lovoi complaint seeks damages, restitution and equitable relief on behalf of the Company. The Company’s directors and current and former executive officers are defending themselves against these claims.

In November 2019, the Company received a demand to inspect its books and records under Delaware General Corporation Law Section 220 from purported stockholder Judith B. Cohen. The demand seeks various documents related to the Company’s LTC operations, its financial condition and its goodwill impairment charges, as well as more general information regarding share repurchases, director nominations and charitable donations. The Company has objected to this request.

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, arising, for the most part, in the ordinary course of its businesses. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, 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 care 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.

Segment Reporting

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

The Company has three operating segments, Pharmacy Services, Retail/LTC and Health Care Benefits, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the 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. Effective for the first quarter of 2019, adjusted operating income is defined as operating income (GAAP measure) excluding the impact of amortization of intangible assets and other items, if any, that neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. Segment financial information has been retrospectively adjusted to conform with the current period presentation. See the reconciliation of consolidated operating income (GAAP measure) to adjusted operating income below for further context regarding the items excluded from operating income in determining adjusted operating income. The Company uses adjusted operating income as its principal measure of segment performance as it enhances the Company’s ability to compare past financial performance with current performance and analyze underlying business performance and trends. Non-GAAP financial measures the Company discloses, such as consolidated adjusted operating income, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.

Effective for the first quarter of 2019, the Company realigned the composition of its segments to correspond with changes to its operating model and reflect how its CODM reviews information and manages the business. See Note 1 ‘‘Significant Accounting Policies’’ for further discussion of this realignment. Segment financial information has been retrospectively adjusted to reflect these changes.

In 2018 and 2017, approximately 9.8% and 12.3%, respectively, of the Company’s consolidated revenues were from Aetna, a Pharmacy Services segment client. On November 28, 2018, the Company completed the Aetna Acquisition. Subsequent to the Aetna Acquisition, transactions with Aetna continue to be reported within the Pharmacy Services segment, but are eliminated in the Company’s consolidated financial statements.



In millions	Pharmacy Services ⁽¹⁾		Retail/ LTC		Health Care Benefits		Corporate/ Other			Intersegment Eliminations ⁽²⁾			Consolidated Totals
2019:
Revenues from customers	$	141,491	$	86,608	$	69,005	$	100		$	(41,439	)	$	255,765
Net investment income	—		—		599		412			—			1,011
Total revenues	141,491		86,608		69,604		512			(41,439		)	256,776
Adjusted operating income (loss)	5,129		6,705		5,202		(1,000		)	(697		)	15,339
Depreciation and amortization	766		1,723		1,721		161			—			4,371
Additions to property and equipment	332		1,212		533		404			—			2,481
2018:
Revenues from customers	134,736		83,989		8,904		4			(33,714		)	193,919
Net investment income	—		—		58		602			—			660
Total revenues	134,736		83,989		8,962		606			(33,714		)	194,579
Adjusted operating income (loss)	4,955		7,403		528		(856		)	(769		)	11,261
Depreciation and amortization	710		1,698		172		138			—			2,718
Additions to property and equipment	326		1,350		46		401			—			2,123
2017:
Revenues from customers	130,822		79,398		3,582		—			(29,037		)	184,765
Net investment income	—		—		5		16			—			21
Total revenues	130,822		79,398		3,587		16			(29,037		)	184,786
Adjusted operating income (loss)	4,628		7,475		359		(896		)	(741		)	10,825
Depreciation and amortization	710		1,651		2		116			—			2,479
Additions to property and equipment	311		1,398		—		340			—			2,049

^{_____________________________________________}


(1)	Total revenues of the Pharmacy Services segment include approximately $11.5 billion, $11.4 billion and $10.8 billion of retail co-payments for 2019, 2018 and 2017, respectively. See Note 1 ‘‘Significant Accounting Policies’’ for additional information about retail co-payments.


(2)	Intersegment eliminations relate to intersegment revenue generating activities that occur between the Pharmacy Services segment, the Retail/LTC segment and/or the Health Care Benefits segment.

The following is a reconciliation of consolidated operating income to adjusted operating income for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018			2017
Operating income (GAAP measure)	$	11,987	$	4,021		$	9,538
Amortization of intangible assets ⁽¹⁾	2,436		1,006			817
Acquisition-related transaction and integration costs ⁽²⁾	480		492			65
Store rationalization charges ⁽³⁾	231		—			215
Loss on divestiture of subsidiary ⁽⁴⁾	205		86			9
Goodwill impairments ⁽⁵⁾	—		6,149			181
Impairment of long-lived assets ⁽⁶⁾	—		43			—
Interest income on financing for the Aetna Acquisition ⁽⁷⁾	—		(536		)	—
Adjusted operating income	$	15,339	$	11,261		$	10,825

^{_____________________________________________}

(1)

The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s 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)

In 2019, 2018 and 2017, acquisition-related transaction and integration costs relate to the Aetna Acquisition. In 2018 and 2017, acquisition-related transaction and integration costs also relate to the acquisition of Omnicare. The acquisition-related transaction and integration costs are reflected in the Company’s consolidated statements of operations in operating expenses within the Corporate/Other segment and the Retail/LTC segment.

(3)

In 2019, the store rationalization charges relate to the planned closure of 46 underperforming retail pharmacy stores during the second quarter of 2019 and the planned closure of 22 underperforming retail pharmacy stores during the first quarter of 2020. In 2019, the store rationalization charges primarily relate to operating lease right-of-use asset impairment charges and are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment. In 2017, the store rationalization charges related to the Company’s enterprise streamlining initiative and are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment.

(4)

In 2019, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of Onofre, which occurred on July 1, 2019. The loss on divestiture primarily relates to the elimination of the cumulative translation adjustment from accumulated other comprehensive income. In 2018, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of the Company’s RxCrossroads subsidiary for $725 million on January 2, 2018. In 2017, the loss on divestiture of subsidiary represents transaction costs associated with the sale of RxCrossroads. The losses on divestiture of subsidiary are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment and Corporate/Other segment.


(5)	In 2018, the goodwill impairments relate to the LTC reporting unit within the Retail/LTC segment. In 2017, the goodwill impairments relate to the RxCrossroads reporting unit within the Retail/LTC segment.


(6)	In 2018, impairment of long-lived assets primarily relates to the impairment of property and equipment within the Retail/LTC segment and is reflected in operating expenses in the Company’s consolidated statements of operations.

(7)

In 2018, the Company recorded interest income of $536 million on the proceeds of the $40 billion of unsecured senior notes it issued in March 2018 to partially fund the Aetna Acquisition. All amounts are for the periods prior to the close of the Aetna Acquisition, which occurred on November 28, 2018, and were recorded within the Corporate/Other segment.

Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)



In millions, except per share amounts	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
2019:
Total revenues	$	61,646	$	63,431	$	64,810	$	66,889	$	256,776
Operating income	2,690		3,332		2,928		3,037		11,987
Income from continuing operations	1,427		1,931		1,529		1,744		6,631
Net income attributable to CVS Health	1,421		1,936		1,530		1,747		6,634
Per common share data:
Basic earnings per common share:
Income from continuing operations attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.34	$	5.10
Income from discontinued operations attributable to CVS Health	$	—	$	—	$	—	$	—	$	—
Net income attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.34	$	5.10
Diluted earnings per common share:
Income from continuing operations attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.33	$	5.08
Income from discontinued operations attributable to CVS Health	$	—	$	—	$	—	$	—	$	—
Net income attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.33	$	5.08
Dividends per common share	$	0.50	$	0.50	$	0.50	$	0.50	$	2.00



In millions, except per share amounts	First Quarter		Second Quarter			Third Quarter		Fourth Quarter			Year
2018:
Total revenues	$	45,743	$	46,922		$	47,490	$	54,424		$	194,579
Operating income (loss)	1,996		(1,373		)	2,574		824			4,021
Income (loss) from continuing operations	998		(2,562		)	1,390		(422		)	(596		)
Net income (loss) attributable to CVS Health	998		(2,563		)	1,390		(419		)	(594		)
Per common share data:
Basic earnings (loss) per common share:
Income (loss) from continuing operations attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Income (loss) from discontinued operations attributable to CVS Health	$	—	$	—		$	—	$	—		$	—
Net income (loss) attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Diluted earnings (loss) per common share:
Income (loss) from continuing operations attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Income (loss) from discontinued operations attributable to CVS Health	$	—	$	—		$	—	$	—		$	—
Net income (loss) attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Dividends per common share	$	0.50	$	0.50		$	0.50	$	0.50		$	2.00

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Segment Policy

On November 28, 2018 (the “Aetna Acquisition Date”), the Company acquired Aetna Inc. (“Aetna”). As a result of the acquisition of Aetna (the “Aetna Acquisition”), the Company added the Health Care Benefits segment. Certain aspects of Aetna’s operations, including products for which the Company no longer solicits or accepts new customers, such as large case pensions and long-term care insurance products, are included in the Company’s Corporate/Other segment. The consolidated financial statements reflect Aetna’s results subsequent to the Aetna Acquisition Date.

Effective for the first quarter of 2019, the Company realigned the composition of its segments to correspond with changes to its operating model and reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company’s SilverScript^® PDP moved from the Pharmacy Services segment to the Health Care Benefits segment. In addition, the Company moved Aetna’s mail order and specialty pharmacy operations from the Health Care Benefits segment to the Pharmacy Services segment. Segment financial information has been retrospectively adjusted to reflect these changes.

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

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, mail order pharmacy, specialty pharmacy and infusion services, clinical services, disease management services and medical spend management. 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 health insurance exchanges (“Public Exchanges”) and private health insurance exchanges, other sponsors of health benefit plans and individuals throughout the United States. 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 general merchandise, including over-the-counter drugs, beauty products, cosmetics and personal care products, provides health care services through its MinuteClinic^® walk-in medical clinics and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to chronic care facilities and other care settings. As of December 31, 2019, the Retail/LTC segment operated approximately 9,900 retail locations, approximately 1,100 MinuteClinic^® locations as well as online retail pharmacy websites, LTC pharmacies and onsite pharmacies.

Health Care Benefits Segment

The Health Care Benefits segment is one of the nation’s leading diversified health care benefits providers, serving an estimated 37 million people as of December 31, 2019. 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, workers’ compensation administrative services and health information technology products and services. The Health Care Benefit 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.” For periods prior to November 28, 2018 (the Aetna Acquisition Date), the Health Care Benefits segment was comprised of the Company’s SilverScript PDP business.

Corporate/Other Segment

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

•

Management and administrative expenses to support the overall operations of the Company, 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 transaction and 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 consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The 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.

Reclassifications

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

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and temporary investments with maturities of three months or less when purchased. The Company invests in short-term money market funds, commercial paper and time deposits, as well as other debt securities that are classified as cash equivalents within the accompanying consolidated balance sheets, as these funds are highly liquid and readily convertible to known amounts of cash.

Restricted Cash

Restricted cash included in other current assets on the consolidated balance sheets represents amounts held in escrow accounts in connection with certain recent acquisitions. Restricted cash included in other assets on the 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, money market funds or commercial paper.

Investments

Debt Securities

Debt securities consist primarily of U.S. Treasury and agency securities, mortgage-backed securities, corporate and foreign bonds and other debt securities. Debt securities are classified as either current or long-term investments based on their contractual maturities unless the Company intends to sell an investment within the next twelve months, in which case it is classified as current on the consolidated balance sheets. Debt securities are classified as available for sale and are carried at fair value. See Note 4 ‘‘Fair Value’’ for additional information on how the Company estimates the fair value of these investments.

The cost for mortgage-backed and other asset-backed securities is adjusted for unamortized premiums and discounts, which are amortized using the interest method over the estimated remaining term of the securities, adjusted for anticipated prepayments.

The Company regularly reviews its debt securities to determine whether a decline in fair value below the cost basis or carrying value is other-than-temporary. When a debt security is in an unrealized capital loss position, the Company monitors the duration and severity of the loss to determine if sufficient market recovery can occur within a reasonable period of time. If a decline in the fair value of a debt security is considered other-than-temporary, the cost basis or carrying value of the debt security is written down. The write-down is then bifurcated into its credit and non-credit related components. The amount of the credit-related component is included in the Company’s net income (loss), and the amount of the non-credit related component is included in other comprehensive income (loss), unless the Company intends to sell the debt security or it is more likely than not that the Company will be required to sell the debt security prior to its anticipated recovery of the debt security’s amortized cost basis. Interest is not accrued on debt securities when management believes the collection of interest is unlikely.

Equity Securities

Equity securities with readily available fair values are measured at fair value with changes in fair value recognized in net income (loss).

Mortgage Loans

Mortgage loan investments on the consolidated balance sheets are valued at the unpaid principal balance, net of impairment reserves. A mortgage loan may be impaired when it is a problem loan (i.e., more than 60 days delinquent, in bankruptcy or in process of foreclosure), a potential problem loan (i.e., high probability of default) or a restructured loan. For impaired loans, a specific impairment reserve is established for the difference between the recorded investment in the loan and the estimated fair value of the collateral. The Company applies its loan impairment policy individually to all loans in its portfolio.

The impairment evaluation described above also considers characteristics and risk factors attributable to the aggregate portfolio. An additional allowance for loan losses is established if it is probable that there will be a credit loss on a group of similar mortgage loans. The following characteristics and risk factors are considered when evaluating if a credit loss is probable on a group of similar mortgage loans: loan-to-value ratios, property type (e.g., office, retail, apartment, industrial), geographic location, vacancy rates and property condition.

Full or partial impairments of loans are recorded at the time an event occurs affecting the legal status of the loan, typically at the time of foreclosure or upon a loan modification giving rise to forgiveness of debt. Interest income on a potential problem loan or restructured loan is accrued to the extent it is deemed to be collectible and the loan continues to perform under its original or restructured terms. Interest income on problem loans is recognized on a cash basis. Cash payments on loans in the process of foreclosure are treated as a return of principal. Mortgage loans with a maturity date or a committed prepayment date within twelve months are classified as current on the consolidated balance sheets.

Other Investments

Other investments consist primarily of the following:

•

Private equity and hedge fund limited partnerships, which are accounted for using the equity method of accounting. Under this method, the carrying value of the investment is based on the value of the Company’s equity ownership of the underlying investment funds provided by the general partner or manager of the investments, the financial statements of which generally are audited. As a result of the timing of the receipt of the valuation information provided by the fund managers, these investments are generally reported on up to a three month lag. The Company reviews investments for impairment at least quarterly and monitors their performance throughout the year through discussions with the administrators, managers and/or general partners. If the Company becomes aware of an impairment of a limited partnership’s investments through its review or prior to receiving the limited partnership’s financial statements at the

financial statement date, an impairment will be recognized by recording a reduction in the carrying value of the limited partnership with a corresponding charge to net investment income.

•

Investment real estate, which is carried on the consolidated balance sheets at depreciated cost, including capital additions, net of write-downs for other-than-temporary declines in fair value. Depreciation is calculated using the straight-line method based on the estimated useful life of each asset. If any real estate investment is considered held-for-sale, it is carried at the lower of its carrying value or fair value less estimated selling costs. The Company generally estimates fair value using a discounted future cash flow analysis in conjunction with comparable sales information. At the time of the sale, the difference between the sales price and the carrying value is recorded as a realized capital gain or loss.


•	Privately-placed equity securities, which are carried on the consolidated balance sheets at cost less impairments, plus or minus subsequent adjustments for observable price changes. Additionally, as a member of the Federal Home Loan Bank of Boston (“FHLBB”), a subsidiary of the Company is required to purchase and hold shares of the FHLBB. These shares are restricted and carried at cost.

Net Investment Income

Net investment income on the Company’s investments is recorded when earned and is reflected in the Company’s net income (loss) (other than net investment income on assets supporting experience-rated products). Experience-rated products are products in the large case pensions business where the contract holder, not the Company, assumes investment and other risks, subject to, among other things, minimum guarantees provided by the Company. The effect of investment performance on experience-rated products is allocated to contract holders’ accounts daily, based on the underlying investment experience and, therefore, does not impact the Company’s net income (loss) (as long as the contract’s minimum guarantees are not triggered). Net investment income on assets supporting large case pensions’ experience-rated products is included in net investment income in the consolidated statements of operations and is credited to contract holders’ accounts through a charge to benefit costs.

Realized capital gains and losses on investments (other than realized capital gains and losses on investments supporting experience-rated products) are included as a component of net investment income in the consolidated statements of operations. Realized capital gains and losses are determined on a specific identification basis. Purchases and sales of debt and equity securities and alternative investments are reflected on the trade date. Purchases and sales of mortgage loans and investment real estate are reflected on the closing date.

Realized capital gains and losses on investments supporting large case pensions’ experience-rated products are not included in realized capital gains and losses in the consolidated statements of operations and instead are credited directly to contract holders’ accounts. The contract holders’ accounts are reflected in policyholders’ funds on the consolidated balance sheets.

Unrealized capital gains and losses on investments (other than unrealized capital gains and losses on investments supporting experience-rated products) are reflected in shareholders’ equity, net of tax, as a component of accumulated other comprehensive income. Unrealized capital gains and losses on investments supporting large case pensions’ experience-rated products are credited directly to contract holders’ accounts. The contract holders’ accounts are reflected in policyholders’ funds on the consolidated balance sheets.

Derivative Financial Instruments

The Company uses derivative financial instruments in order to manage interest rate and foreign exchange risk and credit exposure. The Company’s use of these derivatives is generally limited to hedging risk and has principally consisted of using interest rate swaps, treasury rate locks, forward contracts, futures contracts, warrants, put options and credit default swaps.

Accounts Receivable

Accounts receivable are stated net of allowances for doubtful accounts, customer credit allowances, contractual allowances and estimated terminations.

Inventories

Inventories are valued at the lower of cost or net realizable value using the weighted average cost method. Physical inventory counts are taken on a regular basis in each retail store and LTC pharmacy, and a continuous cycle count process is the primary procedure used to validate the inventory balances on hand in each distribution center and mail facility to ensure that the amounts reflected in the consolidated financial statements are properly stated. During the interim period between physical inventory counts, the Company accrues for anticipated physical inventory losses on a location-by-location basis based on historical results and current physical inventory trends.

Reinsurance Recoverables

The Company utilizes reinsurance agreements primarily to: (a) reduce required capital and (b) facilitate the acquisition or disposition of certain insurance contracts. Ceded reinsurance agreements permit the Company to recover a portion of its losses from reinsurers, although they do not discharge the Company’s primary liability as the direct insurer of the risks reinsured. Failure of reinsurers to indemnify the Company could result in losses; however, the Company does not expect charges for unrecoverable reinsurance to have a material effect on its consolidated operating results or financial condition. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of its reinsurers. At December 31, 2019, the Company’s reinsurance recoverables consisted primarily of amounts due from third parties that are rated consistent with companies that are considered to have the ability to meet their obligations. Reinsurance recoverables are recorded as other current assets or other assets on the consolidated balance sheets.

Health Care Contract Acquisition Costs

Insurance products included in the Health Care Benefits segment are cancelable by either the customer or the member monthly upon written notice. Acquisition costs related to prepaid health care and health indemnity contracts are generally expensed as incurred. Acquisition costs for certain long-duration insurance contracts are deferred and are recorded as other current assets or other assets on the consolidated balance sheets and are amortized over the estimated life of the contracts. The amortization of deferred acquisition costs is recorded in operating expenses in the consolidated statements of operations.

Property and Equipment

Property and equipment is reported at historical cost, net of accumulated depreciation. Property, equipment and improvements to leased premises are depreciated using the straight-line method over the estimated useful lives of the assets, or when applicable, the term of the lease, whichever is shorter. Estimated useful lives generally range from 1 to 40 years for buildings, building improvements and leasehold improvements and 3 to 10 years for fixtures, equipment and internally developed software. Repair and maintenance costs are charged directly to expense as incurred. Major renewals or replacements that substantially extend the useful life of an asset are capitalized and depreciated. Application development stage costs for significant internally developed software projects are capitalized and depreciated.

Right-of-Use Assets and Lease Liabilities

The Company determines if an arrangement contains a lease at the inception of a contract. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the commencement date of the lease, renewal date of the lease or significant remodeling of the lease space based on the present value of the remaining future minimum lease payments. As the interest rate implicit in the Company’s leases is not readily determinable, the Company utilizes its incremental borrowing rate, determined by class of underlying asset, to discount the lease payments. The operating lease right-of-use assets also include lease payments made before commencement and are reduced by lease incentives.

The Company’s real estate leases typically contain options that permit renewals for additional periods of up to five years each. For real estate leases, the options to extend are not considered reasonably certain at lease commencement because the Company reevaluates each lease on a regular basis to consider the economic and strategic incentives of exercising the renewal options and regularly opens or closes stores to align with its operating strategy. Generally, the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the right-of-use asset and lease liability. Similarly, renewal options are not included in the lease term for non-real estate leases because they are not considered reasonably certain of being exercised at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheets, and lease expense is recognized on a straight-line basis over the term of the short-term lease.

For real estate leases, the Company accounts for lease components and nonlease components as a single lease component. Certain real estate leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed as incurred as variable lease costs. Other real estate leases contain one fixed lease payment that includes real estate taxes, common area maintenance and insurance. These fixed payments are considered part of the lease payment and included in the right-of-use assets and lease liabilities.

See Note 6 ‘‘Leases’’ for additional information about right-of-use assets and lease liabilities.

Goodwill

The Company accounts for business combinations using the acquisition method of accounting, which requires the excess cost of an acquisition over the fair value of net assets acquired and identifiable intangible assets to be recorded as goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently if necessary, as further described below.

Intangible Assets

The Company’s identifiable intangible assets consist primarily of trademarks, trade names, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired (“VOBA”). These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.

The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset. Other than VOBA, definite-lived intangible assets are amortized using the straight-line method. VOBA is amortized over the expected life of the acquired contracts in proportion to estimated premiums. Indefinite-lived intangible assets are not amortized but are tested for impairment annually, or more frequently if necessary, as further described in “Long-Lived Asset Impairment” below.

Long-Lived Asset Impairment

The Company evaluates the recoverability of long-lived assets, excluding goodwill and indefinite-lived intangible assets, which are tested for impairment using separate tests described below, whenever events or changes in circumstances indicate that the carrying value of such asset may not be recoverable. The Company groups and evaluates these long-lived assets for impairment at the lowest level at which individual cash flows can be identified. If indicators of impairment are present, the Company first compares the carrying amount of the asset group to the estimated future cash flows associated with the asset group (undiscounted and without interest charges). If the estimated future cash flows used in this analysis are less than the carrying amount of the asset group, an impairment loss calculation is prepared. The impairment loss calculation compares the carrying amount of the asset group to the asset group’s estimated future cash flows (discounted and with interest charges). If required, an impairment loss is recorded for the portion of the asset group’s carrying value that exceeds the asset group’s estimated future cash flows (discounted and with interest charges). During the year ended December 31, 2019, the Company recorded store rationalization charges of $231 million, primarily related to operating lease right-of-use asset impairment charges. See Note 6 ‘‘Leases’’ for additional information about the right-of-use asset impairment charges. During the year ended December 31, 2018, the Company recognized a $43 million long-lived asset impairment charge, primarily related to the impairment of property and equipment. There were no material impairment charges recognized on long-lived assets in the year ended December 31, 2017.

When evaluating goodwill for potential impairment, the Company compares the fair value of its reporting units to their respective carrying amounts. The Company estimates the fair value of its reporting units using a combination of a discounted cash flow method and a market multiple method. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess. During the third quarter of 2019, the Company performed its required annual goodwill impairment tests and concluded there were no goodwill impairments as of the testing date. See Note 5 ‘‘Goodwill and Other Intangibles’’ for additional information about goodwill impairment charges recorded during the years ended December 31, 2018 and 2017.

Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to its carrying value. The Company estimates the fair value of its indefinite-lived trademarks using the relief from royalty method under the income approach. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value.

Separate Accounts

Separate Accounts assets and liabilities related to large case pensions products represent funds maintained to meet specific objectives of contract holders who bear the investment risk. These assets and liabilities are carried at fair value. Net investment income (including net realized capital gains and losses) accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals and net investment income (including net realized and net unrealized capital gains and losses) on Separate Accounts assets are not reflected in the consolidated statements of operations or cash flows. Management fees charged to contract holders are included in services revenue and recognized over the period earned.

Health Care Costs Payable

Health care costs payable consist principally of unpaid fee-for-service medical, dental and pharmacy claims, capitation costs, other amounts due to health care providers pursuant to risk-sharing arrangements related to the Health Care Benefits segment’s Insured Commercial, Medicare and Medicaid products and accruals for state assessments. Unpaid health care claims include an estimate of payments the Company will make for (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, each as of the financial statement date (collectively, “IBNR”). Health care costs payable also include an estimate of the cost of services that will continue to be rendered after the financial statement date if the Company is obligated to pay for such services in accordance with contractual or regulatory requirements. Such estimates are developed using actuarial principles and assumptions which consider, among other things, historical and projected claim submission and processing patterns, assumed and historical medical cost trends, historical utilization of medical services, claim inventory levels, changes in Insured membership and product mix, seasonality and other relevant factors. The Company reflects changes in these estimates in benefit costs in the Company’s consolidated operating results in the period they are determined. Capitation costs represent contractual monthly fees paid to participating physicians and other medical providers for providing medical care, regardless of the volume of medical services provided to the Insured member. Amounts due under risk-sharing arrangements are based on the terms of the underlying contracts with the providers and consider claims experience under the contracts through the financial statement date.

The Company develops its estimate of IBNR using actuarial principles and assumptions that consider numerous factors. Of those factors, the Company considers the analysis of historical and projected claim payment patterns (including claims submission and processing patterns) and the assumed health care cost trend rate (the year-over-year change in per member per month health care costs) to be the most critical assumptions. In developing its IBNR estimate, the Company consistently applies these actuarial principles and assumptions each period, with consideration to the variability of related factors. There have been no significant changes to the methodologies or assumptions used to develop the Company’s estimate of IBNR in 2019.

The Company analyzes historical claim payment patterns by comparing claim incurred dates (i.e., the date services were provided) to claim payment dates to estimate “completion factors.” The Company uses completion factors predominantly to estimate the ultimate cost of claims incurred more than three months before the financial statement date. The Company estimates completion factors by aggregating claim data based on the month of service and month of claim payment and estimating the percentage of claims incurred for a given month that are complete by each month thereafter. For any given month, substantially all claims are paid within six months of the date of service, but it can take up to 48 months or longer after the date of service before all of the claims are completely resolved and paid. These historically-derived completion factors are then applied to claims paid through the financial statement date to estimate the ultimate claim cost for a given month’s incurred claim activity. The difference between the estimated ultimate claim cost and the claims paid through the financial statement date represents the Company’s estimate of claims remaining to be paid as of the financial statement date and is included in the Company’s health care costs payable. The completion factors the Company uses reflect judgments and possible adjustments based on data such as claim inventory levels, claim submission and processing patterns and, to a lesser extent, other factors such as changes in health care cost trend rates, changes in Insured membership and changes in product mix. If claims are submitted or processed on a faster (slower) pace than prior periods, the actual claims may be more (less) complete than originally estimated using the Company’s completion factors, which may result in reserves that are higher (lower) than the ultimate cost of claims.

Because claims incurred within three months before the financial statement date are less mature, the Company uses a combination of historically-derived completion factors and the assumed health care cost trend rate to estimate the ultimate cost of claims incurred for these months. The Company applies its actuarial judgment and places a greater emphasis on the assumed health care cost trend rate for the most recent claim incurred dates as these months may be influenced by seasonal patterns and changes in membership and product mix.

The Company’s health care cost trend rate is affected by changes in per member utilization of medical services as well as changes in the unit cost of such services. Many factors influence the health care cost trend rate, including the Company’s ability to manage benefit costs through product design, negotiation of favorable provider contracts and medical management programs, as well as the mix of the Company’s business. The health status of the Company’s Insured members, aging of the population and other demographic characteristics, advances in medical technology and other factors continue to contribute to rising per member utilization and unit costs. Changes in health care practices, inflation, new technologies, increases in the cost of prescription drugs (including specialty pharmacy drugs), direct-to-consumer marketing by pharmaceutical companies, clusters of high-cost cases, claim intensity, changes in the regulatory environment, health care provider or member fraud and numerous other factors also contribute to the cost of health care and the Company’s health care cost trend rate.

For each reporting period, the Company uses an extensive degree of judgment in the process of estimating its health care costs payable. As a result, considerable variability and uncertainty is inherent in such estimates, particularly with respect to claims with claim incurred dates of three months or less before the financial statement date; and the adequacy of such estimates is highly sensitive to changes in assumed completion factors and the assumed health care cost trend rates. For each reporting period the Company recognizes the actuarial best estimate of health care costs payable considering the potential volatility in assumed completion factors and health care cost trend rates, as well as other factors. The Company believes its estimate of health care costs payable is reasonable and adequate to cover its obligations at December 31, 2019; however, actual claim payments may differ from the Company’s estimates. A worsening (or improvement) of the Company’s health care cost trend rates or changes in completion factors from those that the Company assumed in estimating health care costs payable at December 31, 2019 would cause these estimates to change in the near term, and such a change could be material.

Each quarter, the Company re-examines previously established health care costs payable estimates based on actual claim payments for prior periods and other changes in facts and circumstances. Given the extensive degree of judgment in this estimate, it is possible that the Company’s estimates of health care costs payable could develop either favorably (that is, its actual benefit costs for the period were less than estimated) or unfavorably. The changes in the Company’s estimate of health care costs payable may relate to a prior quarter, prior year or earlier periods. For a roll forward of the Company’s health care costs payable, see Note 7 ‘‘Health Care Costs Payable.’’ The Company’s reserving practice is to consistently recognize the actuarial best estimate of its ultimate liability for health care costs payable.

Other Insurance Liabilities

Unpaid Claims

Unpaid claims consist primarily of reserves associated with certain short-duration group disability and term life insurance contracts, including an estimate for IBNR as of the financial statement date. Reserves associated with certain short-duration group disability and term life insurance contracts are based upon the Company’s estimate of the present value of future benefits, which is based on assumed investment yields and assumptions regarding mortality, morbidity and recoveries from the U.S. Social Security Administration. The Company develops its estimate of IBNR using actuarial principles and assumptions which consider, among other things, contractual requirements, claim incidence rates, claim recovery rates, seasonality and other relevant factors. The Company discounts certain claim liabilities related to group long-term disability and life insurance waiver of premium contracts. The discount rates generally reflect the Company’s expected investment returns for the investments supporting all incurral years of these liabilities. The discount rates for retrospectively-rated contracts are set at contractually specified levels. The Company’s estimates of unpaid claims are subject to change due to changes in the underlying experience of the insurance contracts, changes in investment yields or other factors, and these changes are recorded in current and future benefits in the consolidated statements of operations in the period they are determined. The Company estimates its reserve for claims IBNR for life products largely based on completion factors. The completion factors used are based on the Company’s historical experience and reflect judgments and possible adjustments based on data such as claim inventory levels, claim payment patterns, changes in business volume and other factors. If claims are submitted or processed on a faster (slower) pace than historical periods, the actual claims may be more (less) complete than originally estimated using completion factors, which may result in reserves that are higher (lower) than required to cover future life benefit payments. There have been no significant changes to the methodologies or assumptions used to develop the Company’s estimate of unpaid claims IBNR in 2019. As of December 31, 2019, unpaid claims balances of $704 million and $1.8 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively. As of December 31, 2018, unpaid claims balances of $816 million and $1.9 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively.

Substantially all life and disability insurance liabilities have been fully ceded to unrelated third parties through indemnity reinsurance agreements; however, the Company remains directly obligated to the policyholders.

Future Policy Benefits

Future policy benefits consist primarily of reserves for limited payment pension and annuity contracts and long-term care insurance contracts. Reserves for limited payment pension and annuity contracts are computed using actuarial principles that consider, among other things, assumptions reflecting anticipated mortality, retirement, expense and interest rate experience. Such assumptions generally vary by plan, year of issue and policy duration. Assumed interest rates on such contracts ranged from 3.5% to 11.3% in the year ended December 31, 2019 and from the Aetna Acquisition Date through December 31, 2018. The Company periodically reviews mortality assumptions against both industry standards and its experience. Reserves for long-duration long-term care contracts represent the Company’s estimate of the present value of future benefits to be paid to or on behalf of policyholders less the present value of future net premiums. The assumed interest rate on such contracts was 5.1% in the year ended December 31, 2019 and from the Aetna Acquisition Date through December 31, 2018. The Company’s estimate of the present value of future benefits under such contracts is based upon mortality, morbidity and interest rate assumptions.

Premium Deficiency Reserves

The Company evaluates its insurance contracts to determine if it is probable that a loss will be incurred. A premium deficiency loss is recognized when it is probable that expected future claims, including maintenance costs (for example, direct costs such as claim processing costs), will exceed existing reserves plus anticipated future premiums and reinsurance recoveries. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts. For purposes of determining premium deficiency losses, contracts are grouped consistent with the Company’s method of acquiring, servicing and measuring the profitability of such contracts.

Policyholders' Funds

Policyholders’ Funds

Policyholders’ funds consist primarily of reserves for pension and annuity investment contracts and customer funds associated with certain health contracts. Reserves for such contracts are equal to cumulative deposits less withdrawals and charges plus interest credited thereon, net of experience-rated adjustments. In 2019, interest rates for pension and annuity investment contracts ranged from 3.5% to 15.0%. From the Aetna Acquisition Date through December 31, 2018, interest rates for pension and annuity investment contracts ranged from 3.5% to 13.4%. Reserves for contracts subject to experience rating reflect the Company’s rights as well as the rights of policyholders and plan participants. The Company also holds funds for health savings accounts (“HSAs”) on behalf of members associated with high deductible health plans. These amounts are held to pay for qualified health care expenses incurred by these members. The HSA balances were approximately $2.2 billion and $2.1 billion at December 31, 2019 and 2018, respectively, and are reflected in other current assets with a corresponding liability in policyholders’ funds.

Policyholders’ funds liabilities that are expected to be paid within twelve months from the balance sheet date are classified as current on the consolidated balance sheets. Policyholders’ funds liabilities that are expected to be paid greater than twelve months from the balance sheet date are included in other long-term liabilities on the consolidated balance sheets.

Self-Insurance Liabilities

The Company is self-insured for certain losses related to general liability, workers’ compensation and auto liability. The Company obtains third party insurance coverage to limit exposure from these claims. The Company is also self-insured for certain losses related to health and medical liabilities. The Company’s self-insurance accruals, which include reported claims and claims incurred but not reported, are calculated using standard insurance industry actuarial assumptions and the Company’s historical claims experience.

Foreign Currency Translation and Transactions and Translations

Foreign Currency Translation and Transactions

For non-U.S. dollar functional currency locations, (i) assets and liabilities are translated at end-of-period exchange rates, (ii) revenues and expenses are translated at average exchange rates in effect during the period and (iii) equity is translated at historical exchange rates. The resulting cumulative translation adjustments are included as a component of accumulated other comprehensive income (loss).

For U.S. dollar functional currency locations, foreign currency assets and liabilities are remeasured into U.S. dollars at end-of-period exchange rates, except for nonmonetary balance sheet accounts which are remeasured at historical exchange rates. Revenues and expenses are remeasured at average exchange rates in effect during each period, except for those expenses related to the nonmonetary balance sheet amounts which are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in net income (loss).

Revenue Recognition

Pharmacy Services Segment

The Pharmacy Services segment sells prescription drugs directly through its mail service dispensing pharmacies and indirectly through the Company’s retail pharmacy network. The Company’s pharmacy benefit arrangements are accounted for in a manner consistent with a master supply arrangement as there are no contractual minimum volumes and each prescription is considered a separate purchasing decision and distinct performance obligation transferred at a point in time. PBM services performed in connection with each prescription claim are considered part of a single performance obligation which culminates in the dispensing of prescription drugs.

The Company recognizes revenue using the gross method at the contract price negotiated with its clients when the Company has concluded it controls the prescription drug before it is transferred to the client plan members. The Company controls prescriptions dispensed indirectly through its retail pharmacy network because it has separate contractual arrangements with those pharmacies, has discretion in setting the price for the transaction and assumes primary responsibility for fulfilling the promise to provide prescription drugs to its client plan members while also performing the related PBM services.

Revenues include (i) the portion of the price the client pays directly to the Company, net of any discounts earned on brand name drugs or other discounts and refunds paid back to the client (see “Drug Discounts” and “Guarantees” below), (ii) the price paid to the Company by client plan members for mail order prescriptions and the price paid to retail network pharmacies by client plan members for retail prescriptions (“retail co-payments”), and (iii) claims based administrative fees for retail pharmacy network contracts. Sales taxes are not included in revenues.

The Company recognizes revenue when control of the prescription drugs is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those prescription drugs. The Company has established the following revenue recognition policies for the Pharmacy Services segment:


•	Revenues generated from prescription drugs sold by mail service dispensing pharmacies are recognized when the prescription drug is delivered to the client plan member. At the time of delivery, the Company has performed substantially all of its performance obligations under its client contracts and does not experience a significant level of returns or reshipments.

•

Revenues generated from prescription drugs sold by third party pharmacies in the Company’s retail pharmacy network and associated administrative fees are recognized at the Company’s point-of-sale, which is when the claim is adjudicated by the Company’s online claims processing system and the Company has transferred control of the prescription drug and performed all of its performance obligations.

For contracts under which the Company acts as an agent or does not control the prescription drugs prior to transfer to the client plan member, revenue is recognized using the net method.

Drug Discounts

The Company records revenue net of manufacturers’ rebates earned by its clients based on their plan members’ utilization of brand-name formulary drugs. The Company estimates these rebates at period-end based on actual and estimated claims data and its estimates of the manufacturers’ rebates earned by its clients. The estimates are based on the best available data at period-end and recent history for the various factors that can affect the amount of rebates due to the client. The Company adjusts its rebates payable to clients to the actual amounts paid when these rebates are paid or as significant events occur. Any cumulative effect of these adjustments is recorded against revenues at the time it is identified. Adjustments generally result from contract changes with clients or manufacturers that have retroactive rebate adjustments, differences between the estimated and actual product mix subject to rebates, or whether the brand name drug was included in the applicable formulary. The effect of adjustments

between estimated and actual manufacturers’ rebate amounts has not been material to the Company’s operating results or financial condition.

Guarantees

The Company also adjusts revenues for refunds owed to clients resulting from pricing guarantees and performance against defined service and performance metrics. The inputs to these estimates are not subject to a high degree of subjectivity or volatility. The effect of adjustments between estimated and actual pricing and performance refund amounts has not been material to the Company’s operating results or financial condition.

Retail/LTC Segment

Retail Pharmacy

The Company’s retail drugstores recognize revenue at the time the customer takes possession of the merchandise. For pharmacy sales, each prescription claim is its own arrangement with the customer and is a performance obligation, separate and distinct from other prescription claims under other retail network arrangements. Revenues are adjusted for refunds owed to third party payers resulting from pricing guarantees and performance against defined value-based service and performance metrics. The inputs to these estimates are not subject to a high degree of subjectivity or volatility. The effect of adjustments between estimated and actual pricing and performance refund amounts has not been material to the Company’s operating results or financial condition.

Revenue from Company gift cards purchased by customers is deferred as a contract liability until goods or services are transferred. Any amounts not expected to be redeemed by customers (i.e., breakage) are recognized based on historical redemption patterns.

Customer returns are not material to the Company’s operating results or financial condition. Sales taxes are not included in revenues.

Loyalty and Other Programs

The Company’s customer loyalty program, ExtraCare^®, consists of two components, ExtraSavings^TM and ExtraBucks^® Rewards. ExtraSavings are coupons that are recorded as a reduction of revenue when redeemed as the Company concluded that they do not represent a promise to the customer to deliver additional goods or services at the time of issuance because they are not tied to a specific transaction or spending level.

ExtraBucks Rewards are accumulated by customers based on their historical spending levels. Thus, the Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The Company allocates the transaction price to the initial transaction and the ExtraBucks Rewards transaction based upon the relative standalone selling price, which considers historical redemption patterns for the rewards. Revenue allocated to ExtraBucks Rewards is recognized as those rewards are redeemed. At the end of each period, unredeemed ExtraBucks Rewards are reflected as a contract liability.

The Company also offers a subscription-based membership program, CarePass^®, under which members are entitled to a suite of benefits delivered over the course of the subscription period, as well as a promotional reward that can be redeemed for future goods and services. Subscriptions are paid for on a monthly or annual basis at the time of or in advance of the Company delivering the goods and services. Revenue from these arrangements is recognized as the performance obligations are satisfied.

Long-term Care

Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. Each prescription claim represents a separate performance obligation of the Company, separate and distinct from other prescription claims under customer arrangements. A significant portion of Long-term Care revenue from sales of pharmaceutical and medical products is reimbursed by the federal Medicare Part D program and, to a lesser extent, state Medicaid programs. The Company monitors its revenues and receivables from these reimbursement sources, as well as long-term care facilities and other third party insurance payors, and reduces revenue at the revenue recognition date to properly account for the variable consideration due to anticipated differences between billed and reimbursed amounts. Accordingly, the total revenues and receivables reported in the Company’s consolidated financial statements are recorded at the amount expected to be ultimately received from these payors.

Patient co-payments associated with Medicare Part D, certain state Medicaid programs, Medicare Part B and certain third party payors typically are not collected at the time products are delivered or services are rendered, but are billed to the individuals as part of normal billing procedures and subject to normal accounts receivable collections procedures.

Walk-In Medical Clinics

For services provided by the Company’s walk-in medical clinics, revenue recognition occurs for completed services provided to patients, with adjustments taken for third party payor contractual obligations and patient direct bill historical collection rates.

Health Care Benefits Segment

Health Care Benefits revenue is principally derived from insurance premiums and fees billed to customers. Revenue is recognized based on customer billings, which reflect contracted rates per employee and the number of covered employees recorded in the Company’s records at the time the billings are prepared. Billings are generally sent monthly for coverage during the following month.

The Company’s billings may be subsequently adjusted to reflect enrollment changes due to member terminations or other factors. These adjustments are known as retroactivity adjustments. In each period, the Company estimates the amount of future retroactivity and adjusts the recorded revenue accordingly. As information regarding actual retroactivity amounts becomes known, the Company refines its estimates and records any required adjustments to revenues in the period in which they arise.

Premium Revenue

Premiums are recognized as revenue in the month in which the enrollee is entitled to receive health care services. Premiums are reported net of an allowance for estimated terminations and uncollectible amounts. Additionally, premium revenue subject to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010’s (as amended, collectively, the “ACA’s”) minimum medical loss ratio (“MLR”) rebate requirements is recorded net of the estimated minimum MLR rebates for the current calendar year. Premiums related to unexpired contractual coverage periods (unearned premiums) are reported as other insurance liabilities on the consolidated balance sheets and recognized as revenue when earned.

Some of the Company’s contracts allow for premiums to be adjusted to reflect actual experience or the relative health status of Insured members. Such adjustments are reasonably estimable at the outset of the contract, and adjustments to those estimates are made based on actual experience of the customer emerging under the contract and the terms of the underlying contract.

Services Revenue

Services revenue relates to contracts that can include various combinations of services or series of services which generally are capable of being distinct and accounted for as separate performance obligations. The Health Care Benefits segment’s services revenue primarily consists of the following components:

•

ASC fees are received in exchange for performing certain claim processing and member services for ASC members. ASC fee revenue is recognized over the period the service is provided. Some of the Company’s administrative services contracts include guarantees with respect to certain functions, such as customer service response time, claim processing accuracy and claim processing turnaround time, as well as certain guarantees that a plan sponsor’s benefit claim experience will fall within a certain range. With any of these guarantees, the Company is financially at risk if the conditions of the arrangements are not met, although the maximum amount at risk typically is limited to a percentage of the fees otherwise payable to the Company by the customer involved. Each period the Company estimates its obligations under the terms of these guarantees and records its estimate as an offset to services revenues.


•	Workers’ compensation administrative services consist of fee-based managed care services. Workers’ compensation administrative services revenue is recognized once the service is provided.

Accounting for Medicare Part D

Revenues include insurance premiums earned by the Company’s PDPs, which are determined based on the PDP’s annual bid and related contractual arrangements with the U.S. Centers for Medicare & Medicaid Services (“CMS”). The insurance premiums include a beneficiary premium, which is the responsibility of the PDP member, and can be subsidized by CMS in the case of low-income members, and a direct premium paid by CMS. Premiums collected in advance are initially recorded within other insurance liabilities and are then recognized ratably as revenue over the period in which members are entitled to receive benefits.

Revenues also include a risk-sharing feature of the Medicare Part D program design referred to as the risk corridor. The Company estimates variable consideration in the form of amounts payable to, or receivable from, CMS under the risk corridor, and adjusts revenue based on calculations of additional subsidies to be received from or owed to CMS at the end of the reporting year.

In addition to Medicare Part D premiums, the Company receives additional payments each month from CMS related to catastrophic reinsurance, low-income cost sharing subsidies and coverage gap benefits. If the subsidies received differ from the

amounts earned from actual prescriptions transferred, the difference is recorded in either accounts receivable, net or accrued expenses.

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source in each segment for the years ended December 31, 2019 and 2018:



In millions	Pharmacy Services		Retail/ LTC		Health Care Benefits		Corporate/ Other		Intersegment Eliminations			Consolidated Totals
2019
Major goods/services lines:
Pharmacy	$	140,896	$	66,442	$	—	$	—	$	(41,439	)	$	165,899
Front Store	—		19,422		—		—		—			19,422
Premiums	—		—		63,031		91		—			63,122
Net investment income	—		—		599		412		—			1,011
Other	595		744		5,974		9		—			7,322
Total	$	141,491	$	86,608	$	69,604	$	512	$	(41,439	)	$	256,776

Pharmacy Services distribution channel:
Pharmacy network⁽¹⁾	$	88,755
Mail choice ⁽²⁾	52,141
Other	595
Total	$	141,491

2018
Major goods/services lines:
Pharmacy	$	134,216	$	64,179	$	164	$	—	$	(33,714	)	$	164,845
Front Store	—		19,055		—		—		—			19,055
Premiums	—		—		8,180		4		—			8,184
Net investment income	—		—		58		602		—			660
Other	520		755		560		—		—			1,835
Total	$	134,736	$	83,989	$	8,962	$	606	$	(33,714	)	$	194,579

Pharmacy Services distribution channel:
Pharmacy network^{(1) (3)}	$	87,167
Mail choice ^{(2) (3)}	47,049
Other	520
Total	$	134,736

^{_____________________________________________}

(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 Choiceprogram.


(3)	Certain prior year amounts have been reclassified for consistency with the current period presentation.

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 ExtraBucksRewards 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 as of December 31, 2019 and 2018:



In millions	2019		2018
Trade receivables (included in accounts receivable, net)	$	6,717	$	6,497
Contract liabilities (included in accrued expenses)	73		67

During the year ended December 31, 2019, 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:



In millions	2019			2018
Balance at December 31, 2018	$	67		$	53
Adoption of ASU 2014-09	—			17
Rewards earnings and gift card issuances	365			332
Redemption and breakage	(359		)	(335		)
Balance at December 31, 2019	$	73		$	67

Cost of Products Sold

The Company accounts for cost of products sold as follows:

Pharmacy Services Segment

Cost of products sold includes: (i) the cost of prescription drugs sold during the reporting period directly through the Company’s mail service dispensing pharmacies and indirectly through the Company’s retail pharmacy network, (ii) shipping and handling costs, and (iii) the operating costs of the Company’s mail service dispensing pharmacies and client service operations and related information technology support costs including depreciation and amortization. The cost of prescription drugs sold component of cost of products sold includes: (i) the cost of the prescription drugs purchased from manufacturers or distributors and shipped to members in clients’ benefit plans from the Company’s mail service dispensing pharmacies, net of any volume-related or other discounts (see “Vendor Allowances and Purchase Discounts” below) and (ii) the cost of prescription drugs sold (including retail co-payments) through the Company’s retail pharmacy network under contracts where the Company is the principal, net of any volume-related or other discounts.

Retail/LTC Segment

Cost of products sold includes: the cost of merchandise sold during the reporting period, including prescription drug costs, and the related purchasing costs, warehousing and delivery costs (including depreciation and amortization) and actual and estimated inventory losses.

Vendor Allowances and Purchase Discounts

The Company accounts for vendor allowances and purchase discounts as follows:

Pharmacy Services Segment

The Pharmacy Services segment receives purchase discounts on products purchased. Contractual arrangements with vendors, including manufacturers, wholesalers and retail pharmacies, normally provide for the Pharmacy Services segment to receive purchase discounts from established list prices in one, or a combination, of the following forms: (i) a direct discount at the time of purchase, (ii) a discount for the prompt payment of invoices or (iii) when products are purchased indirectly from a manufacturer (e.g., through a wholesaler or retail pharmacy), a discount (or rebate) paid subsequent to dispensing. These rebates are recognized when prescriptions are dispensed and are generally calculated and billed to manufacturers within 30 days of the end of each completed quarter. Historically, the effect of adjustments resulting from the reconciliation of rebates recognized to the amounts billed and collected has not been material to the Company’s operating results or financial condition. The Company accounts for the effect of any such differences as a change in accounting estimate in the period the reconciliation is completed. The Pharmacy Services segment also receives additional discounts under its wholesaler contracts if it exceeds contractually defined purchase volumes. In addition, the Pharmacy Services segment receives fees from pharmaceutical

manufacturers for administrative services. Purchase discounts and administrative service fees are recorded as a reduction of cost of products sold.

Retail/LTC Segment

Vendor allowances received by the Retail/LTC segment reduce the carrying cost of inventory and are recognized in cost of products sold when the related inventory is sold, unless they are specifically identified as a reimbursement of incremental costs for promotional programs and/or other services provided. Amounts that are directly linked to advertising commitments are recognized as a reduction of advertising expense (included in operating expenses) when the related advertising commitment is satisfied. Any such allowances received in excess of the actual cost incurred also reduce the carrying cost of inventory. The total value of any upfront payments received from vendors that are linked to purchase commitments is initially deferred. The deferred amounts are then amortized to reduce cost of products sold over the life of the contract based upon purchase volume. The total value of any upfront payments received from vendors that are not linked to purchase commitments is also initially deferred. The deferred amounts are then amortized to reduce cost of products sold on a straight-line basis over the life of the related contract. The total amortization of these upfront payments was not material to the Company’s consolidated financial statements in any of the periods presented.

Health Care Reform

Health Insurer Fee

Since January 1, 2014, the ACA imposes an annual premium-based health insurer fee (“HIF”) for each calendar year payable in September which is not deductible for tax purposes. The Company is required to estimate a liability for the HIF at the beginning of the calendar year in which the fee is payable with a corresponding deferred asset that is amortized ratably to operating expenses over the calendar year. The Company records the liability for the HIF in accrued expenses and records the deferred asset in other current assets. There was no expense related to the HIF in 2019 and 2017, since the HIF was temporarily suspended for each of those periods. In 2018, operating expenses included $157 million related to the Company’s share of the HIF. The HIF applies for 2020, and in December 2019, the HIF was repealed for calendar years after 2020.

Risk Adjustment

The ACA established a permanent risk adjustment program to transfer funds from qualified individual and small group insurance plans with below average risk scores to plans with above average risk scores. Based on the risk of the Company’s qualified plan members relative to the average risk of members of other qualified plans in comparable markets, as defined by the ACA, the Company estimates its ultimate risk adjustment receivable (recorded in accounts receivable) or payable (recorded in accrued expenses) for the current calendar year and reflects the pro-rata year-to-date impact as an adjustment to premium revenue.

Advertising Costs

Advertising costs, which are reduced by the portion funded by vendors, are expensed when the related advertising takes place. Net advertising costs, which are included in operating expenses, were $396 million, $364 million and $230 million in 2019, 2018 and 2017, respectively.

Share-Based Compensation

Stock-Based Compensation

Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as an expense over the applicable requisite service period of the stock award (generally 3 to 5 years) using the straight-line method.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year or years in which the differences are expected to reverse. The effect of a change in the tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date of such change.

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017. Among numerous changes to existing tax laws, the TCJA permanently reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effects of changes in tax rates on deferred tax balances are required to be taken into consideration in the period in which the changes are

enacted, regardless of when they are effective. As a result of the reduction of the corporate income tax rate under the TCJA, the Company estimated the revaluation of its net deferred tax liabilities and recorded a provisional income tax benefit of approximately $1.5 billion for year ended December 31, 2017. In 2018, the Company completed its process of determining the TCJA’s final impact and recorded an additional income tax benefit of $100 million.

The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the Company’s recent operating results. The Company establishes a valuation allowance when it does not consider it more likely than not that a deferred tax asset will be recovered.

The Company records uncertain tax positions on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Interest and/or penalties related to uncertain tax positions are recognized in the income tax provision.

Measurement of Defined Benefit Pension and Other Postretirement Employee Benefit (OPEB) Plans

Measurement of Defined Benefit Pension and Other Postretirement Employee Benefit Plans

The Company sponsors defined benefit pension plans (“pension plans”) and other postretirement employee benefit plans (“OPEB plans”) for its employees and retirees. The Company recognizes the funded status of its pension and OPEB plans on the consolidated balance sheets based on the year-end measurements of plan assets and benefit obligations. When the fair value of plan assets are in excess of the plan benefit obligations, the amounts are reported in other current assets and other assets. When the fair value of plan benefit obligations are in excess of plan assets, the amounts are reported in accrued expenses and other long-term liabilities based on the amount by which the actuarial present value of benefits payable in the next twelve months included in the benefit obligation exceeds the fair value of plan assets. The net periodic benefit costs for the Company’s pension and OPEB plans do not contain a service cost component as these plans have been frozen for an extended period of time. Non-service cost components of pension and postretirement benefit cost are included in other expense (income) in the consolidated statements of operations.

Earnings (Loss) per Common Share

Earnings (loss) per share is computed using the two-class method. The Company calculates basic earnings (loss) per share based on the weighted average number of common shares outstanding for the period. See Note 14 ‘‘Earnings (Loss) Per Share’’ for additional information.

Shares Held in Trust

The Company maintains grantor trusts, which held approximately one million shares of its common stock at both December 31, 2019 and 2018. These shares are designated for use under various employee compensation plans. Since the Company holds these shares, they are excluded from the computation of basic and diluted shares outstanding.

Variable Interest Entities

The Company has investments in (i) a generic pharmaceutical sourcing entity, (ii) certain hedge fund and private equity investments and (iii) certain real estate partnerships that are considered VIE’s. The Company does not have a future obligation to fund losses or debts on behalf of these investments; however, it may voluntarily contribute funds. In evaluating whether the Company is the primary beneficiary of a VIE, the Company considers several factors, including whether the Company has (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses and the right to receive benefits that could potentially be significant to the VIE.

Variable Interest Entities - Primary Beneficiary

In 2014, the Company and Cardinal Health, Inc. (“Cardinal”) established Red Oak Sourcing, LLC (“Red Oak”), a generic pharmaceutical sourcing entity in which the Company and Cardinal each own 50%. The Red Oak arrangement has an initial term of 10 years. Under this arrangement, the Company and Cardinal contributed their sourcing and supply chain expertise to Red Oak and agreed to source and negotiate generic pharmaceutical supply contracts for both companies through Red Oak; however, Red Oak does not own or hold inventory on behalf of either company. No physical assets (e.g., property and

equipment) were contributed to Red Oak by either company, and minimal funding was provided to capitalize Red Oak. The Company has determined that it is the primary beneficiary of this VIE because it has the ability to direct the activities of Red Oak. Consequently, the Company consolidates Red Oak in its consolidated financial statements within the Retail/LTC segment.

Cardinal is required to pay the Company 39 quarterly payments beginning in October 2014. As milestones are met, the quarterly payments increase. The Company received from Cardinal $183 million during each of the years ended December 31, 2019, 2018 and 2017. The payments reduce the Company’s carrying value of inventory and are recognized in cost of products sold when the related inventory is sold. Revenues associated with Red Oak expenses reimbursed by Cardinal for the years ended December 31, 2019, 2018 and 2017, and amounts due to or due from Cardinal at December 31, 2019 and 2018 were immaterial.

Variable Interest Entities - Other Variable Interest Holder

The Company has invested in certain VIEs for which it has determined that it is not the primary beneficiary, consisting of the following:


•	Hedge fund and private equity investments - The Company invests in hedge fund and private equity investments in order to generate investment returns for its investment portfolio supporting its insurance businesses.


•	Real estate partnerships - The Company invests in various real estate partnerships, including those that construct, own and manage low-income housing developments. For the low income housing development investments, substantially all of the projected benefits to the Company are from tax credits and other tax benefits.

The Company is not the primary beneficiary of these VIEs because the nature of the Company’s involvement with the activities of these VIEs does not give the Company the power to direct the activities that most significantly impact their economic performance. The Company records the amount of its investment in these VIEs as long-term investments on the consolidated balance sheets and recognizes its share of each VIE’s income or losses in net income (loss). The Company’s maximum exposure to loss from these VIEs is limited to its investment balances as disclosed below and the risk of recapture of previously recognized tax credits related to the real estate partnerships, which the Company does not consider significant.

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 $32 million, $45 million and $35 million in the years ended December 31, 2019, 2018 and 2017, 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 (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $96 million, $135 million and $139 million for pharmaceutical inventory purchases during the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, the Company performs certain collection functions for Heartland and then passes those customer cash collections back to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

During the year ended December 31, 2019, the Company made a charitable contribution of $30 million to the CVS Health Foundation, a non-profit entity that focuses on health, education and community involvement programs. The charitable contribution will fund future charitable giving and was recorded as an operating expense in the consolidated statement of operations for the year ended December 31, 2019.

Discontinued Operations

In connection with certain business dispositions completed between 1995 and 1997, the Company retained guarantees on store lease obligations for a number of former subsidiaries, including Linens ‘n Things and Bob’s Stores, each of which subsequently filed for bankruptcy. The Company’s loss from discontinued operations primarily includes lease-related costs that the Company believes it will likely be required to satisfy pursuant to its Linens ‘n Things and Bob’s Stores lease guarantees.

New Accounting Pronouncements Recently Adopted and Not Yet Adopted

New Accounting Pronouncements Recently Adopted

Leases

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-02, Leases (Topic 842). Under this accounting standard, lessees are required to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability is equal to the present value of lease payments. The asset is based on the liability, subject to certain adjustments, such as for initial direct costs. For income statement purposes, a dual model was retained, requiring leases to be classified as either operating or finance leases. Operating leases result in straight-line expense (similar to operating leases under the prior accounting standard), while finance leases result in a front-loaded expense pattern (similar to capital leases under the prior accounting standard). Lessor accounting is similar to the prior model, but updated to align with certain changes to the lessee model (e.g., certain definitions, such as initial direct costs, have been updated) and the new revenue recognition standard that was adopted in 2018.

The Company adopted this new accounting standard on January 1, 2019 on a modified retrospective basis and applied the new standard to all leases through a cumulative-effect adjustment to beginning retained earnings. As a result, comparative financial information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which includes, among other things, the ability to carry forward the existing lease classification. On January 1, 2019, the Company recorded an after-tax transition adjustment to increase retained earnings by approximately $178 million ($241 million prior to tax effect). The new standard had a material impact on the Company’s consolidated balance sheet, but did not materially impact the Company’s consolidated operating results and had no impact on the Company’s cash flows.

Impact of New Lease Standard on Balance Sheet Line Items

As a result of applying the new lease accounting standard using a modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of January 1, 2019:



	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2018		Adjustments			As Adjusted January 1, 2019
Consolidated Balance Sheets:
Other current assets	$	4,581	$	(48	)	$	4,533
Total current assets	45,243		(48		)	45,195
Property and equipment, net	11,349		11			11,360
Operating lease right-of-use assets	—		20,987			20,987
Intangible assets, net	36,524		(217		)	36,307
Other assets	5,046		(521		)	4,525
Total assets	196,456		20,212			216,668
Accrued expenses	10,711		(52		)	10,659
Current portion of operating lease liabilities	—		1,803			1,803
Current portion of long-term debt	1,265		2			1,267
Total current liabilities	44,009		1,753			45,762
Long-term operating lease liabilities	—		18,832			18,832
Long-term debt	71,444		(96		)	71,348
Deferred income taxes	7,677		63			7,740
Other long-term liabilities	2,780		(518		)	2,262
Total liabilities	137,913		20,034			157,947
Retained earnings	40,911		178			41,089
Total CVS Health shareholders’ equity	58,225		178			58,403
Total shareholders’ equity	58,543		178			58,721

Accounting for Interest Associated with the Purchase of Callable Debt Securities

In March 2017, the FASB issued ASU 2017-08, Accounting for Interest Associated with the Purchase of Callable Debt Securities (Topic 310). Under this standard, premiums on callable debt securities are amortized to the earliest call date rather than to the contractual maturity date. Callable debt securities held at a discount will continue to be amortized to the contractual maturity date. The Company adopted this new accounting standard on January 1, 2019 on a modified retrospective basis and recorded an immaterial cumulative effect adjustment from accumulated other comprehensive income to retained earnings on the consolidated balance sheet.

New Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). This standard requires the use of a forward-looking expected credit loss impairment model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded through an allowance account and revises certain disclosure requirements. The Company adopted this new accounting standard on January 1, 2020. The Company adopted the credit loss impairment model on a modified retrospective basis and recorded an immaterial cumulative effect adjustment to retained earnings as of the adoption date. The Company adopted the available-for-sale debt security impairment model on a prospective basis. The adoption of this standard did not have a material impact on the Company’s consolidated operating results, cash flows or financial condition.

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and other - Internal-Use Software (Topic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This standard requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Topic 350-40 to determine which implementation costs to capitalize as assets. The Company adopted this new

accounting guidance on January 1, 2020 on a prospective basis. The implementation of this standard is not expected to have a material impact on the Company’s consolidated operating results, cash flows, financial condition or related disclosures.

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the FASB issued ASU 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 (loss). 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, 2021. The Company is currently evaluating the effect that implementation of this standard will have on the Company’s consolidated operating results, cash flows, financial condition and related disclosures.

Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the effect that implementation of this standard will have on the Company’s consolidated operating results, cash flows, financial condition and related disclosures.

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Schedule of reconciliation of cash and cash equivalents

The following is a reconciliation of cash and cash equivalents on the consolidated balance sheets to total cash, cash equivalents and restricted cash on the consolidated statements of cash flows as of December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Cash and cash equivalents	$	5,683	$	4,059	$	1,696
Restricted cash (included in other current assets)	—		6		14
Restricted cash (included in other assets)	271		230		190
Total cash, cash equivalents and restricted cash at the end of the period in the consolidated statements of cash flows	$	5,954	$	4,295	$	1,900

Schedule of accounts receivable, net

Accounts receivable, net is composed of the following at December 31, 2019 and 2018:



In millions	2019		2018
Trade receivables	$	6,717	$	6,497
Vendor and manufacturer receivables	7,856		7,315
Premium receivables	2,663		2,259
Other receivables	2,381		1,560
Total accounts receivable, net	$	19,617	$	17,631

Schedule of allowance for doubtful accounts

The activity in the allowance for doubtful accounts receivable for the years ended December 31, 2019, 2018 and 2017 is as follows:



In millions	2019			2018			2017
Beginning balance	$	287		$	162		$	158
Additions charged to bad debt expense	111			162			139
Write-offs charged to allowance	(79		)	(37		)	(135		)
Ending balance	$	319		$	287		$	162

Schedule of property and equipment

Property and equipment consists of the following at December 31, 2019 and 2018:



In millions	2019			2018
Land	$	1,981		$	1,872
Building and improvements	4,068			3,785
Fixtures and equipment	13,807			13,028
Leasehold improvements	5,611			5,384
Software	3,467			2,800
Total property and equipment	28,934			26,869
Accumulated depreciation and amortization	(16,890		)	(15,520		)
Property and equipment, net	$	12,044		$	11,349

Schedule of disaggregation of revenue

The following table disaggregates the Company’s revenue by major source in each segment for the years ended December 31, 2019 and 2018:



In millions	Pharmacy Services		Retail/ LTC		Health Care Benefits		Corporate/ Other		Intersegment Eliminations			Consolidated Totals
2019
Major goods/services lines:
Pharmacy	$	140,896	$	66,442	$	—	$	—	$	(41,439	)	$	165,899
Front Store	—		19,422		—		—		—			19,422
Premiums	—		—		63,031		91		—			63,122
Net investment income	—		—		599		412		—			1,011
Other	595		744		5,974		9		—			7,322
Total	$	141,491	$	86,608	$	69,604	$	512	$	(41,439	)	$	256,776

Pharmacy Services distribution channel:
Pharmacy network⁽¹⁾	$	88,755
Mail choice ⁽²⁾	52,141
Other	595
Total	$	141,491

2018
Major goods/services lines:
Pharmacy	$	134,216	$	64,179	$	164	$	—	$	(33,714	)	$	164,845
Front Store	—		19,055		—		—		—			19,055
Premiums	—		—		8,180		4		—			8,184
Net investment income	—		—		58		602		—			660
Other	520		755		560		—		—			1,835
Total	$	134,736	$	83,989	$	8,962	$	606	$	(33,714	)	$	194,579

Pharmacy Services distribution channel:
Pharmacy network^{(1) (3)}	$	87,167
Mail choice ^{(2) (3)}	47,049
Other	520
Total	$	134,736

^{_____________________________________________}

(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 Choiceprogram.

(3)

Certain prior year amounts have been reclassified for consistency with the current period presentation.

Schedule of contract with customer assets and liabilities

The following table provides information about receivables and contract liabilities from contracts with customers as of December 31, 2019 and 2018:



In millions	2019		2018
Trade receivables (included in accounts receivable, net)	$	6,717	$	6,497
Contract liabilities (included in accrued expenses)	73		67

During the year ended December 31, 2019, 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:



In millions	2019			2018
Balance at December 31, 2018	$	67		$	53
Adoption of ASU 2014-09	—			17
Rewards earnings and gift card issuances	365			332
Redemption and breakage	(359		)	(335		)
Balance at December 31, 2019	$	73		$	67

Schedule of variable interest entities

The total amount of other variable interest holder VIE assets included in long-term investments on the consolidated balance sheets at December 31, 2019 and 2018 was as follows:



In millions	2019		2018
Hedge fund investments	$	271	$	270
Private equity investments	538		524
Real estate partnerships	212		275
Total	$	1,021	$	1,069

Schedule of discontinued operations

Below is a summary of the results of discontinued operations for the year ended December 31, 2017:



In millions	2017
Loss from discontinued operations	$	(13	)
Income tax benefit	5
Loss from discontinued operations, net of tax	$	(8	)

Schedule of new accounting pronouncements

As a result of applying the new lease accounting standard using a modified retrospective method, the following adjustments were made to accounts on the consolidated balance sheet as of January 1, 2019:



	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2018		Adjustments			As Adjusted January 1, 2019
Consolidated Balance Sheets:
Other current assets	$	4,581	$	(48	)	$	4,533
Total current assets	45,243		(48		)	45,195
Property and equipment, net	11,349		11			11,360
Operating lease right-of-use assets	—		20,987			20,987
Intangible assets, net	36,524		(217		)	36,307
Other assets	5,046		(521		)	4,525
Total assets	196,456		20,212			216,668
Accrued expenses	10,711		(52		)	10,659
Current portion of operating lease liabilities	—		1,803			1,803
Current portion of long-term debt	1,265		2			1,267
Total current liabilities	44,009		1,753			45,762
Long-term operating lease liabilities	—		18,832			18,832
Long-term debt	71,444		(96		)	71,348
Deferred income taxes	7,677		63			7,740
Other long-term liabilities	2,780		(518		)	2,262
Total liabilities	137,913		20,034			157,947
Retained earnings	40,911		178			41,089
Total CVS Health shareholders’ equity	58,225		178			58,403
Total shareholders’ equity	58,543		178			58,721

Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Schedule of fair value of assets acquired and liabilities assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:



In millions
Cash and cash equivalents	$	6,565
Accounts receivable	4,094
Other current assets	3,894
Investments (current and long-term)	17,984
Goodwill	47,755
Intangible assets	22,571
Other assets	8,249
Total assets acquired	111,112
Health care costs payable	5,302
Other current liabilities	9,940
Debt (current and long-term)	8,098
Deferred income taxes	4,608
Other long-term liabilities	13,078
Total liabilities assumed	41,026
Noncontrolling interests	320
Total consideration transferred	$	69,766

Schedule of pro forma financial information

The following unaudited pro forma information presents a summary of the Company’s combined operating results for the years ended December 31, 2018 and 2017 as if the Aetna acquisition and the related financing transactions had occurred on January 1, 2017. The following pro forma financial information is not necessarily indicative of the Company’s operating results as they

would have been had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including differences between the assumptions used to prepare the pro forma financial information, basic shares outstanding and dilutive equivalents, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.



	Year Ended December 31,
In millions, except per share data	2018		2017
Total revenues	$	243,232	$	236,000
Income from continuing operations	1,152		6,813
Basic earnings per share from continuing operations attributable to CVS Health	$	0.89	$	5.25
Diluted earnings per share from continuing operations attributable to CVS Health	$	0.88	$	5.21

Investments (Tables)

12 Months Ended

Dec. 31, 2019

Investments [Abstract]

Total investments

Total investments at December 31, 2019 and 2018 were as follows:



	2019						2018
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,251	$	14,671	$	16,922	$	2,359	$	12,896	$	15,255
Mortgage loans	122		1,091		1,213		145		1,216		1,361
Other investments	—		1,552		1,552		18		1,620		1,638
Total investments	$	2,373	$	17,314	$	19,687	$	2,522	$	15,732	$	18,254

Debt securities available for sale

Debt securities available for sale at December 31, 2019 and 2018 were as follows:



In millions	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2019
Debt securities:
U.S. government securities	$	1,791	$	62	$	(1	)	$	1,852
States, municipalities and political subdivisions	2,202		108		(1		)	2,309
U.S. corporate securities	7,167		573		(3		)	7,737
Foreign securities	2,149		200		(1		)	2,348
Residential mortgage-backed securities	508		25		—			533
Commercial mortgage-backed securities	654		46		—			700
Other asset-backed securities	1,397		13		(5		)	1,405
Redeemable preferred securities	30		8		—			38
Total debt securities ⁽¹⁾	$	15,898	$	1,035	$	(11	)	$	16,922

December 31, 2018
Debt securities:
U.S. government securities	$	1,662	$	26	$	—		$	1,688
States, municipalities and political subdivisions	2,370		30		(1		)	2,399
U.S. corporate securities	6,444		61		(16		)	6,489
Foreign securities	2,355		31		(3		)	2,383
Residential mortgage-backed securities	567		10		—			577
Commercial mortgage-backed securities	594		11		—			605
Other asset-backed securities	1,097		3		(15		)	1,085
Redeemable preferred securities	30		—		(1		)	29
Total debt securities ⁽¹⁾	$	15,119	$	172	$	(36	)	$	15,255

^{_____________________________________________}

(1)

Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At December 31, 2019, debt securities with a fair value of $965 million, gross unrealized capital gains of $83 million and no gross unrealized capital losses, and at December 31, 2018, debt securities with a fair value of $916 million, gross unrealized capital gains of $12 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.

Fair value of debt securities by contractual maturity

The amortized cost and fair value of debt securities at December 31, 2019 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	Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,028	$	1,034
One year through five years	5,507		5,702
After five years through ten years	3,081		3,296
Greater than ten years	3,723		4,252
Residential mortgage-backed securities	508		533
Commercial mortgage-backed securities	654		700
Other asset-backed securities	1,397		1,405
Total	$	15,898	$	16,922

Debt securities in an unrealized capital loss position

The maturity dates for debt securities in an unrealized capital loss position at December 31, 2019 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	$	—	$	—	$	12	$	—	$	12	$	—
One year through five years	3		—		285		1		288		1
After five years through ten years	9		—		151		2		160		2
Greater than ten years	11		—		197		3		208		3
Residential mortgage-backed securities	—		—		16		—		16		—
Commercial mortgage-backed securities	—		—		49		—		49		—
Other asset-backed securities	10		—		426		5		436		5
Total	$	33	$	—	$	1,136	$	11	$	1,169	$	11

Summarized below are the debt securities the Company held at December 31, 2019 and 2018 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
December 31, 2019
Debt securities:
U.S. government securities	52	$	168	$	1	—	$	—	$	—	52	$	168	$	1
States, municipalities and political subdivisions	66	115		1		2	5		—		68	120		1
U.S. corporate securities	181	305		2		2	—		1		183	305		3
Foreign securities	39	75		1		—	—		—		39	75		1
Residential mortgage-backed securities	30	16		—		9	—		—		39	16		—
Commercial mortgage-backed securities	16	49		—		—	—		—		16	49		—
Other asset-backed securities	138	254		1		187	182		4		325	436		5
Total debt securities	522	$	982	$	6	200	$	187	$	5	722	$	1,169	$	11

December 31, 2018
Debt securities:
U.S. government securities	8	$	26	$	—	—	$	—	$	—	8	$	26	$	—
States, municipalities and political subdivisions	54	86		1		—	—		—		54	86		1
U.S. corporate securities	1,399	1,431		16		—	—		—		1,399	1,431		16
Foreign securities	243	314		3		—	—		—		243	314		3
Residential mortgage-backed securities	45	1		—		—	—		—		45	1		—
Other asset-backed securities	516	528		15		—	—		—		516	528		15
Redeemable preferred securities	14	23		1		—	—		—		14	23		1
Total debt securities	2,279	$	2,409	$	36	—	$	—	$	—	2,279	$	2,409	$	36

Activity in mortgage loan portfolio

The Company’s mortgage loans are collateralized by commercial real estate. During 2019 and subsequent to the Aetna Acquisition Date in 2018, the Company had the following activity in its mortgage loan portfolio:



In millions	2019		2018
New mortgage loans	$	131	$	4
Mortgage loans fully-repaid	234		27
Mortgage loans foreclosed	—		—

At December 31, 2019 scheduled mortgage loan principal repayments were as follows:



In millions
2020	$	122
2021	235
2022	200
2023	81
2024	193
Thereafter	382
Total	$	1,213

Mortgage loan internal credit rating

Based upon the Company’s assessments at December 31, 2019 and 2018, the Company’s mortgage loans were given the following credit quality indicators:



In millions, except credit ratings indicator	2019		2018
1	$	58	$	42
2 to 4	1,143		1,301
5 and 6	12		18
7	—		—
Total	$	1,213	$	1,361

Net investment income

Sources of net investment income for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Debt securities	$	589		$	61
Mortgage loans	71			6
Other investments	194			593
Gross investment income	854			660
Investment expenses	(42		)	(3		)
Net investment income (excluding net realized capital gains or losses)	812			657
Net realized capital gains ⁽¹⁾	199			3
Net investment income ⁽²⁾	$	1,011		$	660

^{_____________________________________________}


(1)	Net realized capital gains are net of other-than-temporary impairment (“OTTI”) losses on debt securities recognized in the consolidated statements of operations of $24 million for the year ended December 31, 2019. There were no material OTTI losses on debt securities for the year ended December 31, 2018.

(2)

Net investment income includes $44 million and $4 million for 2019 and 2018, 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 in the year ended December 31, 2019 and subsequent to the Aetna Acquisition Date in 2018 were as follows:



In millions	2019			2018
Proceeds from sales	$	4,773		$	389
Gross realized capital gains	146			2
Gross realized capital losses	(17		)	(2		)

Fair Value (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair value of financial assets and liabilities

Financial assets measured at fair value on a recurring basis on the consolidated balance sheets at December 31, 2019 and 2018 were as follows:



In millions	Level 1		Level 2		Level 3		Total
December 31, 2019
Cash and cash equivalents	$	3,397	$	2,286	$	—	$	5,683
Debt securities:
U.S. government securities	1,785		67		—		1,852
States, municipalities and political subdivisions	—		2,309		—		2,309
U.S. corporate securities	—		7,700		37		7,737
Foreign securities	—		2,348		—		2,348
Residential mortgage-backed securities	—		533		—		533
Commercial mortgage-backed securities	—		700		—		700
Other asset-backed securities	—		1,405		—		1,405
Redeemable preferred securities	—		26		12		38
Total debt securities	1,785		15,088		49		16,922
Equity securities	34		—		39		73
Total	$	5,216	$	17,374	$	88	$	22,678

December 31, 2018
Cash and cash equivalents	$	2,619	$	1,440	$	—	$	4,059
Debt securities:
U.S. government securities	1,597		91		—		1,688
States, municipalities and political subdivisions	—		2,399		—		2,399
U.S. corporate securities	—		6,422		67		6,489
Foreign securities	—		2,380		3		2,383
Residential mortgage-backed securities	—		577		—		577
Commercial mortgage-backed securities	—		605		—		605
Other asset-backed securities	—		1,085		—		1,085
Redeemable preferred securities	—		22		7		29
Total debt securities	1,597		13,581		77		15,255
Equity securities	19		—		54		73
Total	$	4,235	$	15,021	$	131	$	19,387

Changes in level 3 financial assets

The changes in the balances of Level 3 financial assets during 2019 were as follows:



In millions	Foreign securities			U.S. corporate securities			Equity securities			Redeemable preferred securities		Total
Beginning balance	$	3		$	67		$	54		$	7	$	131
Net realized and unrealized capital gains (losses):
Included in earnings	—			(33		)	13			—		(20		)
Included in other comprehensive income	—			18			—			5		23
Purchases	2			3			13			—		18
Sales	—			(6		)	(41		)	—		(47		)
Settlements	(1		)	(12		)	—			—		(13		)
Transfers out of Level 3, net	(4		)	—			—			—		(4		)
Ending balance	$	—		$	37		$	39		$	12	$	88

The total gross transfers into (out of) Level 3 during the year ended December 31, 2019 were as follows:



In millions
Gross transfers into Level 3	$	—
Gross transfers out of Level 3	(4		)
Net transfers out of Level 3	$	(4	)

Carrying value and estimated fair value of certain financial instruments

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the consolidated balance sheets at adjusted cost or contract value at December 31, 2019 and 2018 were as follows:



	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
December 31, 2019
Assets:
Mortgage loans	$	1,213	$	—	$	—	$	1,239	$	1,239
Equity securities ⁽¹⁾	149		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	372		—		—		392		392
Long-term debt	68,480		74,306		—		—		74,306



	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
December 31, 2018
Assets:
Mortgage loans	$	1,361	$	—	$	—	$	1,366	$	1,366
Equity securities ⁽¹⁾	140		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	382		—		—		357		357
Long-term debt	72,709		71,252		—		—		71,252

^{_____________________________________________}


(1)	It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies. See Note 1 ‘‘Significant Accounting Policies’’ for additional information regarding the valuation of cost method investments.

Separate account financial assets

Separate Accounts financial assets at December 31, 2019 and 2018 were as follows:



	December 31, 2019								December 31, 2018
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	2	$	143	$	—	$	145	$	2	$	189	$	—	$	191
Debt securities	1,224		2,589		—		3,813		782		2,500		4		3,286
Equity securities	—		2		—		2		—		3		—		3
Common/collective trusts	—		499		—		499		—		404		—		404
Total	$	1,226	$	3,233	$	—	$	4,459	$	784	$	3,096	$	4	$	3,884

Goodwill and Other Intangibles (Tables)

12 Months Ended

Dec. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Change in goodwill

Below is a summary of the changes in the carrying amount of goodwill by segment for the years ended December 31, 2019 and 2018:



In millions	Pharmacy Services			Retail/ LTC			Health Care Benefits			Total
Balance at December 31, 2017	$	21,819		$	16,632		$	—		$	38,451
Acquisitions	1,569			735			44,484			46,788
Foreign currency translation adjustments	—			(14		)	—			(14		)
Divestiture of RxCrossroads subsidiary	—			(398		)	—			(398		)
Impairments	—			(6,149		)	—			(6,149		)
Balance at December 31, 2018	23,388			10,806			44,484			78,678
Segment realignment	194			—			(194		)	—
Purchase accounting adjustments	—			—			1,071			1,071
Other	(1		)	1			—			—
Balance at December 31, 2019	$	23,581		$	10,807		$	45,361		$	79,749

Other intangible assets

The following table is a summary of the Company’s intangible assets as of December 31, 2019 and 2018:



In millions, except weighted average life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Life (years)
2019
Trademarks (indefinite-lived)	$	10,498	$	—		$	10,498	N/A
Customer contracts/relationships and covenants not to compete	25,447		(8,128		)	17,319		14.8
Technology	1,060		(386		)	674		3.0
Provider networks	4,200		(229		)	3,971		20.0
Value of Business Acquired	590		(63		)	527		20.0
Other	364		(232		)	132		8.1
Total	$	42,159	$	(9,038	)	$	33,121	15.1

2018
Trademarks (indefinite-lived)	$	10,498	$	—		$	10,498	N/A
Customer contracts/relationships and covenants not to compete	26,213		(6,349		)	19,864		14.8
Technology	1,060		(31		)	1,029		3.0
Provider networks	4,200		(19		)	4,181		20.0
Value of Business Acquired	590		(7		)	583		20.0
Favorable leases and other ⁽¹⁾	1,177		(808		)	369		17.1
Total	$	43,738	$	(7,214	)	$	36,524	15.3

Estimated annual pretax amortization for other acquired intangible assets over the next five years

The projected annual amortization expense for the Company’s intangible assets for the next five years is as follows:



In millions
2020	$	2,283
2021	2,186
2022	1,816
2023	1,786
2024	1,743

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Lease costs and supplemental cash flow information

The following table is a summary of the components of net lease cost for the year ended December 31, 2019:



In millions	2019
Operating lease cost	$	2,720
Finance lease cost:
Amortization of right-of-use assets	38
Interest on lease liabilities	44
Total finance lease costs	82
Short-term lease costs	24
Variable lease costs	581
Less: sublease income	50
Net lease cost	$	3,357

Supplemental cash flow information related to leases for the year ended December 31, 2019 is as follows:



In millions	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$	2,701
Operating cash flows paid for interest portion of finance leases	44
Financing cash flows paid for principal portion of finance leases	26
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,824
Finance leases	283

Supplemental balance sheet information

Supplemental balance sheet information related to leases as of December 31, 2019 is as follows:



In millions, except remaining lease term and discount rate
Operating leases:
Operating lease right-of-use assets	$	20,860

Current portion of operating lease liabilities	$	1,596
Long-term operating lease liabilities	18,926
Total operating lease liabilities	$	20,522

Finance leases:⁽¹⁾
Property and equipment, gross	$	790
Accumulated depreciation ⁽²⁾	(38		)
Property and equipment, net	$	752

Current portion of long-term debt	$	27
Long-term debt	781
Total finance lease liabilities	$	808

Weighted average remaining lease term (in years)
Operating leases	13.8
Finance leases	20.5

Weighted average discount rate
Operating leases	4.6		%
Finance leases	6.7		%

^{_____________________________________________}


(1)	Finance lease right-of-use assets are included within property and equipment, net and the respective finance lease liabilities are included in current portion of long-term debt and long-term debt on the consolidated balance sheets.


(2)	In accordance with ASC 842, upon adoption the net carrying value of the prior capital leases became the initial basis of the Company’s finance leases. As a result, upon adoption there was no accumulated amortization associated with such finance leases.

Maturities of operating lease liabilities

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

^{_____________________________________________}


(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

The Company leases pharmacy and clinic space from Target Corporation. Amounts related to such finance and operating leases are reflected above. Pharmacy lease amounts due in excess of the remaining estimated economic life of the buildings of approximately $2.2 billion are not reflected in this table since the estimated economic life of the buildings is shorter than the contractual term of the pharmacy lease arrangement.

Maturities of financing lease liabilities

The following table summarizes the maturity of lease liabilities under finance and operating leases as of December 31, 2019:



In millions	Finance Leases			Operating Leases ⁽¹⁾			Total
2020	$	84		$	2,699		$	2,783
2021	82			2,598			2,680
2022	79			2,444			2,523
2023	77			2,335			2,412
2024	76			2,103			2,179
Thereafter	1,056			15,654			16,710
Total lease payments ⁽²⁾	1,454			27,833			29,287
Less: imputed interest	(646		)	(7,311		)	(7,957		)
Total lease liabilities	$	808		$	20,522		$	21,330

^{_____________________________________________}


(1)	Future operating lease payments have not been reduced by minimum sublease rentals of $315 million due in the future under noncancelable subleases.

(2)

The Company leases pharmacy and clinic space from Target Corporation. Amounts related to such finance and operating leases are reflected above. Pharmacy lease amounts due in excess of the remaining estimated economic life of the buildings of approximately $2.2 billion are not reflected in this table since the estimated economic life of the buildings is shorter than the contractual term of the pharmacy lease arrangement.

Schedule of net rental expense

The following table is a summary of the Company’s net rental expense for operating leases for the years ended December 31, 2018 and 2017:



In millions	2018			2017
Minimum rentals	$	2,528		$	2,455
Contingent rentals	28			29
Rental expense	2,556			2,484
Less: sublease income	(21		)	(24		)
Total rental expense, net	$	2,535		$	2,460

Schedule of capital leased assets

The amount of property and equipment under capital leases at December 31, 2018 was as follows:



In millions	2018
Property and equipment under capital leases	$	582
Accumulated amortization of property and equipment under capital leases	(163		)
Property and equipment under capital leases, net	$	419

Health Care Costs Payable (Tables)

12 Months Ended

Dec. 31, 2019

Insurance [Abstract]

Information about incurred and paid health care claims development

The information about incurred and paid health care claims development for the year ended December 31, 2018 is presented as required unaudited supplemental information.



In millions	Incurred Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	44,962	$	44,621
2019			51,426
	Total		$	96,047

In millions	Cumulative Paid Health Care Claims, Net of Reinsurance For the Years Ended December 31,
Date of Service	2018		2019
	(Unaudited)
2018	$	39,440	$	44,373
2019			44,987
	Total		$	89,360
All outstanding liabilities for health care costs payable prior to 2018, net of reinsurance			56
Total outstanding liabilities for health care costs payable, net of reinsurance			$	6,743

Schedule of liability for unpaid claims and claims adjustment expense

The reconciliation of the December 31, 2019 health care net incurred and paid claims development tables to the health care costs payable liability on the consolidated balance sheet is as follows:



In millions	December 31, 2019
Short-duration health care costs payable, net of reinsurance	$	6,743
Reinsurance recoverables	5
Premium deficiency reserve	4
Insurance lines other than short duration	127
Total health care costs payable	$	6,879

Components of change in health care costs payable

The following table shows the components of the change in health care costs payable during 2019 and 2018:



In millions	2019			2018
Health care costs payable, beginning of the period	$	6,147		$	5
Less: Reinsurance recoverables	4			—
Health care costs payable, beginning of the period, net	6,143			5
Acquisitions, net	—			5,357
Reclassification from pharmacy claims and discounts payable ⁽¹⁾	—			776
Add: Components of incurred health care costs
Current year	52,723			6,594
Prior years	(524		)	(42		)
Total incurred health care costs ⁽²⁾	52,199			6,552
Less: Claims paid
Current year	46,158			6,303
Prior years	5,314			260
Total claims paid	51,472			6,563
Add: Premium deficiency reserve	4			16
Health care costs payable, end of period, net	6,874			6,143
Add: Reinsurance recoverables	5			4
Health care costs payable, end of period	$	6,879		$	6,147

^{_____________________________________________}


(1)	As of the Aetna Acquisition Date, the Company reclassified $776 million of the Pharmacy Services segment’s unpaid retail pharmacy claims to third parties from pharmacy claims and discounts payable to health care costs payable as the third party liability was incurred to support the Health Care Benefits segment’s insured members.

(2)

Total incurred health care costs for the year ended December 31, 2019 and 2018 in the table above exclude (i) $4 million and $16 million, respectively, related to a premium deficiency reserve related to the Company’s Medicaid products, (ii) $41 million and $4 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the consolidated balance sheets and (iii) $285 million and $22 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the consolidated balance sheets.

Borrowings and Credit Arrangements (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Carrying value of long-term debt

The 2018 Notes consisted of the following at the time of issuance:



In millions
3.125% senior notes due March 2020	$	2,000
Floating rate notes due March 2020	1,000
3.35% senior notes due March 2021	3,000
Floating rate notes due March 2021	1,000
3.7% senior notes due March 2023	6,000
4.1% senior notes due March 2025	5,000
4.3% senior notes due March 2028	9,000
4.78% senior notes due March 2038	5,000
5.05% senior notes due March 2048	8,000
Total debt principal	$	40,000

The following table is a summary of the Company’s borrowings as of December 31, 2019 and 2018:



In millions	2019			2018
Short-term debt
Commercial paper	$	—		$	720

Long-term debt
2.2% senior notes due March 2019	—			375
2.25% senior notes due August 2019	—			850
3.125% senior notes due March 2020	723			2,000
Floating rate notes due March 2020 (2.515% and 3.397% at December 31, 2019 and 2018)	277			1,000
2.8% senior notes due July 2020	2,750			2,750
3.35% senior notes due March 2021	2,038			3,000
Floating rate notes due March 2021 (2.605% and 3.487% at December 31, 2019 and 2018)	1,000			1,000
4.125% senior notes due May 2021	222			550
2.125% senior notes due June 2021	1,750			1,750
4.125% senior notes due June 2021	203			500
5.45% senior notes due June 2021	187			600
3-year tranche term loan due November 2021	—			3,000
3.5% senior notes due July 2022	1,500			1,500
2.75% senior notes due November 2022	1,000			1,000
2.75% senior notes due December 2022	1,250			1,250
4.75% senior notes due December 2022	399			399
3.7% senior notes due March 2023	6,000			6,000
2.8% senior notes due June 2023	1,300			1,300
4% senior notes due December 2023	1,250			1,250
2.625% senior notes due August 2024	1,000			—
3.375% senior notes due August 2024	650			650
3.5% senior notes due November 2024	750			750
5% senior notes due December 2024	299			299
4.1% senior notes due March 2025	5,000			5,000
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			—
6.25% senior notes due June 2027	372			372
4.3% senior notes due March 2028	9,000			9,000
3.25% senior notes due August 2029	1,750			—
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
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
Finance lease liabilities	808			642
Other	279			19
Total debt principal	69,246			74,265
Debt premiums	262			302
Debt discounts and deferred financing costs	(1,028		)	(1,138		)
	68,480			73,429
Less:
Short-term debt (commercial paper)	—			(720		)
Current portion of long-term debt	(3,781		)	(1,265		)
Long-term debt	$	64,699		$	71,444

Schedule of maturities of long-term debt

The following is a summary of the Company’s required repayments of debt principal due during each of the next five years and thereafter, as of December 31, 2019:



In millions
2020	$	3,754
2021	5,404
2022	4,153
2023	8,554
2024	2,704
Thereafter	43,869
Total	68,438
Finance lease liabilities ⁽¹⁾	808
Total debt principal	$	69,246

^{_____________________________________________}

(1)

See Note 6 ‘‘Leases’’ for a summary of maturities of the Company’s finance lease liabilities.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

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+ Details

Pension Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Schedule of changes in benefit obligations

The following tables outline the change in pension benefit obligation and plan assets over the specified periods:



In millions	2019			2018
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,841		$	131
Acquired benefit obligations	—			5,685
Interest cost	225			25
Actuarial loss	530			41
Benefit payments	(357		)	(41		)
Benefit obligation, end of year	6,239			5,841

Change in plan assets:
Fair value of plan assets, beginning of year	5,663			—
Fair value of plan assets acquired	—			5,709
Actual return on plan assets	1,064			(17		)
Employer contributions	25			12
Benefit payments	(357		)	(41		)
Fair value of plan assets, end of year	6,395			5,663

Funded status	$	156		$	(178	)

Schedule of changes in plan assets

The following tables outline the change in pension benefit obligation and plan assets over the specified periods:



In millions	2019			2018
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,841		$	131
Acquired benefit obligations	—			5,685
Interest cost	225			25
Actuarial loss	530			41
Benefit payments	(357		)	(41		)
Benefit obligation, end of year	6,239			5,841

Change in plan assets:
Fair value of plan assets, beginning of year	5,663			—
Fair value of plan assets acquired	—			5,709
Actual return on plan assets	1,064			(17		)
Employer contributions	25			12
Benefit payments	(357		)	(41		)
Fair value of plan assets, end of year	6,395			5,663

Funded status	$	156		$	(178	)

Schedule of assets (liabilities) recognized in Balance Sheet

The assets (liabilities) recognized on the consolidated balance sheets at December 31, 2019 and 2018 for the pension plans consisted of the following:



In millions	2019			2018
Non-current assets reflected in other assets	$	494		$	147
Current liabilities reflected in accrued expenses	(25		)	(25		)
Non-current liabilities reflected in other long-term liabilities	(313		)	(300		)
Net assets (liabilities)	$	156		$	(178	)

Schedule of net periodic benefit cost

The components of net periodic benefit cost (income) for the years ended December 31, 2019, 2018 and 2017 are shown below:



In millions	2019			2018			2017
Components of net periodic benefit cost (income):
Interest cost	$	225		$	25		$	20
Expected return on plan assets	(357		)	(33		)	(20		)
Amortization of net actuarial loss	1			2			21
Settlement losses	—			—			187
Net periodic benefit cost (income)	$	(131	)	$	(6	)	$	208

Weighted average assumptions used in determining benefit obligations and net benefit costs

The Company determined its benefit obligation based on the following weighted average assumptions as of December 31, 2019 and 2018:



	2019		2018
Discount rate	3.2	%	4.3	%

The Company determined its net periodic benefit cost (income) based on the following weighted average assumptions for the years ended December 31, 2019, 2018 and 2017:



	2019		2018		2017
Discount rate	4.0	%	4.0	%	4.0	%
Expected long-term rate of return on plan assets	6.5	%	6.6	%	5.0	%

Schedule of changes in fair value of plan assets

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2019 were as follows:



In millions	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	92	$	65		$	—	$	157
Debt securities:
U.S. government securities	592		31			—		623
States, municipalities and political subdivisions	—		157			—		157
U.S. corporate securities	—		1,849			1		1,850
Foreign securities	—		178			—		178
Residential mortgage-backed securities	—		385			—		385
Commercial mortgage-backed securities	—		89			—		89
Other asset-backed securities	—		150			—		150
Redeemable preferred securities	—		5			—		5
Total debt securities	592		2,844			1		3,437
Equity securities:
U.S. domestic	931		1			—		932
International	481		—			—		481
Domestic real estate	25		—			—		25
Total equity securities	1,437		1			—		1,438
Other investments:
Real estate	—		—			353		353
Common/collective trusts ⁽¹⁾	—		288			—		288
Derivatives	—		(2		)	—		(2		)
Total other investments	—		286			353		639
Total pension investments ⁽²⁾	$	2,121	$	3,196		$	354	$	5,671

^{_____________________________________________}


(1)	The assets in the underlying funds of common/collective trusts consist of $137 million of equity securities and $151 million of debt securities.


(2)	Excludes $540 million of private equity limited partnership investments and $184 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2018 were as follows:



In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	68	$	30	$	—	$	98
Debt securities:
U.S. government securities	511		38		—		549
States, municipalities and political subdivisions	—		147		—		147
U.S. corporate securities	—		1,671		5		1,676
Foreign securities	—		177		—		177
Residential mortgage-backed securities	—		339		—		339
Commercial mortgage-backed securities	—		70		—		70
Other asset-backed securities	—		162		—		162
Redeemable preferred securities	—		6		—		6
Total debt securities	511		2,610		5		3,126
Equity securities:
U.S. domestic	744		—		—		744
International	356		—		—		356
Domestic real estate	30		—		—		30
Total equity securities	1,130		—		—		1,130
Other investments:
Real estate	—		—		425		425
Common/collective trusts ⁽¹⁾	—		253		—		253
Derivatives	—		2		—		2
Total other investments	—		255		425		680
Total pension investments ⁽²⁾	$	1,709	$	2,895	$	430	$	5,034

^{_____________________________________________}


(1)	The assets in the underlying funds of common/collective trusts consist of $109 million of equity securities and $144 million of debt securities.

(2)

Excludes $465 million of private equity limited partnership investments and $164 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

Schedule of change in level 3 plan assets

The changes in the balance of Level 3 pension plan assets during 2019 were as follows:



	2019
In millions	Real estate			U.S. corporate securities			Total
Beginning balance	$	425		$	5		$	430
Actual return on plan assets	5			—			5
Purchases, sales and settlements	(77		)	(5		)	(82		)
Transfers into (out of) Level 3	—			1			1
Ending balance	$	353		$	1		$	354

Schedule of expected future benefits payments

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the pension benefit obligation as of December 31, 2019:



In millions
2020	$	373
2021	415
2022	379
2023	384
2024	380
2025-2029	1,851

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the accumulated other postretirement benefit obligation as of December 31, 2019:



In millions
2020	$	15
2021	15
2022	15
2023	15
2024	15
2025-2029	72

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense (benefit)

The income tax provision (benefit) for continuing operations consisted of the following for the years ended December 31, 2019, 2018 and 2017:



In millions	2019			2018		2017
Current:
Federal	$	2,450		$	1,480	$	2,594
State	565			499		464
	3,015			1,979		3,058
Deferred:
Federal	(535		)	22		(1,435		)
State	(114		)	1		14
	(649		)	23		(1,421		)
Total	$	2,366		$	2,002	$	1,637

Schedule of effective income tax rate reconciliation

The following table is a reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continuing operations for the years ended December 31, 2019, 2018 and 2017:



	2019		2018		2017
Statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal tax benefit	4.0		27.7		4.1
Effect of the Tax Cuts and Jobs Act	—		(7.1	)	(18.3	)
Health insurer fee	—		2.2		—
Goodwill impairments	—		89.5		0.8
Sale of subsidiary	—		5.0		—
Other	1.3		4.1		(1.8	)
Effective income tax rate	26.3	%	142.4	%	19.8	%

Schedule of deferred tax assets and liabilities

The following table is a summary of the components of the Company’s deferred income tax assets and liabilities as of December 31, 2019 and 2018:



In millions	2019			2018
Deferred income tax assets:
Lease and rents	$	267		$	277
Inventory	23			28
Employee benefits	191			243
Bad debts and other allowances	294			243
Retirement benefits	47			130
Net operating loss and capital loss carryforwards	480			529
Deferred income	36			104
Insurance reserves	430			467
Investments	—			11
Other	451			242
Valuation allowance	(374		)	(520		)
Total deferred income tax assets	1,845			1,754
Deferred income tax liabilities:
Investments	(289		)	—
Depreciation and amortization	(8,850		)	(9,431		)
Total deferred income tax liabilities	(9,139		)	(9,431		)
Net deferred income tax liabilities	$	(7,294	)	$	(7,677	)

Schedule of unrecognized tax benefits roll forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2019, 2018 and 2017 is as follows:



In millions	2019			2018			2017
Beginning balance	$	661		$	344		$	307
Additions based on tax positions related to the current year	4			1			62
Additions based on tax positions related to prior years	115			324			32
Reductions for tax positions of prior years	(111		)	(5		)	(28		)
Expiration of statutes of limitation	(7		)	(2		)	(10		)
Settlements	(7		)	(1		)	(19		)
Ending balance	$	655		$	661		$	344

Stock Incentive Plans (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-based compensation

The following table is a summary of stock-based compensation for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Stock options and stock appreciation rights (“SARs”) ^{(1) (2)}	$	76	$	70	$	65
Restricted stock units and performance stock units ⁽²⁾	377		210		169
Total stock-based compensation	$	453	$	280	$	234

^{_____________________________________________}


(1)	Includes the ESPP.

(2)

Stock-based compensation for the year ended December 31, 2018 includes $14 million and $27 million associated with accelerated vesting of SARs and restricted stock replacement awards, respectively, issued to Aetna employees who were terminated subsequent to the Aetna Acquisition.

Schedule ESPP valuation assumptions

The following table is a summary of the assumptions used to value the ESPP awards for the years ended December 31, 2019, 2018 and 2017:



	2019			2018			2017
Dividend yield ⁽¹⁾	1.70		%	1.45		%	1.24		%
Expected volatility ⁽²⁾	27.96		%	28.02		%	22.70		%
Risk-free interest rate ⁽³⁾	2.27		%	1.87		%	0.86		%
Expected life (in years) ⁽⁴⁾	0.5			0.5			0.5
Weighted-average grant date fair value	$	10.51		$	12.26		$	13.01

^{_____________________________________________}


(1)	The dividend yield is calculated based on semi-annual dividends paid and the fair market value of CVS Health stock at the grant date.


(2)	The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over the previous six month period.


(3)	The risk-free interest rate is selected based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP purchases (i.e., six months).

(4)

The expected life is based on the semi-annual purchase period.

RSU and performance share unit activity

The following table is a summary of the restricted stock unit and performance stock unit activity for the year ended December 31, 2019:



In thousands, except weighted average grant date fair value	Units		Weighted Average Grant Date Fair Value
Outstanding at beginning of year, nonvested	11,005		$	76.18
Granted	7,644		$	54.34
Vested	(4,216	)	$	62.59
Forfeited	(1,308	)	$	58.73
Outstanding at end of year, nonvested	13,125		$	61.57

Cash proceeds received and tax benefit from share-based payment awards

The following table is a summary of stock option and SAR activity that occurred for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018		2017
Cash received from stock options exercised (including ESPP)	$	210	$	242	$	329
Payments for taxes for net share settlement of equity awards	112		97		71
Intrinsic value of stock options and SARs exercised	30		79		176
Fair value of stock options and SARs vested	467		324		341

Schedule of valuation assumptions

The fair value of each stock option and SAR is estimated using the Black-Scholes option pricing model based on the following assumptions at the time of grant:



	2019			2018			2017
Dividend yield ⁽¹⁾	3.68		%	2.76		%	2.56		%
Expected volatility ⁽²⁾	21.76		%	21.27		%	18.39		%
Risk-free interest rate ⁽³⁾	0.56		%	2.77		%	1.77		%
Expected life (in years) ⁽⁴⁾	6.3			4.8			4.1
Weighted-average grant date fair value	$	6.27		$	24.55		$	9.43

^{_____________________________________________}


(1)	The dividend yield is based on annual dividends paid and the fair market value of CVS Health stock at the grant date.


(2)	The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over a period equal to the expected life of each option or SAR grant after adjustments for infrequent events such as stock splits.


(3)	The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options or SARs being valued.

(4)

The expected life represents the number of years the options or SARs are expected to be outstanding from grant date based on historical option or SAR holder exercise experience.

Schedule of stock options and stock appreciation rights award activity

The following table is a summary of the Company’s stock option and SAR activity for the year ended December 31, 2019:



In thousands, except weighted average exercise price and remaining contractual term	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at beginning of year	22,909		$	71.15
Granted	6,538		$	54.40
Exercised	(3,667	)	$	46.17
Forfeited	(769	)	$	68.12
Expired	(1,109	)	$	82.40
Outstanding at end of year	23,902		$	69.98	4.76	$	274,987
Exercisable at end of year	13,267		$	77.48	2.73	109,765
Vested at end of year and expected to vest in the future	23,328		$	70.28	4.67	265,128

Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Share repurchase programs

The following share repurchase programs have been authorized by the Board:



In billions Authorization Date	Authorized		Remaining as of December 31, 2019
November 2, 2016 (“2016 Repurchase Program”)	$	15.0	$	13.9
December 15, 2014 (“2014 Repurchase Program”)	10.0		—

Statutory accounting practices disclosure

At December 31, 2019, these amounts were as follows:



In millions
Estimated minimum statutory surplus required by regulators	$	5,841
Investments on deposit with regulatory bodies	672
Estimated maximum dividend distributions permitted in 2020 without prior regulatory approval	366

- Definition

Tabular disclosure of how the entity's reporting under GAAP as of the balance sheet date differs from the results based on prescribed and permitted accounting practices of the state or country of domicile in which a relevant statutory filing is made, or differences in results based on the National Association of Insurance Commissioners (NAIC) prescribed practices, or a combination thereof. Describes the accounting practices used and the related monetary effect on statutory surplus, net income, and risk-based capital. If an insurance enterprise's risk-based capital would have triggered a regulatory event had it not used a permitted practice, that fact is disclosed in the financial statements. Permitted statutory accounting practices include practices not prescribed but allowed by the domiciliary state insurance department regulatory authority.

+ References + Details

Other Comprehensive Income (Tables)

12 Months Ended

Dec. 31, 2019

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

Schedule of Accumulated Other Comprehensive Income (Loss)

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) in 2019, 2018 and 2017:



	At December 31,
In millions	2019			2018			2017
Net unrealized investment gains:
Beginning of year balance	$	97		$	—		$	—
Other comprehensive income before reclassifications ($927, $132 and $0 pretax)	763			97			—
Amounts reclassified from accumulated other comprehensive income ($(105), $1 and $0 pretax) ⁽¹⁾	(86		)	—			—
Other comprehensive income	677			97			—
End of year balance	774			97			—

Foreign currency translation adjustments:
Beginning of year balance	(158		)	(129		)	(127		)
Other comprehensive income (loss) before reclassifications	8			(29		)	(2		)
Amounts reclassified from accumulated other comprehensive loss ⁽²⁾	154			—			—
Other comprehensive income (loss)	162			(29		)	(2		)
End of year balance	4			(158		)	(129		)

Net cash flow hedges:
Beginning of year balance	312			(15		)	(5		)
Adoption of new accounting standard ⁽³⁾	—			(3		)	—
Other comprehensive income (loss) before reclassifications ($(25), $465 and $(18) pretax)	(18		)	344			(11		)
Amounts reclassified from accumulated other comprehensive income (loss) ($(20), $(19) and $2 pretax) ⁽⁴⁾	(15		)	(14		)	1
Other comprehensive income (loss)	(33		)	330			(10		)
End of year balance	279			312			(15		)

Pension and other postretirement benefits:
Beginning of year balance	(149		)	(21		)	(173		)
Adoption of new accounting standard ⁽³⁾	—			(4		)	—
Other comprehensive income (loss) before reclassifications ($162, $(178) and $0 pretax)	120			(132		)	—
Amounts reclassified from accumulated other comprehensive loss ($(12), $11 and $249 pretax) ⁽⁵⁾	(9		)	8			152
Other comprehensive income (loss)	111			(124		)	152
End of year balance	(38		)	(149		)	(21		)

Total beginning of year accumulated other comprehensive income (loss)	102			(165		)	(305		)
Adoption of new accounting standard ⁽³⁾	—			(7		)	—
Total other comprehensive income	917			274			140
Total end of year accumulated other comprehensive income (loss)	$	1,019		$	102		$	(165	)

^{_____________________________________________}


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


(2)	Amounts reclassified from accumulated other comprehensive loss represent the elimination of the cumulative translation adjustment associated with the sale of Onofre, which was sold on July 1, 2019. The loss on the divestiture of Onofre is reflected in operating expenses in the consolidated statements of operations.


(3)	Reflects the adoption of ASU 2018-02, Income Statement Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income during the year ended December 31, 2018.


(4)	Amounts reclassified from accumulated other comprehensive income (loss) for specifically identified cash flow hedges are included within interest expense in the consolidated statements of operations. The Company expects to reclassify approximately $14 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(5)

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

Earnings (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Reconciliation of basic and diluted earnings (loss) per share

The following is a reconciliation of basic and diluted earnings (loss) per share from continuing operations for the years ended December 31, 2019, 2018 and 2017:



In millions, except per share amounts	2019			2018			2017
Numerator for earnings (loss) per share calculation:
Income (loss) from continuing operations	$	6,631		$	(596	)	$	6,631
Income allocated to participating securities	(5		)	(3		)	(24		)
Net (income) loss attributable to noncontrolling interests	3			2			(1		)
Income (loss) from continuing operations attributable to CVS Health	$	6,629		$	(597	)	$	6,606

Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,301			1,044			1,020
Effect of dilutive securities	4			—			4
Weighted average shares, diluted	1,305			1,044			1,024

Earnings (loss) per share from continuing operations:
Basic	$	5.10		$	(0.57	)	$	6.48
Diluted	$	5.08		$	(0.57	)	$	6.45

Reinsurance (Tables)

12 Months Ended

Dec. 31, 2019

Reinsurance Disclosures [Abstract]

Schedule of reinsurance recoverables

Reinsurance recoverables (recorded as other current assets or other assets on the consolidated balance sheets) at December 31, 2019 and 2018 were as follows:



In millions	2019		2018
Reinsurer
Hartford Life and Accident Insurance Company	$	3,085	$	3,470
Lincoln Life & Annuity Company of New York	413		424
WellCare Health Plans	355		—
VOYA Retirement Insurance and Annuity Company	175		186
All Other	103		461
Total	$	4,131	$	4,541

Schedule of direct, assumed and ceded premiums earned

Direct, assumed and ceded premiums earned for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Direct	$	62,968		$	8,365
Assumed	2,108			38
Ceded	(1,954		)	(219		)
Net premiums	$	63,122		$	8,184

Schedule of impact of reinsurance on benefit costs

The impact of reinsurance on benefit costs for the years ended December 31, 2019 and 2018 were as follows:



In millions	2019			2018
Direct	$	52,592		$	6,773
Assumed	1,562			32
Ceded	(1,625		)	(211		)
Net benefit costs	$	52,529		$	6,594

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Summarized financial information of segments



In millions	Pharmacy Services ⁽¹⁾		Retail/ LTC		Health Care Benefits		Corporate/ Other			Intersegment Eliminations ⁽²⁾			Consolidated Totals
2019:
Revenues from customers	$	141,491	$	86,608	$	69,005	$	100		$	(41,439	)	$	255,765
Net investment income	—		—		599		412			—			1,011
Total revenues	141,491		86,608		69,604		512			(41,439		)	256,776
Adjusted operating income (loss)	5,129		6,705		5,202		(1,000		)	(697		)	15,339
Depreciation and amortization	766		1,723		1,721		161			—			4,371
Additions to property and equipment	332		1,212		533		404			—			2,481
2018:
Revenues from customers	134,736		83,989		8,904		4			(33,714		)	193,919
Net investment income	—		—		58		602			—			660
Total revenues	134,736		83,989		8,962		606			(33,714		)	194,579
Adjusted operating income (loss)	4,955		7,403		528		(856		)	(769		)	11,261
Depreciation and amortization	710		1,698		172		138			—			2,718
Additions to property and equipment	326		1,350		46		401			—			2,123
2017:
Revenues from customers	130,822		79,398		3,582		—			(29,037		)	184,765
Net investment income	—		—		5		16			—			21
Total revenues	130,822		79,398		3,587		16			(29,037		)	184,786
Adjusted operating income (loss)	4,628		7,475		359		(896		)	(741		)	10,825
Depreciation and amortization	710		1,651		2		116			—			2,479
Additions to property and equipment	311		1,398		—		340			—			2,049

^{_____________________________________________}


(1)	Total revenues of the Pharmacy Services segment include approximately $11.5 billion, $11.4 billion and $10.8 billion of retail co-payments for 2019, 2018 and 2017, respectively. See Note 1 ‘‘Significant Accounting Policies’’ for additional information about retail co-payments.


(2)	Intersegment eliminations relate to intersegment revenue generating activities that occur between the Pharmacy Services segment, the Retail/LTC segment and/or the Health Care Benefits segment.

Reconciliation of operating earnings to net income

The following is a reconciliation of consolidated operating income to adjusted operating income for the years ended December 31, 2019, 2018 and 2017:



In millions	2019		2018			2017
Operating income (GAAP measure)	$	11,987	$	4,021		$	9,538
Amortization of intangible assets ⁽¹⁾	2,436		1,006			817
Acquisition-related transaction and integration costs ⁽²⁾	480		492			65
Store rationalization charges ⁽³⁾	231		—			215
Loss on divestiture of subsidiary ⁽⁴⁾	205		86			9
Goodwill impairments ⁽⁵⁾	—		6,149			181
Impairment of long-lived assets ⁽⁶⁾	—		43			—
Interest income on financing for the Aetna Acquisition ⁽⁷⁾	—		(536		)	—
Adjusted operating income	$	15,339	$	11,261		$	10,825

^{_____________________________________________}

(1)

The Company’s acquisition activities have resulted in the recognition of intangible assets as required under the acquisition method of accounting which consist primarily of trademarks, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired. Definite-lived intangible assets are amortized over their estimated useful lives and are tested for impairment when events indicate that the carrying value may not be recoverable. The amortization of intangible assets is reflected in the Company’s 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)

In 2019, 2018 and 2017, acquisition-related transaction and integration costs relate to the Aetna Acquisition. In 2018 and 2017, acquisition-related transaction and integration costs also relate to the acquisition of Omnicare. The acquisition-related transaction and integration costs are reflected in the Company’s consolidated statements of operations in operating expenses within the Corporate/Other segment and the Retail/LTC segment.

(3)

In 2019, the store rationalization charges relate to the planned closure of 46 underperforming retail pharmacy stores during the second quarter of 2019 and the planned closure of 22 underperforming retail pharmacy stores during the first quarter of 2020. In 2019, the store rationalization charges primarily relate to operating lease right-of-use asset impairment charges and are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment. In 2017, the store rationalization charges related to the Company’s enterprise streamlining initiative and are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment.

(4)

In 2019, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of Onofre, which occurred on July 1, 2019. The loss on divestiture primarily relates to the elimination of the cumulative translation adjustment from accumulated other comprehensive income. In 2018, the loss on divestiture of subsidiary represents the pre-tax loss on the sale of the Company’s RxCrossroads subsidiary for $725 million on January 2, 2018. In 2017, the loss on divestiture of subsidiary represents transaction costs associated with the sale of RxCrossroads. The losses on divestiture of subsidiary are reflected in the Company’s consolidated statements of operations in operating expenses within the Retail/LTC segment and Corporate/Other segment.


(5)	In 2018, the goodwill impairments relate to the LTC reporting unit within the Retail/LTC segment. In 2017, the goodwill impairments relate to the RxCrossroads reporting unit within the Retail/LTC segment.


(6)	In 2018, impairment of long-lived assets primarily relates to the impairment of property and equipment within the Retail/LTC segment and is reflected in operating expenses in the Company’s consolidated statements of operations.

(7)

In 2018, the Company recorded interest income of $536 million on the proceeds of the $40 billion of unsecured senior notes it issued in March 2018 to partially fund the Aetna Acquisition. All amounts are for the periods prior to the close of the Aetna Acquisition, which occurred on November 28, 2018, and were recorded within the Corporate/Other segment.

Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information



In millions, except per share amounts	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Year
2019:
Total revenues	$	61,646	$	63,431	$	64,810	$	66,889	$	256,776
Operating income	2,690		3,332		2,928		3,037		11,987
Income from continuing operations	1,427		1,931		1,529		1,744		6,631
Net income attributable to CVS Health	1,421		1,936		1,530		1,747		6,634
Per common share data:
Basic earnings per common share:
Income from continuing operations attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.34	$	5.10
Income from discontinued operations attributable to CVS Health	$	—	$	—	$	—	$	—	$	—
Net income attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.34	$	5.10
Diluted earnings per common share:
Income from continuing operations attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.33	$	5.08
Income from discontinued operations attributable to CVS Health	$	—	$	—	$	—	$	—	$	—
Net income attributable to CVS Health	$	1.09	$	1.49	$	1.17	$	1.33	$	5.08
Dividends per common share	$	0.50	$	0.50	$	0.50	$	0.50	$	2.00



In millions, except per share amounts	First Quarter		Second Quarter			Third Quarter		Fourth Quarter			Year
2018:
Total revenues	$	45,743	$	46,922		$	47,490	$	54,424		$	194,579
Operating income (loss)	1,996		(1,373		)	2,574		824			4,021
Income (loss) from continuing operations	998		(2,562		)	1,390		(422		)	(596		)
Net income (loss) attributable to CVS Health	998		(2,563		)	1,390		(419		)	(594		)
Per common share data:
Basic earnings (loss) per common share:
Income (loss) from continuing operations attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Income (loss) from discontinued operations attributable to CVS Health	$	—	$	—		$	—	$	—		$	—
Net income (loss) attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Diluted earnings (loss) per common share:
Income (loss) from continuing operations attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Income (loss) from discontinued operations attributable to CVS Health	$	—	$	—		$	—	$	—		$	—
Net income (loss) attributable to CVS Health	$	0.98	$	(2.52	)	$	1.36	$	(0.37	)	$	(0.57	)
Dividends per common share	$	0.50	$	0.50		$	0.50	$	0.50		$	2.00

Significant Accounting Policies - Narrative (Details) shares in Millions, person in Millions, patient in Millions, member in Millions		1 Months Ended	3 Months Ended					12 Months Ended
	Jul. 01, 2019 USD ($) store	Dec. 31, 2018 USD ($) shares	Sep. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) shares	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2019 USD ($) member person clinic patient store Segment state shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)	Dec. 31, 2014	Jan. 01, 2019 USD ($)	Oct. 31, 2014 payment
Significant Accounting Policies [Line Items]
Number of plan members \| member								105
Number of patients served per year \| patient								1
Number of people served \| person								37
Number of reportable segments \| Segment								4
Deferred acquisition costs		$ 22,000,000			$ 22,000,000			$ 271,000,000	$ 22,000,000
Depreciation								1,900,000,000	1,700,000,000	$ 1,700,000,000
Store rationalization charges								231,000,000	0	215,000,000
Impairment of long-lived assets								0	43,000,000	0
Goodwill impairments			$ 0					0	6,149,000,000	181,000,000
Impairment of intangible assets, indefinite-lived								$ 0	0	0
Assumed interest rates on long-duration group life and long-term care contracts		5.10%						5.10%
HSA balances		$ 2,100,000,000			2,100,000,000			$ 2,200,000,000	2,100,000,000
Self insurance liabilities		$ 865,000,000			$ 865,000,000			$ 856,000,000	865,000,000
Pharmacy rebate period								30 days
Health insurer fee								$ 0	157,000,000	0
Advertising costs								$ 396,000,000	364,000,000	230,000,000
Provisional benefit of revaluation of net DTL due to TCJA										1,500,000,000
Benefit of revaluation of net DTL due to TCJA									$ 100,000,000
Common stock, shares held in trust (in shares) \| shares		1			1			1	1
VIE, ownership percentage											50.00%
Initial contractual term											10 years
Number of quarterly payments from VIE \| payment													39
Proceeds from VIE								$ 183,000,000	$ 183,000,000	183,000,000
Expenses from transactions with related party								32,000,000	45,000,000	35,000,000
Other revenues from transactions with related party								96,000,000	135,000,000	139,000,000
Charitable contribution to CVS Health Foundation								30,000,000
Increase to retained earnings		$ 40,911,000,000			$ 40,911,000,000			$ 45,108,000,000	40,911,000,000			$ 41,089,000,000
Heartland Healthcare Services
Significant Accounting Policies [Line Items]
Number of states in which entity operates \| state								4
Foreign currency translation adjustments
Significant Accounting Policies [Line Items]
Cumulative translation adjustment from AOCI eliminated upon divestiture								$ (154,000,000)	0	0
Other Insurance Liabilities
Significant Accounting Policies [Line Items]
Liability for unpaid claims		816,000,000			816,000,000			704,000,000	816,000,000
Future policy benefits		536,000,000			536,000,000			508,000,000	536,000,000
Other Long-Term Insurance Liabilities
Significant Accounting Policies [Line Items]
Liability for unpaid claims		1,900,000,000			1,900,000,000			1,800,000,000	1,900,000,000
Future policy benefits		$ 6,200,000,000			6,200,000,000			$ 5,600,000,000	6,200,000,000
Minimum
Significant Accounting Policies [Line Items]
Period after date of service a claim is paid								6 months
Assumed interest rates on limited payment pension contracts on large case pension business (in hundredths)		3.50%						3.50%
Interest rate for pension and annuity investment contracts		3.50%						3.50%
Share-based compensation arrangement, requisite service period								3 years
Minimum \| Building, building improvements and leasehold improvements
Significant Accounting Policies [Line Items]
Useful life of property plant and equipment								1 year
Minimum \| Fixtures, equipment and internally developed software
Significant Accounting Policies [Line Items]
Useful life of property plant and equipment								3 years
Maximum
Significant Accounting Policies [Line Items]
Lease renewal term								5 years
Period after date of service a claim is paid								48 months
Assumed interest rates on limited payment pension contracts on large case pension business (in hundredths)		11.30%						11.30%
Interest rate for pension and annuity investment contracts		13.40%						15.00%
Share-based compensation arrangement, requisite service period								5 years
Maximum \| Building, building improvements and leasehold improvements
Significant Accounting Policies [Line Items]
Useful life of property plant and equipment								40 years
Maximum \| Fixtures, equipment and internally developed software
Significant Accounting Policies [Line Items]
Useful life of property plant and equipment								10 years
ASU 2016-02
Significant Accounting Policies [Line Items]
Increase to retained earnings												178,000,000
Increase to retained earnings, pre-tax												$ 241,000,000
Brazil Subsidiary \| Discontinued Operations, Disposed of by Sale \| Foreign currency translation adjustments
Significant Accounting Policies [Line Items]
Cumulative translation adjustment from AOCI eliminated upon divestiture	$ 154,000,000
Retail/ LTC
Significant Accounting Policies [Line Items]
Number of stores \| store								9,900
Number of walk-in medical clinics \| clinic								1,100
Store rationalization charges			$ 96,000,000	$ 135,000,000						215,000,000
Goodwill impairments									6,149,000,000	$ 181,000,000
Retail/ LTC \| Brazil Subsidiary \| Discontinued Operations, Disposed of by Sale
Significant Accounting Policies [Line Items]
Number of stores \| store	50
Retail/ LTC \| Long-Term Care Reporting Unit
Significant Accounting Policies [Line Items]
Goodwill impairments					2,200,000,000	$ 0	$ 3,900,000,000
Health Care Benefits
Significant Accounting Policies [Line Items]
Number of people served \| person								37
Goodwill impairments									0
Health Insurance Product Line
Significant Accounting Policies [Line Items]
Premium deficiency reserve		$ 16,000,000			$ 16,000,000			$ 4,000,000	$ 16,000,000

Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash and cash equivalents	$ 5,683	$ 4,059	$ 1,696
Restricted cash (included in other current assets)	0	6	14
Restricted cash (included in other assets)	271	230	190
Total cash, cash equivalents and restricted cash at the end of the period in the consolidated statements of cash flows	$ 5,954	$ 4,295	$ 1,900	$ 3,520

Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Trade receivables	$ 6,717	$ 6,497
Vendor and manufacturer receivables	7,856	7,315
Premium receivables	2,663	2,259
Other receivables	2,381	1,560
Total accounts receivable, net	19,617	17,631
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	287	162	$ 158
Additions charged to bad debt expense	111	162	139
Write-offs charged to allowance	(79)	(37)	(135)
Ending balance	$ 319	$ 287	$ 162

Significant Accounting Policies - Property Plant and Equipment (Details) - USD ($) $ in Millions	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 28,934		$ 26,869
Accumulated depreciation and amortization	(16,890)		(15,520)
Property and equipment, net	12,044	$ 11,360
Property and equipment, net			11,349
Land
Property, Plant and Equipment [Line Items]
Total property and equipment	1,981		1,872
Building and improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	4,068		3,785
Fixtures and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment	13,807		13,028
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment	5,611		5,384
Software
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 3,467		$ 2,800

Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Net investment income									$ 1,011	$ 660	$ 21
Total revenues	$ 66,889	$ 64,810	$ 63,431	$ 61,646	$ 54,424	$ 47,490	$ 46,922	$ 45,743	256,776	194,579	184,786
Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									165,899	164,845
Front Store
Disaggregation of Revenue [Line Items]
Revenues									19,422	19,055
Premiums
Disaggregation of Revenue [Line Items]
Revenues									63,122	8,184
Other
Disaggregation of Revenue [Line Items]
Revenues									7,322	1,835
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Net investment income									0	0	0
Total revenues									(41,439)	(33,714)	(29,037)
Intersegment Eliminations \| Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									(41,439)	(33,714)
Intersegment Eliminations \| Front Store
Disaggregation of Revenue [Line Items]
Revenues									0	0
Intersegment Eliminations \| Premiums
Disaggregation of Revenue [Line Items]
Revenues									0	0
Intersegment Eliminations \| Other
Disaggregation of Revenue [Line Items]
Revenues									0	0
Pharmacy Services \| Operating Segments
Disaggregation of Revenue [Line Items]
Net investment income									0	0	0
Total revenues									141,491	134,736	130,822
Pharmacy Services \| Operating Segments \| Pharmacy network
Disaggregation of Revenue [Line Items]
Total revenues									88,755	87,167
Pharmacy Services \| Operating Segments \| Mail choice
Disaggregation of Revenue [Line Items]
Total revenues									52,141	47,049
Pharmacy Services \| Operating Segments \| Other
Disaggregation of Revenue [Line Items]
Total revenues									595	520
Pharmacy Services \| Operating Segments \| Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									140,896	134,216
Pharmacy Services \| Operating Segments \| Front Store
Disaggregation of Revenue [Line Items]
Revenues									0	0
Pharmacy Services \| Operating Segments \| Premiums
Disaggregation of Revenue [Line Items]
Revenues									0	0
Pharmacy Services \| Operating Segments \| Other
Disaggregation of Revenue [Line Items]
Revenues									595	520
Retail/ LTC \| Operating Segments
Disaggregation of Revenue [Line Items]
Net investment income									0	0	0
Total revenues									86,608	83,989	79,398
Retail/ LTC \| Operating Segments \| Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									66,442	64,179
Retail/ LTC \| Operating Segments \| Front Store
Disaggregation of Revenue [Line Items]
Revenues									19,422	19,055
Retail/ LTC \| Operating Segments \| Premiums
Disaggregation of Revenue [Line Items]
Revenues									0	0
Retail/ LTC \| Operating Segments \| Other
Disaggregation of Revenue [Line Items]
Revenues									744	755
Health Care Benefits \| Operating Segments
Disaggregation of Revenue [Line Items]
Net investment income									599	58	5
Total revenues									69,604	8,962	3,587
Health Care Benefits \| Operating Segments \| Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									0	164
Health Care Benefits \| Operating Segments \| Front Store
Disaggregation of Revenue [Line Items]
Revenues									0	0
Health Care Benefits \| Operating Segments \| Premiums
Disaggregation of Revenue [Line Items]
Revenues									63,031	8,180
Health Care Benefits \| Operating Segments \| Other
Disaggregation of Revenue [Line Items]
Revenues									5,974	560
Corporate/ Other
Disaggregation of Revenue [Line Items]
Net investment income									412	602	16
Total revenues									512	606	$ 16
Corporate/ Other \| Pharmacy
Disaggregation of Revenue [Line Items]
Revenues									0	0
Corporate/ Other \| Front Store
Disaggregation of Revenue [Line Items]
Revenues									0	0
Corporate/ Other \| Premiums
Disaggregation of Revenue [Line Items]
Revenues									91	4
Corporate/ Other \| Other
Disaggregation of Revenue [Line Items]
Revenues									$ 9	$ 0

Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Trade receivables (included in accounts receivable, net)			$ 6,717	$ 6,497
Contract liabilities (included in accrued expenses)	$ 67	$ 53	$ 73	$ 67
Change in Contract with Customer, Liability [Abstract]
Balance at December 31, 2018	67	53
Adoption of ASU 2014-09	0	17
Rewards earnings and gift card issuances	365	332
Redemption and breakage	(359)	(335)
Balance at December 31, 2019	$ 73	$ 67

Significant Accounting Policies - Variable Interest Entities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Variable Interest Entity [Line Items]
Long-term investments	$ 17,314	$ 15,732
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Long-term investments	1,021	1,069
Hedge fund investments \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Long-term investments	271	270
Private equity investments \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Long-term investments	538	524
Real estate partnerships \| Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Long-term investments	$ 212	$ 275

Significant Accounting Policies - Discontinued Operations (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Loss from discontinued operations			$ (13)
Income tax benefit			5
Loss from discontinued operations, net of tax	$ 0	$ 0	$ (8)

- Definition

Amount before tax of income (loss) from a discontinued operation. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References + Details

- Definition

Amount of tax expense (benefit) related to a discontinued operation. Includes, but is not limited to, tax expense (benefit) related to income (loss) from operations during the phase-out period, tax expense (benefit) related to gain (loss) on disposal, tax expense (benefit) related to gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and tax expense (benefit) related to adjustments of a prior period gain (loss) on disposal.

+ References + Details

- Definition

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References + Details

Significant Accounting Policies - Impact of New Lease Standard On Balance Sheet Line Items (Details) - USD ($) $ in Millions	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets:
Other current assets	$ 5,113	$ 4,533	$ 4,581
Total current assets	50,302	45,195	45,243
Property and equipment, net			11,349
Property and equipment, net	12,044	11,360
Operating lease right-of-use assets	20,860	20,987
Intangible assets, net	33,121	36,307	36,524
Other assets	4,600	4,525	5,046
Total assets	222,449	216,668	196,456
Accrued expenses	12,133	10,659	10,711
Current portion of operating lease liabilities	1,596	1,803
Current portion of long-term debt	3,781	1,267	1,265
Total current liabilities	53,303	45,762	44,009
Long-term operating lease liabilities	18,926	18,832
Long-term debt		71,348	71,444
Deferred income taxes	7,294	7,740	7,677
Other long-term liabilities	2,162	2,262	2,780
Total liabilities	158,279	157,947	137,913
Retained earnings	45,108	41,089	40,911
Total CVS Health shareholders’ equity	63,864	58,403	58,225
Total shareholders’ equity	$ 64,170	58,721	$ 58,543	$ 37,695	$ 36,834
ASU 2016-02
Consolidated Balance Sheets:
Other current assets		(48)
Total current assets		(48)
Property and equipment, net		11
Operating lease right-of-use assets		20,987
Intangible assets, net		(217)
Other assets		(521)
Total assets		20,212
Accrued expenses		(52)
Current portion of operating lease liabilities		1,803
Current portion of long-term debt		2
Total current liabilities		1,753
Long-term operating lease liabilities		18,832
Long-term debt		(96)
Deferred income taxes		63
Other long-term liabilities		(518)
Total liabilities		20,034
Retained earnings		178
Total CVS Health shareholders’ equity		178
Total shareholders’ equity		$ 178

Acquisitions and Divestitures - Narrative (Details) $ / shares in Units, $ in Millions		1 Months Ended	12 Months Ended
	Nov. 28, 2018 USD ($) $ / shares	Dec. 31, 2018 USD ($)	Dec. 31, 2019 USD ($) clinic store	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jul. 01, 2019 store	Jan. 02, 2018 USD ($)
Business Acquisition [Line Items]
Loss on sale of subsidiary			$ (205)	$ (86)	$ 0
Aetna Inc.
Business Acquisition [Line Items]
Percentage of voting interests acquired	100.00%
Business acquisition, share price (in dollars per share) \| $ / shares	$ 145.00
Per share exchange ratio \| $ / shares	0.8378
The assigned value per share of acquiree (in dollars per share) \| $ / shares	$ 212
Consideration transferred in acquisition	$ 70,000
Assigned value of acquiree	78,000
New debt issued in acquisition	$ 45,000
Revenue of acquiree since acquisition date		$ 5,600
Income of acquiree since acquisition date		146
Business acquisition transaction costs		$ 147		147	34
Retail/ LTC
Business Acquisition [Line Items]
Number of stores \| store			9,900
Number of walk-in medical clinics \| clinic			1,100
Discontinued Operations, Disposed of by Sale \| Brazil Subsidiary \| Retail/ LTC
Business Acquisition [Line Items]
Number of stores \| store						50
Loss on sale of subsidiary			$ 205
Discontinued Operations, Disposed of by Sale \| RX Crossroads \| Retail/ LTC
Business Acquisition [Line Items]
Loss on sale of subsidiary				$ 86	$ 9
Disposal consideration received							$ 725

Acquisitions and Divestitures - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Nov. 28, 2018	Dec. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 79,749	$ 78,678		$ 38,451
Aetna Inc.
Business Acquisition [Line Items]
Cash and cash equivalents			$ 6,565
Accounts receivable			4,094
Other current assets			3,894
Investments (current and long-term)			17,984
Goodwill			47,755
Intangible assets			22,571
Other assets			8,249
Total assets acquired			111,112
Health care costs payable			5,302
Other current liabilities			9,940
Debt (current and long-term)			8,098
Deferred income taxes			4,608
Other long-term liabilities			13,078
Total liabilities assumed			41,026
Noncontrolling interests			320
Total consideration transferred			$ 69,766

Acquisitions and Divestitures - Pro Forma (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Business Combinations [Abstract]
Total revenues	$ 243,232	$ 236,000
Income from continuing operations	$ 1,152	$ 6,813
Basic earnings per share from continuing operations attributable to CVS Health (in dollars per share)	$ 0.89	$ 5.25
Diluted earnings per share from continuing operations attributable to CVS Health (in dollars per share)	$ 0.88	$ 5.21

Investments - Schedule of Total Investments (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Total Investments [Line Items]
Current	$ 2,373	$ 2,522
Long-term	17,314	15,732
Total	19,687	18,254
Debt securities available for sale
Total Investments [Line Items]
Current	2,251	2,359
Long-term	14,671	12,896
Total	16,922	15,255
Mortgage loans
Total Investments [Line Items]
Current	122	145
Long-term	1,091	1,216
Total	1,213	1,361
Other investments
Total Investments [Line Items]
Current	0	18
Long-term	1,552	1,620
Total	$ 1,552	$ 1,638

Investments - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Investments - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Investments related to 2012 contract conversion	$ 537	$ 531
Net investment income	$ 1,011	$ 660	$ 21
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Weighted average duration of securities	3 years 3 months 18 days
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Weighted average duration of securities	6 years 1 month 6 days
Other asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Weighted average duration of securities	1 year 2 months 12 days

Investments - Debt Securities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 15,898,000,000	$ 15,119,000,000
Gross Unrealized Gains	1,035,000,000	172,000,000
Gross Unrealized Losses	(11,000,000)	(36,000,000)
Fair Value	16,922,000,000	15,255,000,000
U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,791,000,000	1,662,000,000
Gross Unrealized Gains	62,000,000	26,000,000
Gross Unrealized Losses	(1,000,000)	0
Fair Value	1,852,000,000	1,688,000,000
States, municipalities and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,202,000,000	2,370,000,000
Gross Unrealized Gains	108,000,000	30,000,000
Gross Unrealized Losses	(1,000,000)	(1,000,000)
Fair Value	2,309,000,000	2,399,000,000
U.S. corporate securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	7,167,000,000	6,444,000,000
Gross Unrealized Gains	573,000,000	61,000,000
Gross Unrealized Losses	(3,000,000)	(16,000,000)
Fair Value	7,737,000,000	6,489,000,000
Foreign securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	2,149,000,000	2,355,000,000
Gross Unrealized Gains	200,000,000	31,000,000
Gross Unrealized Losses	(1,000,000)	(3,000,000)
Fair Value	2,348,000,000	2,383,000,000
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	508,000,000	567,000,000
Gross Unrealized Gains	25,000,000	10,000,000
Gross Unrealized Losses	0	0
Fair Value	533,000,000	577,000,000
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	654,000,000	594,000,000
Gross Unrealized Gains	46,000,000	11,000,000
Gross Unrealized Losses	0	0
Fair Value	700,000,000	605,000,000
Other asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	1,397,000,000	1,097,000,000
Gross Unrealized Gains	13,000,000	3,000,000
Gross Unrealized Losses	(5,000,000)	(15,000,000)
Fair Value	1,405,000,000	1,085,000,000
Redeemable preferred securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	30,000,000	30,000,000
Gross Unrealized Gains	8,000,000	0
Gross Unrealized Losses	0	(1,000,000)
Fair Value	38,000,000	29,000,000
Supporting experience-rated products
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Gains	83,000,000	12,000,000
Gross Unrealized Losses	0	(2,000,000)
Fair Value	$ 965,000,000	$ 916,000,000

Investments - Debt Securities by Maturity (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Amortized Cost
Less than one year	$ 1,028
One year through five years	5,507
After five years through ten years	3,081
Greater than ten years	3,723
Amortized Cost	15,898	$ 15,119
Fair Value
Less than one year	1,034
One year through five years	5,702
After five years through ten years	3,296
Greater than ten years	4,252
Total	16,922	15,255
Residential mortgage-backed securities
Amortized Cost
Debt securities, maturity, without single maturity date	508
Amortized Cost	508	567
Fair Value
Debt securities, maturity, without single maturity date	533
Total	533	577
Commercial mortgage-backed securities
Amortized Cost
Debt securities, maturity, without single maturity date	654
Amortized Cost	654	594
Fair Value
Debt securities, maturity, without single maturity date	700
Total	700	605
Other asset-backed securities
Amortized Cost
Debt securities, maturity, without single maturity date	1,397
Amortized Cost	1,397	1,097
Fair Value
Debt securities, maturity, without single maturity date	1,405
Total	$ 1,405	$ 1,085

Investments - Unrealized Loss Position (Details) $ in Millions	Dec. 31, 2019 USD ($) security	Dec. 31, 2018 USD ($) security
Number of Securities
Number of Securities, Less than 12 months \| security	522	2,279
Number of Securities, Greater than 12 months \| security	200	0
Number of Securities \| security	722	2,279
Fair Value
Fair Value, Less than 12 months	$ 982	$ 2,409
Fair Value, Greater than 12 months	187	0
Fair Value	1,169	2,409
Unrealized Losses
Unrealized Losses, Less than 12 months	6	36
Unrealized Losses, Greater than 12 months	5	0
Unrealized Losses	$ 11	$ 36
U.S. government securities
Number of Securities
Number of Securities, Less than 12 months \| security	52	8
Number of Securities, Greater than 12 months \| security	0	0
Number of Securities \| security	52	8
Fair Value
Fair Value, Less than 12 months	$ 168	$ 26
Fair Value, Greater than 12 months	0	0
Fair Value	168	26
Unrealized Losses
Unrealized Losses, Less than 12 months	1	0
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 1	$ 0
States, municipalities and political subdivisions
Number of Securities
Number of Securities, Less than 12 months \| security	66	54
Number of Securities, Greater than 12 months \| security	2	0
Number of Securities \| security	68	54
Fair Value
Fair Value, Less than 12 months	$ 115	$ 86
Fair Value, Greater than 12 months	5	0
Fair Value	120	86
Unrealized Losses
Unrealized Losses, Less than 12 months	1	1
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 1	$ 1
U.S. corporate securities
Number of Securities
Number of Securities, Less than 12 months \| security	181	1,399
Number of Securities, Greater than 12 months \| security	2	0
Number of Securities \| security	183	1,399
Fair Value
Fair Value, Less than 12 months	$ 305	$ 1,431
Fair Value, Greater than 12 months	0	0
Fair Value	305	1,431
Unrealized Losses
Unrealized Losses, Less than 12 months	2	16
Unrealized Losses, Greater than 12 months	1	0
Unrealized Losses	$ 3	$ 16
Foreign securities
Number of Securities
Number of Securities, Less than 12 months \| security	39	243
Number of Securities, Greater than 12 months \| security	0	0
Number of Securities \| security	39	243
Fair Value
Fair Value, Less than 12 months	$ 75	$ 314
Fair Value, Greater than 12 months	0	0
Fair Value	75	314
Unrealized Losses
Unrealized Losses, Less than 12 months	1	3
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 1	$ 3
Residential mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months \| security	30	45
Number of Securities, Greater than 12 months \| security	9	0
Number of Securities \| security	39	45
Fair Value
Fair Value, Less than 12 months	$ 16	$ 1
Fair Value, Greater than 12 months	0	0
Fair Value	16	1
Unrealized Losses
Unrealized Losses, Less than 12 months	0	0
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 0	$ 0
Commercial mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months \| security	16
Number of Securities, Greater than 12 months \| security	0
Number of Securities \| security	16
Fair Value
Fair Value, Less than 12 months	$ 49
Fair Value, Greater than 12 months	0
Fair Value	49
Unrealized Losses
Unrealized Losses, Less than 12 months	0
Unrealized Losses, Greater than 12 months	0
Unrealized Losses	$ 0
Other asset-backed securities
Number of Securities
Number of Securities, Less than 12 months \| security	138	516
Number of Securities, Greater than 12 months \| security	187	0
Number of Securities \| security	325	516
Fair Value
Fair Value, Less than 12 months	$ 254	$ 528
Fair Value, Greater than 12 months	182	0
Fair Value	436	528
Unrealized Losses
Unrealized Losses, Less than 12 months	1	15
Unrealized Losses, Greater than 12 months	4	0
Unrealized Losses	$ 5	$ 15
Redeemable preferred securities
Number of Securities
Number of Securities, Less than 12 months \| security		14
Number of Securities, Greater than 12 months \| security		0
Number of Securities \| security		14
Fair Value
Fair Value, Less than 12 months		$ 23
Fair Value, Greater than 12 months		0
Fair Value		23
Unrealized Losses
Unrealized Losses, Less than 12 months		1
Unrealized Losses, Greater than 12 months		0
Unrealized Losses		$ 1

Investments - Unrealized Loss Position Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value
Less than one year	$ 12
One year through five years	288
After five years through ten years	160
Greater than ten years	208
Fair Value	1,169	$ 2,409
Unrealized Losses
Less than one year	0
One year through five years	1
After five years through ten years	2
Greater than ten years	3
Unrealized Losses	11	36
Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	16
Fair Value	16	1
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Unrealized Losses	0	0
Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	49
Fair Value	49
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Unrealized Losses	0
Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	436
Fair Value	436	528
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	5
Unrealized Losses	5	$ 15
Supporting experience-rated products
Fair Value
Less than one year	0
One year through five years	3
After five years through ten years	9
Greater than ten years	11
Fair Value	33
Unrealized Losses
Less than one year	0
One year through five years	0
After five years through ten years	0
Greater than ten years	0
Unrealized Losses	0
Supporting experience-rated products \| Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	0
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Supporting experience-rated products \| Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	0
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Supporting experience-rated products \| Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	10
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Supporting remaining products
Fair Value
Less than one year	12
One year through five years	285
After five years through ten years	151
Greater than ten years	197
Fair Value	1,136
Unrealized Losses
Less than one year	0
One year through five years	1
After five years through ten years	2
Greater than ten years	3
Unrealized Losses	11
Supporting remaining products \| Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	16
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Supporting remaining products \| Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	49
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	0
Supporting remaining products \| Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	426
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	$ 5

Investments - Mortgage Loans (Details) - Commercial Real Estate - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Mortgage Loans on Real Estate [Line Items]
New mortgage loans	$ 131	$ 4
Mortgage loans fully-repaid	234	27
Mortgage loans foreclosed	$ 0	$ 0

Investments - Mortgage Loans Credit Ratings Indicator (Details) - Commercial Real Estate - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Mortgage loans	$ 1,213	$ 1,361
1
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Mortgage loans	58	42
2 to 4
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Mortgage loans	1,143	1,301
5 and 6
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Mortgage loans	12	18
7
Debt Securities, Held-to-maturity, Credit Quality Indicator [Line Items]
Mortgage loans	$ 0	$ 0

Investments - Schedule of Mortgage Loan Principal Repayments (Details) - Commercial Real Estate $ in Millions	Dec. 31, 2019 USD ($)
Debt Securities, Available-for-sale [Line Items]
2020	$ 122
2021	235
2022	200
2023	81
2024	193
Thereafter	382
Total	$ 1,213

Investments - Net Investment Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 854	$ 660
Investment expenses	(42)	(3)
Net investment income (excluding net realized capital gains or losses)	812	657
Net realized capital gains	199	3
Net investment income	1,011	660
OTTI losses, investments, portion recognized in earnings, net	(24)
Supporting experience-rated products
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income	44	4
Debt securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	589	61
Mortgage loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	71	6
Other investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 194	$ 593

Investments - Realized Gains (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Investments [Abstract]
Proceeds from sales	$ 4,773	$ 389
Gross realized capital gains	146	2
Gross realized capital losses	$ (17)	$ (2)

Fair Value - Fair Value Measurements (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Assets, Fair Value Disclosure [Abstract]
Debt securities	$ 16,922	$ 15,255
U.S. government securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,852	1,688
States, municipalities and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,309	2,399
U.S. corporate securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	7,737	6,489
Foreign securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,348	2,383
Residential mortgage-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	533	577
Commercial mortgage-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	700	605
Other asset-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,405	1,085
Redeemable preferred securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	38	29
Recurring
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents	5,683	4,059
Debt securities	16,922	15,255
Equity securities	73	73
Total	22,678	19,387
Recurring \| Level 1
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents	3,397	2,619
Debt securities	1,785	1,597
Equity securities	34	19
Total	5,216	4,235
Recurring \| Level 2
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents	2,286	1,440
Debt securities	15,088	13,581
Equity securities	0	0
Total	17,374	15,021
Recurring \| Level 3
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents	0	0
Debt securities	49	77
Equity securities	39	54
Total	88	131
Recurring \| Brokered Securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities		50
Recurring \| U.S. government securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,852	1,688
Recurring \| U.S. government securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,785	1,597
Recurring \| U.S. government securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	67	91
Recurring \| U.S. government securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| States, municipalities and political subdivisions
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,309	2,399
Recurring \| States, municipalities and political subdivisions \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| States, municipalities and political subdivisions \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,309	2,399
Recurring \| States, municipalities and political subdivisions \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| U.S. corporate securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	7,737	6,489
Recurring \| U.S. corporate securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| U.S. corporate securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	7,700	6,422
Recurring \| U.S. corporate securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	37	67
Recurring \| Foreign securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,348	2,383
Recurring \| Foreign securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Foreign securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	2,348	2,380
Recurring \| Foreign securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	3
Recurring \| Residential mortgage-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	533	577
Recurring \| Residential mortgage-backed securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Residential mortgage-backed securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	533	577
Recurring \| Residential mortgage-backed securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Commercial mortgage-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	700	605
Recurring \| Commercial mortgage-backed securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Commercial mortgage-backed securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	700	605
Recurring \| Commercial mortgage-backed securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Other asset-backed securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,405	1,085
Recurring \| Other asset-backed securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Other asset-backed securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	1,405	1,085
Recurring \| Other asset-backed securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Redeemable preferred securities
Assets, Fair Value Disclosure [Abstract]
Debt securities	38	29
Recurring \| Redeemable preferred securities \| Level 1
Assets, Fair Value Disclosure [Abstract]
Debt securities	0	0
Recurring \| Redeemable preferred securities \| Level 2
Assets, Fair Value Disclosure [Abstract]
Debt securities	26	22
Recurring \| Redeemable preferred securities \| Level 3
Assets, Fair Value Disclosure [Abstract]
Debt securities	$ 12	$ 7

Fair Value - Changes in Level 3 Financial Assets (Details) - Recurring - Level 3 $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	$ 131
Net realized and unrealized capital gains (losses):
Included in earnings	(20)
Included in other comprehensive income	23
Purchases	18
Sales	(47)
Settlements	(13)
Transfers out of Level 3, net	(4)
Ending balance	88
Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	3
Net realized and unrealized capital gains (losses):
Included in earnings	0
Included in other comprehensive income	0
Purchases	2
Sales	0
Settlements	(1)
Transfers out of Level 3, net	(4)
Ending balance	0
U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	67
Net realized and unrealized capital gains (losses):
Included in earnings	(33)
Included in other comprehensive income	18
Purchases	3
Sales	(6)
Settlements	(12)
Transfers out of Level 3, net	0
Ending balance	37
Equity securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	54
Net realized and unrealized capital gains (losses):
Included in earnings	13
Included in other comprehensive income	0
Purchases	13
Sales	(41)
Settlements	0
Transfers out of Level 3, net	0
Ending balance	39
Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Beginning balance	7
Net realized and unrealized capital gains (losses):
Included in earnings	0
Included in other comprehensive income	5
Purchases	0
Sales	0
Settlements	0
Transfers out of Level 3, net	0
Ending balance	$ 12

Fair Value - Gross Transfers Into (Out Of) Level 3 (Details) - Recurring - Level 3 $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gross transfers into Level 3	$ 0
Gross transfers out of Level 3	(4)
Net transfers out of Level 3	$ (4)

Fair Value - Carrying Value and Fair Value Classified by Level (Details) - Nonrecurring - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Carrying Value
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Mortgage loans	$ 1,213	$ 1,361
Equity securities	149	140
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Investment contracts with a fixed maturity	5	5
Investment contracts without a fixed maturity	372	382
Long-term debt	68,480	72,709
Estimated Fair Value
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Mortgage loans	1,239	1,366
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Investment contracts with a fixed maturity	5	5
Investment contracts without a fixed maturity	392	357
Long-term debt	74,306	71,252
Estimated Fair Value \| Level 1
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Mortgage loans	0	0
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Investment contracts with a fixed maturity	0	0
Investment contracts without a fixed maturity	0	0
Long-term debt	74,306	71,252
Estimated Fair Value \| Level 2
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Mortgage loans	0	0
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Investment contracts with a fixed maturity	0	0
Investment contracts without a fixed maturity	0	0
Long-term debt	0	0
Estimated Fair Value \| Level 3
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]
Mortgage loans	1,239	1,366
Financial Instruments, Financial Liabilities, Balance Sheet Groupings [Abstract]
Investment contracts with a fixed maturity	5	5
Investment contracts without a fixed maturity	392	357
Long-term debt	$ 0	$ 0

Fair Value - Separate Accounts Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 4,459	$ 3,884
Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	4,459	3,884
Recurring \| Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	145	191
Recurring \| Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3,813	3,286
Recurring \| Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2	3
Recurring \| Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	499	404
Recurring \| Level 1
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,226	784
Recurring \| Level 1 \| Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2	2
Recurring \| Level 1 \| Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,224	782
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	3,233	3,096
Recurring \| Level 2 \| Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	143	189
Recurring \| Level 2 \| Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,589	2,500
Recurring \| Level 2 \| Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2	3
Recurring \| Level 2 \| Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	499	404
Recurring \| Level 3
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	4
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	4
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

Fair Value - Offsetting Financial Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Offsetting [Abstract]
Derivative liabilities subject to offsetting and enforceable master netting arrangements	$ 3
Derivative assets subject to offsetting and enforceable master netting arrangements		$ 13

Goodwill and Other Intangibles - Goodwill (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Roll Forward]
Balance, beginning of the period		$ 78,678,000,000	$ 38,451,000,000
Segment realignment		0
Purchase accounting adjustments		1,071,000,000
Acquisitions			46,788,000,000
Foreign currency translation adjustments			(14,000,000)
Other		0
Divestiture of RxCrossroads subsidiary			(398,000,000)
Impairments	$ 0	0	(6,149,000,000)	$ (181,000,000)
Balance, end of the period		79,749,000,000	78,678,000,000	38,451,000,000
Pharmacy Services
Goodwill [Roll Forward]
Balance, beginning of the period		23,388,000,000	21,819,000,000
Segment realignment		194,000,000
Purchase accounting adjustments		0
Acquisitions			1,569,000,000
Foreign currency translation adjustments			0
Other		(1,000,000)
Divestiture of RxCrossroads subsidiary			0
Impairments			0
Balance, end of the period		23,581,000,000	23,388,000,000	21,819,000,000
Retail/ LTC
Goodwill [Roll Forward]
Balance, beginning of the period		10,806,000,000	16,632,000,000
Segment realignment		0
Purchase accounting adjustments		0
Acquisitions			735,000,000
Foreign currency translation adjustments			(14,000,000)
Other		1,000,000
Divestiture of RxCrossroads subsidiary			(398,000,000)
Impairments			(6,149,000,000)	(181,000,000)
Balance, end of the period		10,807,000,000	10,806,000,000	16,632,000,000
Health Care Benefits
Goodwill [Roll Forward]
Balance, beginning of the period		44,484,000,000	0
Segment realignment		(194,000,000)
Purchase accounting adjustments		1,071,000,000
Acquisitions			44,484,000,000
Foreign currency translation adjustments			0
Other		0
Divestiture of RxCrossroads subsidiary			0
Impairments			0
Balance, end of the period		$ 45,361,000,000	$ 44,484,000,000	$ 0

Goodwill and Other Intangibles - Narrative (Details) - USD ($)	3 Months Ended						12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 02, 2018
Goodwill [Line Items]
Cumulative goodwill impairments		$ 6,100,000,000					$ 6,100,000,000	$ 6,100,000,000
Goodwill impairments	$ 0						0	6,149,000,000	$ 181,000,000
Goodwill		78,678,000,000			$ 38,451,000,000		79,749,000,000	78,678,000,000	38,451,000,000
Amortization of intangible assets							2,436,000,000	1,006,000,000	817,000,000
RX Crossroads
Goodwill [Line Items]
Goodwill impairments					46,000,000	$ 135,000,000
Tax Cuts and Jobs Act, Incomplete Accounting, Change in Tax Rate, Deferred Tax Liability, Provisional Income Tax Benefit									47,000,000
Increase in carrying amount of reported unit									47,000,000
Retail/ LTC
Goodwill [Line Items]
Goodwill impairments								6,149,000,000	181,000,000
Goodwill		10,806,000,000			$ 16,632,000,000		10,807,000,000	$ 10,806,000,000	$ 16,632,000,000
Retail/ LTC \| Long-Term Care Reporting Unit
Goodwill [Line Items]
Goodwill impairments		$ 2,200,000,000	$ 0	$ 3,900,000,000
Goodwill							$ 431,000,000
Discontinued Operations, Disposed of by Sale \| RX Crossroads \| Retail/ LTC
Goodwill [Line Items]
Disposal consideration received										$ 725,000,000

Goodwill and Other Intangibles - Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2019
Other Intangible Assets[Line Items]
Indefinite-lived intangible assets, Trademarks	$ 10,498	$ 10,498
Finite-lived intangible assets, accumulated amortization	(9,038)	(7,214)
Intangible assets, gross	42,159	43,738
Intangible assets, net	$ 33,121	$ 36,524	$ 36,307
Weighted Average Life (years)	15 years 1 month 6 days	15 years 3 months 18 days
Customer contracts/relationships and covenants not to compete
Other Intangible Assets[Line Items]
Finite-lived intangible assets, gross carrying amount	$ 25,447	$ 26,213
Finite-lived intangible assets, accumulated amortization	(8,128)	(6,349)
Finite-lived intangible assets, net carrying amount	$ 17,319	$ 19,864
Weighted Average Life (years)	14 years 9 months 18 days	14 years 9 months 18 days
Technology
Other Intangible Assets[Line Items]
Finite-lived intangible assets, gross carrying amount	$ 1,060	$ 1,060
Finite-lived intangible assets, accumulated amortization	(386)	(31)
Finite-lived intangible assets, net carrying amount	$ 674	$ 1,029
Weighted Average Life (years)	3 years	3 years
Provider networks
Other Intangible Assets[Line Items]
Finite-lived intangible assets, gross carrying amount	$ 4,200	$ 4,200
Finite-lived intangible assets, accumulated amortization	(229)	(19)
Finite-lived intangible assets, net carrying amount	$ 3,971	$ 4,181
Weighted Average Life (years)	20 years	20 years
Value of Business Acquired
Other Intangible Assets[Line Items]
Finite-lived intangible assets, gross carrying amount	$ 590	$ 590
Finite-lived intangible assets, accumulated amortization	(63)	(7)
Finite-lived intangible assets, net carrying amount	$ 527	$ 583
Weighted Average Life (years)	20 years	20 years
Other
Other Intangible Assets[Line Items]
Finite-lived intangible assets, gross carrying amount	$ 364	$ 1,177
Finite-lived intangible assets, accumulated amortization	(232)	(808)
Finite-lived intangible assets, net carrying amount	$ 132	$ 369
Weighted Average Life (years)	8 years 1 month 6 days	17 years 1 month 6 days

Goodwill and Other Acquired Intangibles - Future Amortization Expense (Details) $ in Millions	Dec. 31, 2019 USD ($)
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2020	$ 2,283
2021	2,186
2022	1,816
2023	1,786
2024	$ 1,743

Leases - Narrative (Details)	3 Months Ended		12 Months Ended
Leases - Narrative (Details)	Sep. 30, 2019 USD ($) store	Mar. 31, 2019 USD ($) store	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($) store
Operating Leased Assets [Line Items]
Proceeds from sale-leaseback transactions			$ 5,000,000
Store rationalization charges			$ 231,000,000	$ 0	$ 215,000,000
Proceeds from sale-leaseback transactions				0	265,000,000
Long-term portion of lease obligations associated with facility closings				$ 269,000,000
Retail/ LTC
Operating Leased Assets [Line Items]
Number of under performing stores \| store	22	46
Store rationalization charges	$ 96,000,000	$ 135,000,000			$ 215,000,000
Number of stores closed \| store					71
Distribution centers and Corporate Offices \| Minimum
Operating Leased Assets [Line Items]
Lease term			15 years
Distribution centers and Corporate Offices \| Maximum
Operating Leased Assets [Line Items]
Lease term			25 years
Equipment \| Minimum
Operating Leased Assets [Line Items]
Lease term			3 years
Equipment \| Maximum
Operating Leased Assets [Line Items]
Lease term			10 years

Leases - Summary of the Components of Net Lease Cost (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Leases [Abstract]
Operating lease cost	$ 2,720
Finance lease cost:
Amortization of right-of-use assets	38
Interest on lease liabilities	44
Total finance lease costs	82
Short-term lease costs	24
Variable lease costs	581
Less: sublease income	50
Net lease cost	$ 3,357

Leases - Supplemental Cash Flow Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases	$ 2,701
Operating cash flows paid for interest portion of finance leases	44
Financing cash flows paid for principal portion of finance leases	26
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	1,824
Finance leases	$ 283

Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2019	Jan. 01, 2019
Operating leases:
Operating lease right-of-use assets	$ 20,860	$ 20,987
Current portion of operating lease liabilities	1,596	1,803
Long-term operating lease liabilities	18,926	$ 18,832
Total operating lease liabilities	20,522
Finance leases:
Property and equipment, gross	790
Accumulated depreciation	(38)
Property and equipment, net	752
Current portion of long-term debt	27
Long-term debt	781
Total finance lease liabilities	$ 808
Weighted average remaining lease term (in years)
Operating leases	13 years 9 months 18 days
Finance leases	20 years 6 months
Weighted average discount rate
Operating leases	4.60%
Finance leases	6.70%

Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Millions	Dec. 31, 2019 USD ($)
Finance Leases
2020	$ 84
2021	82
2022	79
2023	77
2024	76
Thereafter	1,056
Total lease payments	1,454
Less: imputed interest	(646)
Total lease liabilities	808
Operating Leases
2020	2,699
2021	2,598
2022	2,444
2023	2,335
2024	2,103
Thereafter	15,654
Total lease payments	27,833
Less: imputed interest	(7,311)
Total lease liabilities	20,522
Total
2020	2,783
2021	2,680
2022	2,523
2023	2,412
2024	2,179
Thereafter	16,710
Total lease payments	29,287
Less: imputed interest	(7,957)
Total lease liabilities	21,330
Future noncancelable subleases, future minimum payments	315
Leases, amount due in excess of remaining estimated economic life	$ 2,200

Leases - Rental Expense (Details) - USD ($) $ in Millions	12 Months Ended
Leases - Rental Expense (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Leases [Abstract]
Minimum rentals	$ 2,528	$ 2,455
Contingent rentals	28	29
Rental expense	2,556	2,484
Less: sublease income	(21)	(24)
Total rental expense, net	$ 2,535	$ 2,460

- Definition

The increases or decreases in lease payments that result from changes occurring after the inception of the lease in the factors (other than the passage of time) on which lease payments are based, except that any escalation of minimum lease payments relating to increases in construction or acquisition cost of the leased property or for increases in some measure of cost or value during the construction or preconstruction period, are excluded from contingent rentals. Contingent rentals also may include amounts for which the triggering events have not yet occurred or the specified targets for which have not yet been achieved (such as sales based percentage rent), but which events are considered probable of occurring or which specified targets are considered probable of being achieved.

+ References + Details

Leases - Property and Equipment under Capital Leases (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 28,934	$ 26,869
Accumulated depreciation and amortization	$ (16,890)	(15,520)
Property and equipment, net		11,349
Assets Held under Capital Leases
Property, Plant and Equipment [Line Items]
Total property and equipment		582
Accumulated depreciation and amortization		(163)
Property and equipment, net		$ 419

Health Care Costs Payable - Incurred and Paid Health Care Claims Development (Details) - Health Insurance Product Line - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Claims Development [Line Items]
Incurred Health Care Claims,Net of Reinsurance	$ 96,047
Cumulative Paid Health Care Claims,Net of Reinsurance	89,360
All outstanding liabilities for health care costs payable prior to 2018, net of reinsurance	56
Total outstanding liabilities for health care costs payable, net of reinsurance	6,743
2018
Claims Development [Line Items]
Incurred Health Care Claims,Net of Reinsurance	44,621	$ 44,962
Cumulative Paid Health Care Claims,Net of Reinsurance	44,373	$ 39,440
2019
Claims Development [Line Items]
Incurred Health Care Claims,Net of Reinsurance	51,426
Cumulative Paid Health Care Claims,Net of Reinsurance	$ 44,987

Health Care Costs Payable - Narrative (Details) $ in Billions	Dec. 31, 2019 USD ($)
Health Care Benefits
Liability for Claims and Claims Adjustment Expense [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	$ 5.0

Health Care Costs Payable - Reconciliation of Health Care Net Incurred and Paid Claims Development to Health Care Costs Payable Liability (Details) - Health Insurance Product Line - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Short-duration health care costs payable, net of reinsurance	$ 6,743
Reinsurance recoverables	5	$ 4	$ 0
Premium deficiency reserve	4	16
Insurance lines other than short duration	127
Total health care costs payable	$ 6,879	$ 6,147	$ 5

Health Care Costs Payable - Reconciliation of Health Care Costs Payable (Details) - USD ($) $ in Millions		12 Months Ended
	Nov. 28, 2018	Dec. 31, 2019	Dec. 31, 2018
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period		$ 6,147
Reclassification from pharmacy claims and discounts payable	$ 776
Less: Claims paid
Health care costs payable, end of period		6,879	$ 6,147
Health Care Benefits
Less: Claims paid
Amounts excluded from total incurred health care costs		41	4
Corporate/ Other
Less: Claims paid
Amounts excluded from total incurred health care costs		285	22
Health Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period		6,147	5
Less: Reinsurance recoverables		4	0
Health care costs payable, beginning of the period		6,143	5
Acquisitions, net		0	5,357
Reclassification from pharmacy claims and discounts payable		0	776
Add: Components of incurred health care costs
Current year		52,723	6,594
Prior years		(524)	(42)
Total incurred health care costs		52,199	6,552
Less: Claims paid
Current year		46,158	6,303
Prior years		5,314	260
Total claims paid		51,472	6,563
Add: Premium deficiency reserve		4	16
Health care costs payable, end of period		6,874	6,143
Add: Reinsurance recoverables		5	4
Health care costs payable, end of period		$ 6,879	$ 6,147

Borrowings and Credit Arrangements - Schedule of Debt (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Nov. 30, 2018	Dec. 31, 2018	Dec. 31, 2019	Aug. 31, 2019	Aug. 15, 2019	Jan. 01, 2019
Debt Instrument [Line Items]
Short-term debt		$ 720	$ 0
Long-term debt			68,438
Finance lease liabilities			808
Finance lease liabilities		642
Total debt principal		74,265	69,246
Debt premiums		302	262
Debt discounts and deferred financing costs		(1,138)	(1,028)
Long-term debt, short term debt, and lease obligation		73,429	68,480
Short-term debt (commercial paper)		(720)	0
Current portion of long-term debt		(1,265)	(3,781)			$ (1,267)
Long-term debt		$ 71,444	64,699
Senior Notes \| 2.2% senior notes due March 2019
Debt Instrument [Line Items]
Debt interest rate		2.20%
Long-term debt		$ 375	0
Senior Notes \| 2.25% senior notes due August 2019
Debt Instrument [Line Items]
Debt interest rate		2.25%
Long-term debt		$ 850	$ 0
Senior Notes \| 3.125% senior notes due March 2020
Debt Instrument [Line Items]
Debt interest rate			3.125%	3.125%
Long-term debt		2,000	$ 723
Senior Notes \| 2.8% senior notes due July 2020
Debt Instrument [Line Items]
Debt interest rate			2.80%
Long-term debt		2,750	$ 2,750
Senior Notes \| 3.35% senior notes due March 2021
Debt Instrument [Line Items]
Debt interest rate			3.35%	3.35%
Long-term debt		3,000	$ 2,038
Senior Notes \| 4.125% senior notes due May 2021
Debt Instrument [Line Items]
Debt interest rate			4.125%
Long-term debt		550	$ 222
Senior Notes \| 2.125% senior notes due June 2021
Debt Instrument [Line Items]
Debt interest rate			2.125%
Long-term debt		1,750	$ 1,750
Senior Notes \| 4.125% senior notes due June 2021
Debt Instrument [Line Items]
Debt interest rate			4.125%
Long-term debt		500	$ 203
Senior Notes \| 5.45% senior notes due June 2021
Debt Instrument [Line Items]
Debt interest rate			5.45%	5.45%
Long-term debt		600	$ 187
Senior Notes \| 3.5% senior notes due July 2022
Debt Instrument [Line Items]
Debt interest rate			3.50%
Long-term debt		1,500	$ 1,500
Senior Notes \| 2.75% senior notes due November 2022
Debt Instrument [Line Items]
Debt interest rate			2.75%
Long-term debt		1,000	$ 1,000
Senior Notes \| 2.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate			2.75%
Long-term debt		1,250	$ 1,250
Senior Notes \| 4.75% senior notes due December 2022
Debt Instrument [Line Items]
Debt interest rate			4.75%
Long-term debt		399	$ 399
Senior Notes \| 3.7% senior notes due March 2023
Debt Instrument [Line Items]
Debt interest rate			3.70%
Long-term debt		6,000	$ 6,000
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		1,250	$ 1,250
Senior Notes \| 2.625% senior notes due August 2024
Debt Instrument [Line Items]
Debt interest rate			2.265%		2.625%
Long-term debt		0	$ 1,000
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 \| 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 \| 4.1% senior notes due March 2025
Debt Instrument [Line Items]
Debt interest rate			4.10%
Long-term debt		5,000	$ 5,000
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%		3.00%
Long-term debt		0	$ 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 \| 4.3% senior notes due March 2028
Debt Instrument [Line Items]
Debt interest rate			4.30%
Long-term debt		9,000	$ 9,000
Senior Notes \| 3.25% senior notes due August 2029
Debt Instrument [Line Items]
Debt interest rate			3.25%		3.25%
Long-term debt		0	$ 1,750
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 \| 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
Notes Payable \| Floating rate notes due March 2020
Debt Instrument [Line Items]
Debt interest rate		3.397%	2.515%
Long-term debt		$ 1,000	$ 277
Notes Payable \| Floating rate notes due March 2021
Debt Instrument [Line Items]
Debt interest rate		3.487%	2.605%
Long-term debt		$ 1,000	$ 1,000
Notes Payable \| 3-year tranche term loan due November 2021
Debt Instrument [Line Items]
Debt instrument term	3 years	3 years
Long-term debt		$ 3,000	0
Other Debt Obligations
Debt Instrument [Line Items]
Long-term debt		$ 19	$ 279

Borrowings and Credit Arrangements - Debt Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Long-term Debt, Fiscal Year Maturity [Abstract]
2020	$ 3,754
2021	5,404
2022	4,153
2023	8,554
2024	2,704
Thereafter	43,869
Total	68,438
Finance lease liabilities	808
Total debt principal	$ 69,246	$ 74,265

Borrowings and Credit Arrangements - Short-term Borrowings (Details) - USD ($)			12 Months Ended
	Nov. 28, 2018	Oct. 26, 2018	Dec. 31, 2019	Dec. 31, 2017	Dec. 31, 2018	Mar. 09, 2018	Dec. 15, 2017	Dec. 03, 2017
Short-term Debt [Line Items]
Short-term debt			$ 0		$ 720,000,000
Federal home loan bank advances maximum amount available			850,000,000
2018 Senior Notes
Short-term Debt [Line Items]
Debt face amount						$ 40,000,000,000
Notes Payable \| 3-Year and 5-Year Term Loan
Short-term Debt [Line Items]
Maximum borrowing capacity							$ 5,000,000,000.0
Debt face amount	$ 5,000,000,000.0
Senior Notes \| 2018 Senior Notes
Short-term Debt [Line Items]
Debt face amount						40,000,000,000.0
Commercial Paper
Short-term Debt [Line Items]
Short-term debt			0		$ 720,000,000
Short-term debt, weighted average interest rate					2.80%
Line of Credit \| Back-Up Credit Facilities
Short-term Debt [Line Items]
Short-term debt			$ 0		$ 0
Commitment fee percentage			0.03%
Line of Credit \| Revolving Credit Facility, Expiring May 14, 2020
Short-term Debt [Line Items]
Maximum borrowing capacity			$ 1,000,000,000.0
Debt instrument term			364 days
Line of Credit \| Revolving Credit Facility, Expiring May 18, 2022
Short-term Debt [Line Items]
Maximum borrowing capacity			$ 1,000,000,000.0
Debt instrument term			5 years
Line of Credit \| Revolving Credit Facility, Expiring May 17, 2023
Short-term Debt [Line Items]
Maximum borrowing capacity			$ 2,000,000,000.0
Debt instrument term			5 years
Line of Credit \| Revolving Credit Facility, Expiring May 16, 2024
Short-term Debt [Line Items]
Maximum borrowing capacity			$ 2,000,000,000.0
Debt instrument term			5 years
Bridge Loan
Short-term Debt [Line Items]
Debt instrument term		364 days
Debt face amount		$ 4,000,000,000.0				4,000,000,000.0	$ 44,000,000,000.0	$ 49,000,000,000.0
Debt issuance cost capitalized						$ 8,000,000		$ 221,000,000
Amortization of debt issuance costs			$ 173,000,000	$ 56,000,000
Extinguishment of debt	$ 4,000,000,000.0
Federal Home Loan Bank Advances
Short-term Debt [Line Items]
Short-term debt			$ 0		$ 0

Borrowings and Credit Arrangements - Long-Term Borrowings (Details) - USD ($)			1 Months Ended						12 Months Ended
	Aug. 15, 2019	Mar. 09, 2018	Aug. 31, 2019	Jul. 31, 2019	May 31, 2019	Mar. 31, 2019	Dec. 31, 2018	Nov. 30, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Nov. 28, 2018	Dec. 15, 2017
Debt Instrument [Line Items]
Proceeds from debt	$ 3,500,000,000
Proceeds from derivative instruments				$ 25,000,000					$ 25,000,000	$ (446,000,000)	$ 0
Loss on net cash flow hedges				18,000,000
Premium paid in excess of debt principal			$ 76,000,000
Debt extinguishment fees			8,000,000
Gain on write off of unamortized deferred financing premiums			5,000,000
Loss on early extinguishment of debt			$ 79,000,000						79,000,000	0	$ 0
Proceeds from hedge transaction		$ 446,000,000
Gain on hedge transaction		331,000,000
Amount outstanding									$ 68,438,000,000
2018 Senior Notes
Debt Instrument [Line Items]
Debt face amount		40,000,000,000
Proceeds from debt		39,400,000,000
Senior Notes \| 2.625% senior notes due August 2024
Debt Instrument [Line Items]
Debt face amount	$ 1,000,000,000.0
Debt interest rate	2.625%								2.265%
Amount outstanding							$ 0		$ 1,000,000,000	0
Senior Notes \| 3.25% senior notes due August 2029
Debt Instrument [Line Items]
Debt face amount	$ 1,750,000,000
Debt interest rate	3.25%								3.25%
Amount outstanding							0		$ 1,750,000,000	0
Senior Notes \| 2018 Senior Notes
Debt Instrument [Line Items]
Debt face amount		40,000,000,000.0
Senior Notes \| 3.125% senior notes due March 2020
Debt Instrument [Line Items]
Debt face amount		2,000,000,000
Debt interest rate			3.125%						3.125%
Aggregate principal of debt extinguished			$ 1,300,000,000
Amount outstanding							2,000,000,000		$ 723,000,000	2,000,000,000
Senior Notes \| 3.35% senior notes due March 2021
Debt Instrument [Line Items]
Debt face amount		3,000,000,000
Debt interest rate			3.35%						3.35%
Aggregate principal of debt extinguished			$ 962,000,000
Amount outstanding							3,000,000,000		$ 2,038,000,000	3,000,000,000
Senior Notes \| Floating rate notes due March 2021
Debt Instrument [Line Items]
Debt face amount		1,000,000,000
Senior Notes \| 3.7% senior notes due March 2023
Debt Instrument [Line Items]
Debt face amount		6,000,000,000
Debt interest rate									3.70%
Amount outstanding							6,000,000,000		$ 6,000,000,000	6,000,000,000
Senior Notes \| 4.1% senior notes due March 2025
Debt Instrument [Line Items]
Debt face amount		5,000,000,000
Debt interest rate									4.10%
Amount outstanding							5,000,000,000		$ 5,000,000,000	5,000,000,000
Senior Notes \| 4.3% senior notes due March 2028
Debt Instrument [Line Items]
Debt face amount		9,000,000,000
Debt interest rate									4.30%
Amount outstanding							9,000,000,000		$ 9,000,000,000	9,000,000,000
Senior Notes \| 4.78% senior notes due March 2038
Debt Instrument [Line Items]
Debt face amount		5,000,000,000
Debt interest rate									4.78%
Amount outstanding							5,000,000,000		$ 5,000,000,000	5,000,000,000
Senior Notes \| 5.05% senior notes due March 2048
Debt Instrument [Line Items]
Debt face amount		8,000,000,000
Debt interest rate									5.05%
Amount outstanding							8,000,000,000		$ 8,000,000,000	8,000,000,000
Senior Notes \| 3% senior notes due August 2026
Debt Instrument [Line Items]
Debt face amount	$ 750,000,000
Debt interest rate	3.00%								3.00%
Amount outstanding							0		$ 750,000,000	0
Senior Notes \| Outstanding Senior Notes
Debt Instrument [Line Items]
Aggregate principal of debt extinguished			$ 4,000,000,000.0
Senior Notes \| 4.125% senior notes due 2021
Debt Instrument [Line Items]
Debt interest rate			4.125%
Aggregate principal of debt extinguished			$ 328,000,000
Senior Notes \| 4.125% senior notes issued by Aetna due 2021
Debt Instrument [Line Items]
Debt interest rate			4.125%
Aggregate principal of debt extinguished			$ 297,000,000
Senior Notes \| 5.45% senior notes due June 2021
Debt Instrument [Line Items]
Debt interest rate			5.45%						5.45%
Aggregate principal of debt extinguished			$ 413,000,000
Amount outstanding							$ 600,000,000		$ 187,000,000	$ 600,000,000
Notes Payable \| Floating rate notes due March 2020
Debt Instrument [Line Items]
Debt face amount		$ 1,000,000,000
Debt interest rate							3.397%		2.515%	3.397%
Aggregate principal of debt extinguished			$ 723,000,000
Amount outstanding							$ 1,000,000,000		$ 277,000,000	$ 1,000,000,000
Notes Payable \| Floating rate notes due March 2021
Debt Instrument [Line Items]
Debt interest rate							3.487%		2.605%	3.487%
Amount outstanding							$ 1,000,000,000		$ 1,000,000,000	$ 1,000,000,000
Notes Payable \| 3-Year and 5-Year Term Loan
Debt Instrument [Line Items]
Debt face amount												$ 5,000,000,000.0
Maximum borrowing capacity													$ 5,000,000,000.0
Notes Payable \| 3-year tranche term loan due November 2021
Debt Instrument [Line Items]
Debt face amount												3,000,000,000.0
Debt instrument term								3 years		3 years
Repayment of debt				$ 1,500,000,000	$ 1,000,000,000.0	$ 500,000,000
Amount outstanding							3,000,000,000		$ 0	$ 3,000,000,000
Notes Payable \| 5-Year tranche loan due November 2023
Debt Instrument [Line Items]
Debt face amount												2,000,000,000.0
Debt instrument term								5 years
Repayment of debt							$ 2,000,000,000.0
Aetna Inc.
Debt Instrument [Line Items]
Assumed debt												$ 8,098,000,000
Minimum \| Aetna Inc.
Debt Instrument [Line Items]
Debt interest rate												2.20%
Maximum \| Aetna Inc.
Debt Instrument [Line Items]
Debt interest rate												6.75%

Pension Plans and Other Postretirement Benefits - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, employer contributions	$ 550	$ 334	$ 314
Pre-tax settlement losses	0	0	(187)
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
Pre-tax settlement losses	0	0	(187)
Employer contributions	25	12	46
Multiemployer plans, plan contributions	18	18	17
Benefit obligation	6,239	5,841	131
Net periodic benefit cost	$ (131)	(6)	208
Pension Plan \| Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target investment allocations	33.00%
Pension Plan \| Debt securities
Defined Benefit Plan Disclosure [Line Items]
Target investment allocations	54.00%
Pension Plan \| Real Estate Investment
Defined Benefit Plan Disclosure [Line Items]
Target investment allocations	6.00%
Pension Plan \| Private equity investments
Defined Benefit Plan Disclosure [Line Items]
Target investment allocations	4.00%
Pension Plan \| Hedge Funds
Defined Benefit Plan Disclosure [Line Items]
Target investment allocations	3.00%
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Multiemployer plans, plan contributions	$ 57	58	58
Benefit obligation	246	228
Net periodic benefit cost	$ 7	$ 2	$ 1

Pension Plans and Other Postretirement Benefits - Benefit Obligations and Plan Assets (Details) - Pension Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Change in benefit obligation:
Benefit obligation, beginning of year	$ 5,841	$ 131
Acquired benefit obligations	0	5,685
Interest cost	225	25	$ 20
Actuarial loss	530	41
Benefit payments	(357)	(41)
Benefit obligation, end of year	6,239	5,841	131
Change in plan assets:
Fair value of plan assets, beginning of year	5,663	0
Fair value of plan assets acquired	0	5,709
Actual return on plan assets	1,064	(17)
Employer contributions	25	12	46
Benefit payments	(357)	(41)
Fair value of plan assets, end of year	6,395	5,663	$ 0
Funded status	156	(178)
Assets (liabilities) recognized on the consolidated balance sheet
Non-current assets reflected in other assets	494	147
Current liabilities reflected in accrued expenses	(25)	(25)
Non-current liabilities reflected in other long-term liabilities	(313)	(300)
Net assets (liabilities)	$ 156	$ (178)

Pension Plans and Other Postretirement Benefits - Net Periodic Benefit Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Settlement losses	$ 0	$ 0	$ 187
Pension Plan
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Interest cost	225	25	20
Expected return on plan assets	(357)	(33)	(20)
Amortization of net actuarial loss	1	2	21
Settlement losses	0	0	187
Net periodic benefit cost (income)	$ (131)	$ (6)	$ 208

Pension Plans and Other Postretirement Benefits - Weighted Average Assumptions Used (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assumptions used to determine benefit obligations
Discount rate	3.20%	4.30%
Assumptions used to determine net benefit costs
Discount rate	4.00%	4.00%	4.00%
Expected long-term rate of return on plan assets	6.50%	6.60%	5.00%

Pension Plans and Other Postretirement Benefits - Fair Value of Pension Plan Assets (Details) - Pension Plan - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 6,395	$ 5,663	$ 0
Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,121	1,709
Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,196	2,895
Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	354	430
Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	5,671	5,034
Cash and cash equivalents \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	92	68
Cash and cash equivalents \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	65	30
Cash and cash equivalents \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Cash and cash equivalents \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	157	98
Debt securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	592	511
Debt securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	2,844	2,610
Debt securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1	5
Debt securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,437	3,126
U.s. government securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	592	511
U.s. government securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	31	38
U.s. government securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
U.s. government securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	623	549
States, municipalities and political subdivisions \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
States, municipalities and political subdivisions \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	157	147
States, municipalities and political subdivisions \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
States, municipalities and political subdivisions \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	157	147
U.S. corporate securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
U.S. corporate securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,849	1,671
U.S. corporate securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1	5
U.S. corporate securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,850	1,676
Foreign securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Foreign securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	178	177
Foreign securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Foreign securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	178	177
Residential mortgage-backed securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Residential mortgage-backed securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	385	339
Residential mortgage-backed securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Residential mortgage-backed securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	385	339
Commercial mortgage-backed securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Commercial mortgage-backed securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	89	70
Commercial mortgage-backed securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Commercial mortgage-backed securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	89	70
Other asset-backed securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Other asset-backed securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	150	162
Other asset-backed securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Other asset-backed securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	150	162
Redeemable preferred securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Redeemable preferred securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	5	6
Redeemable preferred securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Redeemable preferred securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	5	6
Equity securities \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,437	1,130
Equity securities \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1	0
Equity securities \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Equity securities \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,438	1,130
U.S. Domestic \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	931	744
U.S. Domestic \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1	0
U.S. Domestic \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
U.S. Domestic \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	932	744
International \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	481	356
International \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
International \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
International \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	481	356
Domestic real estate \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	25	30
Domestic real estate \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Domestic real estate \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Domestic real estate \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	25	30
Other investments \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Other investments \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	286	255
Other investments \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	353	425
Other investments \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	639	680
Real estate \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Real estate \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Real estate \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	353	425
Real estate \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	353	425
Common/collective trusts \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Common/collective trusts \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	288	253
Common/collective trusts \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Common/collective trusts \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	288	253
Derivatives \| Level 1
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Derivatives \| Level 2
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	(2)	2
Derivatives \| Level 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Derivatives \| Total Fair Value, Inputs, Level 1, 2 and 3
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	(2)	2
Common/collective trusts, Equity Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		109
Common/collective trusts, Equity Securities \| Fair Value Measured at Net Asset Value Per Share
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	137
Common/collective trusts, Debt Securities
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets		144
Common/collective trusts, Debt Securities \| Fair Value Measured at Net Asset Value Per Share
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	151
Private equity investments \| Fair Value Measured at Net Asset Value Per Share
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	540	465
Hedge fund investments \| Fair Value Measured at Net Asset Value Per Share
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 184	$ 164

Pension Plans and Other Postretirement Benefits - Changes in Level 3 Pension Plan Assets (Details) - Pension Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Change in plan assets:
Fair value of plan assets, beginning of year	$ 5,663	$ 0
Actual return on plan assets	1,064	(17)
Fair value of plan assets, end of year	6,395	5,663
Level 3
Change in plan assets:
Fair value of plan assets, beginning of year	430
Actual return on plan assets	5
Purchases, sales and settlements	(82)
Transfers into (out of) Level 3	1
Fair value of plan assets, end of year	354	430
Real estate \| Level 3
Change in plan assets:
Fair value of plan assets, beginning of year	425
Actual return on plan assets	5
Purchases, sales and settlements	(77)
Transfers into (out of) Level 3	0
Fair value of plan assets, end of year	353	425
U.S. corporate securities \| Level 3
Change in plan assets:
Fair value of plan assets, beginning of year	5
Actual return on plan assets	0
Purchases, sales and settlements	(5)
Transfers into (out of) Level 3	1
Fair value of plan assets, end of year	$ 1	$ 5

Pension Plans and Other Postretirement Benefits - Defined Benefit Plans Expected Benefit (Details) $ in Millions	Dec. 31, 2019 USD ($)
Pension Plan
Defined Benefit Plan Disclosure [Line Items]
2020	$ 373
2021	415
2022	379
2023	384
2024	380
2025-2029	1,851
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
2020	15
2021	15
2022	15
2023	15
2024	15
2025-2029	$ 72

Income Taxes - Income Tax Provision (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Current:
Federal	$ 2,450	$ 1,480	$ 2,594
State	565	499	464
Total current taxes	3,015	1,979	3,058
Deferred:
Federal	(535)	22	(1,435)
State	(114)	1	14
Total deferred income taxes	(649)	23	(1,421)
Total	$ 2,366	$ 2,002	$ 1,637

Income Taxes - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Provisional benefit of revaluation of net DTL due to TCJA			$ 1,500
Benefit of revaluation of net DTL due to TCJA		$ 100
Net operating loss and capital loss carryforwards	$ 480	529
Valuation allowance	374	520
Income tax penalties and interest expense	49	19	$ 11
Income tax penalties and interest accrued	173	$ 80
Unrecognized tax benefits that would impact effective tax rate	$ 532

Income Taxes - Effective Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Statutory income tax rate	21.00%	21.00%	35.00%
State income taxes, net of federal tax benefit	4.00%	27.70%	4.10%
Effect of the Tax Cuts and Jobs Act	0	(0.071)	(0.183)
Health insurer fee	0.00%	2.20%	0.00%
Goodwill impairments	0.00%	89.50%	0.80%
Sale of subsidiary	0.00%	5.00%	0.00%
Other	1.30%	4.10%	(1.80%)
Effective income tax rate	26.30%	142.40%	19.80%

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Deferred income tax assets:
Lease and rents	$ 267	$ 277
Inventory	23	28
Employee benefits	191	243
Bad debts and other allowances	294	243
Retirement benefits	47	130
Net operating loss and capital loss carryforwards	480	529
Deferred income	36	104
Insurance reserves	430	467
Investments	0	11
Other	451	242
Valuation allowance	(374)	(520)
Total deferred income tax assets	1,845	1,754
Deferred income tax liabilities:
Investments	(289)	0
Depreciation and amortization	(8,850)	(9,431)
Total deferred income tax liabilities	(9,139)	(9,431)
Net deferred income tax liabilities	$ (7,294)	$ (7,677)

Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 661	$ 344	$ 307
Additions based on tax positions related to the current year	4	1	62
Additions based on tax positions related to prior years	115	324	32
Reductions for tax positions of prior years	(111)	(5)	(28)
Expiration of statutes of limitation	(7)	(2)	(10)
Settlements	(7)	(1)	(19)
Ending balance	$ 655	$ 661	$ 344

Stock Incentive Plans - Stock-Based Compensation Expense and ESPP (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Nov. 28, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 453	$ 280	$ 234
Shares issued employee stock purchase plan (in shares)	2,000,000
Average purchase price of shares purchased (in dollars per share)	$ 53.29
Employee Stock Options and Stock Appreciation Rights
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 76	70	65
Compensation not yet recognized, period for recognition	2 years 1 month 6 days
Compensation not yet recognized, options	$ 41
Expected to vest (in shares)	10,000,000
Restricted Stock Units and Performance Share Units
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock-based compensation expense	$ 377	210	169
Compensation not yet recognized, other than options	$ 524
Compensation not yet recognized, period for recognition	2 years 2 months 12 days
Vested in period, fair value	$ 265	262	$ 175
Stock Appreciation Rights (SARs)
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Award vesting period	3 years
Accelerated compensation cost		14
Expiration period	10 years
Restricted Stock
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Accelerated compensation cost		$ 27
Employee Stock Option
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Award vesting period	4 years
Employee Stock
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Number of shares authorized	30,000,000
Number of shares available for grant	7,000,000
Offering period	6 months
Purchase price of common stock percent	90.00%
Minimum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Award vesting period	3 years
Maximum
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Award vesting period	5 years
CVS Health 2017 Incentive Compensation Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Number of shares authorized	32,000,000
Number of shares available for grant	17,000,000
Aetna Inc 2010 Stock Incentive Plan
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Number of shares available for grant	27,000,000			32,000,000
Capital shares reserved for future issuance				22,000,000

Stock Incentive Plans - Valuation and Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.70%	1.45%	1.24%
Expected volatility	27.96%	28.02%	22.70%
Risk-free interest rate	2.27%	1.87%	0.86%
Expected life (in years)	6 months	6 months	6 months
Weighted-average grant date fair value (in dollars per share)	$ 10.51	$ 12.26	$ 13.01
Employee Stock Options and Stock Appreciation Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	3.68%	2.76%	2.56%
Expected volatility	21.76%	21.27%	18.39%
Risk-free interest rate	0.56%	2.77%	1.77%
Expected life (in years)	6 years 3 months 18 days	4 years 9 months 18 days	4 years 1 month 6 days
Weighted-average grant date fair value (in dollars per share)	$ 6.27	$ 24.55	$ 9.43

Stock Incentive Plans - Restricted Stock Activity (Details) - Restricted Stock Units and Performance Share Units shares in Thousands	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Units
Unvested at beginning of period (in shares) \| shares	11,005
Granted (in shares) \| shares	7,644
Vested (in shares) \| shares	(4,216)
Forfeited (in shares) \| shares	(1,308)
Unvested at end of period (in shares) \| shares	13,125
Weighted average grant date fair value (in dollars per share)
Unvested at beginning of year (in dollars per share) \| $ / shares	$ 76.18
Granted (in dollars per share) \| $ / shares	54.34
Vested (in dollars per share) \| $ / shares	62.59
Forfeited (in dollars per share) \| $ / shares	58.73
Unvested at end of year (in dollars per share) \| $ / shares	$ 61.57

Stock Incentive Plans - Stock Option and SAR Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash received from stock options exercised (including ESPP)	$ 210,000	$ 242,000	$ 329,000
Payments for taxes for net share settlement of equity awards	$ 112,000	97,000	71,000
Stock options granted prior to 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	7 years
Stock options granted in 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period	10 years
Employee Stock Options and Stock Appreciation Rights
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash received from stock options exercised (including ESPP)	$ 210,000	242,000	329,000
Payments for taxes for net share settlement of equity awards	112,000	97,000	71,000
Intrinsic value of stock options and SARs exercised	30,000	79,000	176,000
Fair value of stock options and SARs vested	$ 467,000	$ 324,000	$ 341,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Shares, Outstanding at beginning of year (in shares)	22,909
Shares granted (in shares)	6,538
Shares exercised (in shares)	(3,667)
Shares forfeited (in shares)	(769)
Shares expired (in shares)	(1,109)
Shares, Outstanding at end of year (in shares)	23,902	22,909
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price, outstanding at beginning of year ($ per share)	$ 71.15
Weighted average exercise price, granted ($ per share)	54.40
Weighted average exercise price, exercised ($ per share)	46.17
Weighted average exercise price, forfeited ($ per share)	68.12
Weighted average exercise price, expired ($ per share)	82.40
Weighted average exercise price, outstanding at end of year ($ per share)	$ 69.98	$ 71.15
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average contractual term, outstanding at end of year	4 years 9 months 3 days
Aggregate Intrinsic value outstanding at end of year	$ 274,987
Shares exercisable at end of year (in shares)	13,267
Weighted average exercise price exercisable at end of year ($ per share)	$ 77.48
Weighted average remaining contractual term exercisable at end of year	2 years 8 months 23 days
Aggregate intrinsic value exercisable at end of year	$ 109,765
Shares vested at end of year and expected to vest in the future (in shares)	23,328
Weighted average exercise price vested at end of year and expected to vest in the future ($ per share)	$ 70.28
Weighted average remaining contractual term vested at end of year and expected to vest in the future	4 years 8 months 1 day
Aggregate intrinsic value vested at end of year and expected to vest in the future	$ 265,128

Shareholders' Equity - Repurchases (Details) - USD ($) shares in Millions	1 Months Ended		12 Months Ended
	Apr. 30, 2017	Jan. 31, 2017	Dec. 31, 2017	Dec. 31, 2019	Aug. 31, 2016
Equity, Class of Treasury Stock [Line Items]
Stock repurchased during the period (in shares)			55.4
Stock repurchased during the period			$ 4,400,000,000
2016 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Authorized				$ 15,000,000,000.0
Remaing as of December 31, 2019				13,900,000,000
2014 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Authorized				10,000,000,000.0
Remaing as of December 31, 2019				$ 0
Accelerated share repurchases agreement amount		$ 3,600,000,000			$ 3,600,000,000
Accelerated share repurchases percent of notional amount received in shares		80.00%
Number of shares purchased (in shares)		36.1
Amount of repurchases under the program		$ 2,900,000,000
Accelerated share repurchases, maximum number of shares (in shares)	9.9
Accelerated share repurchases, percent of notional amount in shares to be received at end of program	20.00%
Foreign Exchange Forward \| 2014 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Derivative notional amount		$ 700,000,000

Shareholders' Equity - Dividends (Details) - $ / shares	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018
Equity [Abstract]
Cash dividend declared (USD per share)	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50

Shareholders' Equity - Regulatory Requirements (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Statutory Accounting Practices [Line Items]
Combined statutory net income	$ 2,800
Estimated minimum statutory surplus required by regulators	5,841
Investments on deposit with regulatory bodies	672
Estimated maximum dividend distributions permitted in 2020 without prior regulatory approval	366
Insurance and HMO
Statutory Accounting Practices [Line Items]
Combined statutory capital and surplus	11,000	$ 10,100
Dividends paid	$ 2,400

Shareholders' Equity - Noncontrolling Interests (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Equity [Abstract]
Noncontrolling interests	$ 306	$ 318

Other Comprehensive Income (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Jul. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		$ 58,543	$ 37,695	$ 36,834
Other comprehensive income (loss) before reclassifications	$ (18)
Other comprehensive income (loss)		917	274	140
End of year balance		64,170	58,543	37,695
Net unrealized investment gains (losses)
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		97	0	0
Other comprehensive income (loss) before reclassifications		763	97	0
Amounts reclassified from accumulated other comprehensive loss, net of tax		(86)	0	0
Other comprehensive income (loss)		677	97	0
End of year balance		774	97	0
OCI before Reclass, pre-tax		927	132	0
Amounts reclassified, pre-tax		(105)	1	0
Foreign currency translation adjustments
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		(158)	(129)	(127)
Other comprehensive income (loss) before reclassifications		8	(29)	(2)
Amounts reclassified from accumulated other comprehensive loss, net of tax		154	0	0
Other comprehensive income (loss)		162	(29)	(2)
End of year balance		4	(158)	(129)
Net cash flow hedges
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		312	(15)	(5)
Adoption of new accounting standard			(3)
Other comprehensive income (loss) before reclassifications		(18)	344	(11)
Amounts reclassified from accumulated other comprehensive loss, net of tax		(15)	(14)	1
Other comprehensive income (loss)		(33)	330	(10)
End of year balance		279	312	(15)
OCI before Reclass, pre-tax		(25)	465	(18)
Amounts reclassified, pre-tax		(20)	(19)	2
Amount expected to be reclassified		14
Pension and OPEB plans
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		(149)	(21)	(173)
Adoption of new accounting standard			(4)
Other comprehensive income (loss) before reclassifications		120	(132)	0
Amounts reclassified from accumulated other comprehensive loss, net of tax		(9)	8	152
Other comprehensive income (loss)		111	(124)	152
End of year balance		(38)	(149)	(21)
OCI before Reclass, pre-tax		162	(178)	0
Amounts reclassified, pre-tax		(12)	11	249
AOCI Including Portion Attributable to Noncontrolling Interest
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Beginning of year balance		102	(165)	(305)
Adoption of new accounting standard			(7)
End of year balance		$ 1,019	$ 102	$ (165)

Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Numerator for earnings (loss) per share calculation:
Income (loss) from continuing operations	$ 1,744	$ 1,529	$ 1,931	$ 1,427	$ (422)	$ 1,390	$ (2,562)	$ 998	$ 6,631	$ (596)	$ 6,631
Income allocated to participating securities									(5)	(3)	(24)
Net (income) loss attributable to noncontrolling interests									3	2	(1)
Income (loss) from continuing operations attributable to CVS Health									$ 6,629	$ (597)	$ 6,606
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic (in shares)									1,301	1,044	1,020
Effect of dilutive securities (in shares)									4	0	4
Weighted average shares, diluted (in shares)									1,305	1,044	1,024
Earnings (loss) per share from continuing operations:
Earnings (loss) per share from continuing operations, basic (USD per share)	$ 1.34	$ 1.17	$ 1.49	$ 1.09	$ (0.37)	$ 1.36	$ (2.52)	$ 0.98	$ 5.10	$ (0.57)	$ 6.48
Earnings (loss) per share from continuing operations, diluted (USD per share)	$ 1.33	$ 1.17	$ 1.49	$ 1.09	$ (0.37)	$ 1.36	$ (2.52)	$ 0.98	$ 5.08	$ (0.57)	$ 6.45
Employee Stock Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)									17	13	10
Common Equivalent Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)										3

Reinsurance - Narrative (Details) - Subsequent Event	1 Months Ended
Reinsurance - Narrative (Details) - Subsequent Event	Jan. 31, 2020 agreement
Subsequent Event [Line Items]
Number of reinsurance contracts entered into	2
Four years reinsurance agreement with unrelated insurer	4 years

Reinsurance - Reinsurance Recoverables (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	$ 4,131	$ 4,541
Hartford Life and Accident Insurance Company
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	3,085	3,470
Lincoln Life & Annuity Company of New York
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	413	424
WellCare Health Plans
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	355	0
VOYA Retirement Insurance and Annuity Company
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	175	186
All Other
Ceded Credit Risk [Line Items]
Total reinsurance recoverables	$ 103	$ 461

Reinsurance - Effects of Reinsurance (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Premiums Earned, Net [Abstract]
Direct	$ 62,968	$ 8,365
Assumed	2,108	38
Ceded	(1,954)	(219)
Net premiums	63,122	8,184	$ 3,558
Policyholder Benefits and Claims Incurred, Net [Abstract]
Direct	52,592	6,773
Assumed	1,562	32
Ceded	(1,625)	(211)
Net benefit costs	$ 52,529	$ 6,594

Commitments and Contingencies (Details) $ in Millions	1 Months Ended	7 Months Ended	12 Months Ended
Commitments and Contingencies (Details) $ in Millions	Sep. 30, 2015 store	Aug. 31, 2019 claim	Dec. 31, 2019 USD ($) person lease	Dec. 31, 2018 USD ($)
Loss Contingencies [Line Items]
Guarantor obligations, maximum exposure			$ 250
Contractual obligations underlying the guaranteed benefits			$ 1,400	$ 1,400
Number of leases guaranteed \| lease			79
Guaranty liabilities			$ 84	$ 90
Number of store locations with subpoenas for documents \| store	8
Number of class action compaints filed \| claim		6
CMS Actions
Loss Contingencies [Line Items]
Sample size of audit \| person			200

Segment Reporting - Narrative (Details) - Segment	12 Months Ended
Segment Reporting - Narrative (Details) - Segment	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Concentration Risk [Line Items]
Number of operating segments	3
Aetna Inc. \| Customer Concentration Risk \| Revenues
Concentration Risk [Line Items]
Concentration risk, percentage		9.80%	12.30%

Segment Reporting - Summarized Financial Information of Segments (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Segment Reporting Information [Line Items]
Revenues from customers									$ 255,765	$ 193,919	$ 184,765
Net investment income									1,011	660	21
Total revenues	$ 66,889	$ 64,810	$ 63,431	$ 61,646	$ 54,424	$ 47,490	$ 46,922	$ 45,743	256,776	194,579	184,786
Adjusted operating income (loss)									15,339	11,261	10,825
Depreciation and amortization									4,371	2,718	2,479
Additions to property and equipment									2,481	2,123	2,049
Corporate/ Other
Segment Reporting Information [Line Items]
Revenues from customers									100	4	0
Net investment income									412	602	16
Total revenues									512	606	16
Adjusted operating income (loss)									(1,000)	(856)	(896)
Depreciation and amortization									161	138	116
Additions to property and equipment									404	401	340
Operating Segments \| Pharmacy Services
Segment Reporting Information [Line Items]
Revenues from customers									141,491	134,736	130,822
Net investment income									0	0	0
Total revenues									141,491	134,736	130,822
Adjusted operating income (loss)									5,129	4,955	4,628
Depreciation and amortization									766	710	710
Additions to property and equipment									332	326	311
Co-payments									11,500	11,400	10,800
Operating Segments \| Retail/ LTC
Segment Reporting Information [Line Items]
Revenues from customers									86,608	83,989	79,398
Net investment income									0	0	0
Total revenues									86,608	83,989	79,398
Adjusted operating income (loss)									6,705	7,403	7,475
Depreciation and amortization									1,723	1,698	1,651
Additions to property and equipment									1,212	1,350	1,398
Operating Segments \| Health Care Benefits
Segment Reporting Information [Line Items]
Revenues from customers									69,005	8,904	3,582
Net investment income									599	58	5
Total revenues									69,604	8,962	3,587
Adjusted operating income (loss)									5,202	528	359
Depreciation and amortization									1,721	172	2
Additions to property and equipment									533	46	0
Intersegment Eliminations
Segment Reporting Information [Line Items]
Revenues from customers									(41,439)	(33,714)	(29,037)
Net investment income									0	0	0
Total revenues									(41,439)	(33,714)	(29,037)
Adjusted operating income (loss)									(697)	(769)	(741)
Depreciation and amortization									0	0	0
Additions to property and equipment									$ 0	$ 0	$ 0

Segment Reporting - Reconciliation of Operating Earnings to Net Income (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($) store	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($) store	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 09, 2018 USD ($)
Segment Reporting Information [Line Items]
Operating income (GAAP measure)	$ 3,037,000,000	$ 2,928,000,000	$ 3,332,000,000	$ 2,690,000,000	$ 824,000,000	$ 2,574,000,000	$ (1,373,000,000)	$ 1,996,000,000	$ 11,987,000,000	$ 4,021,000,000	$ 9,538,000,000
Amortization of intangible assets									2,436,000,000	1,006,000,000	817,000,000
Acquisition-related transaction and integration costs									480,000,000	492,000,000	65,000,000
Charges in connection with store rationalization									231,000,000	0	215,000,000
Loss on divestiture of subsidiary									(205,000,000)	(86,000,000)	(9,000,000)
Goodwill impairments		0							0	6,149,000,000	181,000,000
Impairment of long-lived assets									0	43,000,000	0
Interest income on financing for the Aetna Acquisition									0	(536,000,000)	0
Adjusted operating income									$ 15,339,000,000	11,261,000,000	10,825,000,000
Retail/ LTC
Segment Reporting Information [Line Items]
Charges in connection with store rationalization		$ 96,000,000		$ 135,000,000							215,000,000
Goodwill impairments										6,149,000,000	$ 181,000,000
Number of under performing stores \| store		22		46
RX Crossroads
Segment Reporting Information [Line Items]
Loss on divestiture of subsidiary										$ 725,000,000
2018 Senior Notes
Segment Reporting Information [Line Items]
Debt issued in acquisition												$ 40,000,000,000

Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 66,889	$ 64,810	$ 63,431	$ 61,646	$ 54,424	$ 47,490	$ 46,922	$ 45,743	$ 256,776	$ 194,579	$ 184,786
Operating income	3,037	2,928	3,332	2,690	824	2,574	(1,373)	1,996	11,987	4,021	9,538
Income from continuing operations	1,744	1,529	1,931	1,427	(422)	1,390	(2,562)	998	6,631	(596)	6,631
Net income attributable to CVS Health	$ 1,747	$ 1,530	$ 1,936	$ 1,421	$ (419)	$ 1,390	$ (2,563)	$ 998	$ 6,634	$ (594)	$ 6,622
Basic earnings per common share:
Income (loss) from continuing operations attributable to CVS Health (in dollars per share)	$ 1.34	$ 1.17	$ 1.49	$ 1.09	$ (0.37)	$ 1.36	$ (2.52)	$ 0.98	$ 5.10	$ (0.57)	$ 6.48
Income (loss) from discontinued operations attributable to CVS Health (in dollars per share)	0	0	0	0	0	0	0	0	0	0	(0.01)
Net income (loss) attributable to CVS Health (in dollars per share)	1.34	1.17	1.49	1.09	(0.37)	1.36	(2.52)	0.98	5.10	(0.57)	6.47
Diluted earnings per common share:
Income (loss) from continuing operations attributable to CVS Health (in dollars per share)	1.33	1.17	1.49	1.09	(0.37)	1.36	(2.52)	0.98	5.08	(0.57)	6.45
Income (loss) from discontinued operations attributable to CVS Health (in dollars per share)	0	0	0	0	0	0	0	0	0	0	(0.01)
Net income (loss) attributable to CVS Health (in dollars per share)	1.33	1.17	1.49	1.09	(0.37)	1.36	(2.52)	0.98	5.08	(0.57)	6.44
Dividends declared per share (in dollars per share)	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 0.50	$ 2.00	$ 2.00	$ 2.00

Label

Element

Value

AOCI Attributable to Parent [Member]

Cumulative Effect of New Accounting Principle in Period of Adoption