XML 36 R17.htm IDEA: XBRL DOCUMENT v2.4.0.8
Segment Reporting (Notes)
 9 Months Ended
Sep. 30, 2014
Segment Reporting [Abstract]  
Segment Reporting
Segment Reporting
 
The Company has three reportable segments: Pharmacy Services, Retail Pharmacy and Corporate. The Company’s segments maintain separate financial information for which operating results are evaluated on a regular basis by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company evaluates its Pharmacy Services and Retail Pharmacy segments’ performance based on net revenue, gross profit and operating profit before the effect of nonrecurring charges and gains and certain intersegment activities. The Company evaluates the performance of its Corporate Segment based on operating expenses before the effect of nonrecurring charges and gains and certain intersegment activities.
 
The Pharmacy Services Segment provides a full range of pharmacy benefit management (“PBM”) services including mail service dispensing pharmacies, specialty pharmacy and infusion services, plan design and administration, formulary management, discounted drug purchase arrangements, Medicare Part D services, retail pharmacy network management services, prescription management systems, clinical services, disease management services and medical pharmacy management services. The Company’s customers are primarily employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans and individuals throughout the United States. Through the Company’s SilverScript Insurance Company subsidiary, the Company is a national provider of drug benefits to eligible beneficiaries under the Federal Government’s Medicare Part D program. The Pharmacy Services business operates under the Caremark®, CarePlus CVS/pharmacy®, CVS/caremarkTM, CVS/specialtyTM, RxAmerica®, Accordant®, SilverScript®, Novologix® and Coram® names. As of September 30, 2014, the Pharmacy Services Segment operated 26 retail specialty pharmacy stores, 11 specialty mail order pharmacies, four mail service dispensing pharmacies, and 84 branches and six centers of excellence for infusion and enteral services located in 40 states, Puerto Rico and the District of Columbia.
 
The Retail Pharmacy Segment sells prescription drugs and a wide assortment of general merchandise, including over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards and convenience foods through the Company’s CVS/pharmacy®, CVS®, Longs Drugs®, Navarro Discount Pharmacy® and Drogaria Onofre® retail stores and online through CVS.com®, Navarro.com and Onofre.com.br. As of September 30, 2014, the Retail Pharmacy Segment included 7,779 retail drugstores (of which 7,714 operated a pharmacy), 17 onsite pharmacies, 936 retail medical clinics, and the online retail websites, CVS.com, Navarro.com and Onofre.com.br. The retail drugstores are located in 44 states, the District of Columbia, Puerto Rico and Brazil. The retail medical clinics operate under the MinuteClinic® name, and 928 are located within CVS/pharmacy stores. MinuteClinics utilize nationally-recognized medical protocols to diagnose and treat minor health conditions, perform health screenings, monitor chronic conditions and deliver vaccinations. The clinics are staffed by board-certified nurse practitioners and physician assistants who provide access to affordable care without appointment.
 
The Corporate Segment provides management and administrative services to support the Company. The Corporate Segment consists of certain aspects of executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance departments.
In millions
Pharmacy
Services
Segment(1)
 
Retail
Pharmacy
Segment
 
Corporate
Segment
 
Intersegment
Eliminations(2)
 
Consolidated
Totals
Three Months Ended
 
 
 
 
 
 
 
 
 
September 30, 2014:
 
 
 
 
 
 
 
 
 
Net revenues
$
22,534

 
$
16,749

 
$
—

 
$
(4,262
)
 
$
35,021

Gross profit
1,403

 
5,237

 
—

 
(172
)
 
6,468

Operating profit (loss)
1,087

 
1,527

 
(196
)
 
(172
)
 
2,246

September 30, 2013:
 

 
 

 
 

 
 

 
 

Net revenues
19,483

 
16,248

 
—

 
(3,799
)
 
31,932

Gross profit
1,294

 
4,876

 
—

 
(143
)
 
6,027

Operating profit (loss)(3)
1,012

 
1,464

 
(179
)
 
(143
)
 
2,154

Nine Months Ended
 

 
 

 
 

 
 

 
 

September 30, 2014:
 

 
 

 
 

 
 

 
 

Net revenues
64,566

 
50,100

 
—

 
(12,354
)
 
102,312

Gross profit
3,533

 
15,719

 
—

 
(518
)
 
18,734

Operating profit (loss)
2,605

 
4,982

 
(591
)
 
(518
)
 
6,478

September 30, 2013:
 

 
 

 
 

 
 

 
 

Net revenues
56,593

 
48,426

 
—

 
(11,088
)
 
93,931

Gross profit
3,025

 
14,828

 
—

 
(409
)
 
17,444

Operating profit (loss)(3)
2,186

 
4,596

 
(553
)
 
(409
)
 
5,820

Total assets:
 

 
 

 
 

 
 

 
 

September 30, 2014
42,527

 
31,197

 
1,344

 
(1,492
)
 
73,576

December 31, 2013
38,343

 
30,191

 
4,420

 
(1,428
)
 
71,526

Goodwill:
 

 
 

 
 

 
 

 
 

September 30, 2014
21,234

 
6,917

 
—

 
—

 
28,151

December 31, 2013
19,658

 
6,884

 
—

 
—

 
26,542


(1)          Net revenues of the Pharmacy Services Segment include approximately $1.9 billion of retail co-payments for both the three months ended September 30, 2014 and 2013, as well as $6.1 billion of retail co-payments for both the nine months ended September 30, 2014 and 2013.
(2)        Intersegment eliminations relate to two types of transactions: (i) Intersegment revenues that occur when Pharmacy Services Segment customers use Retail Pharmacy Segment stores to purchase covered products. When this occurs, both the Pharmacy Services and Retail Pharmacy segments record the revenue on a stand-alone basis, and (ii) Intersegment revenues, gross profit and operating profit that occur when Pharmacy Services Segment customers, through the Company’s intersegment activities (such as the Maintenance Choice® program), elect to pick-up their maintenance prescriptions at Retail Pharmacy Segment stores instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail Pharmacy segments record the revenue, gross profit and operating profit on a standalone basis. The following amounts are eliminated in consolidation in connection with the intersegment activity described in item (ii) above: net revenues of $1.2 billion and $1.1 billion for the three months ended September 30, 2014 and 2013, respectively, and $3.6 billion and $3.1 billion for the nine months ended September 30, 2014 and 2013, respectively; and gross profit and operating profit of $172 million and $143 million for the three months ended September 30, 2014 and 2013, respectively, and $518 million and $409 million for the nine months ended September 30, 2014 and 2013, respectively.
(3)
Consolidated operating profit for the three and nine months ended September 30, 2013 includes a $72 million gain on a legal settlement, of which, $11 million is included in the Pharmacy Services Segment and $61 million is included in the Retail Pharmacy Segment.