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 Choice program.

(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