Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2021

Summarized Financial Information Of Segments

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


In millions	Health Care Benefits		Pharmacy Services (1)		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended
March 31, 2021
Revenues from external customers	$	20,315	$	33,313	$	15,140	$	32	$	—	$	68,800
Intersegment revenues	20		3,008		8,088		—		(11,116)		—
Net investment income	148		—		46		103		—		297
Total revenues	20,483		36,321		23,274		135		(11,116)		69,097
Adjusted operating income (loss)	1,782		1,507		1,394		(303)		(175)		4,205

March 31, 2020
Revenues from external customers	$	19,097	$	32,118	$	15,357	$	21	$	—	$	66,593
Intersegment revenues	8		2,865		7,392		—		(10,265)		—
Net investment income	93		—		—		69		—		162
Total revenues	19,198		34,983		22,749		90		(10,265)		66,755
Adjusted operating income (loss)	1,491		1,181		1,902		(285)		(176)		4,113

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $3.4 billion of retail co-payments in each of the three-month periods ended March 31, 2021 and 2020.

Reconciliation of Operating Earnings to Net Income

The following are reconciliations of consolidated operating income to adjusted operating income for the three months ended March 31, 2021 and 2020:


	Three Months Ended March 31,
In millions	2021		2020
Operating income (GAAP measure)	$	3,577	$	3,458
Amortization of intangible assets (1)	587		586
Acquisition-related integration costs (2)	41		69


Adjusted operating income	$	4,205	$	4,113

_____________________________________________

(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 unaudited GAAP condensed consolidated statements of operations in operating expenses within each segment. Although intangible assets contribute to the Company’s revenue generation, the amortization of intangible assets does not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Additionally, intangible asset amortization expense typically fluctuates based on the size and timing of the Company’s acquisition activity. Accordingly, the Company believes excluding the amortization of intangible assets enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends. Intangible asset amortization excluded from the related non-GAAP financial measure represents the entire amount recorded within the Company’s GAAP financial statements, and the revenue generated by the associated intangible assets has not been excluded from the related non-GAAP financial measure. Intangible asset amortization is excluded from the related non-GAAP financial measure because the amortization, unlike the related revenue, is not affected by operations of any particular period unless an intangible asset becomes impaired or the estimated useful life of an intangible asset is revised.

(2)During the three months ended March 31, 2021 and 2020, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the Company’s unaudited GAAP condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.