Segment Reporting (Tables)

9 Months Ended

Sep. 30, 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 (2)		Consolidated Totals
Three Months Ended
September 30, 2021
Revenues from external customers	$	20,311	$	36,851	$	16,347	$	39	$	—	$	73,548
Intersegment revenues	21		2,195		8,678		—		(10,894)		—
Net investment income (loss)	147		—		(33)		132		—		246
Total revenues	20,479		39,046		24,992		171		(10,894)		73,794
Adjusted operating income (loss)	1,106		1,773		1,723		(343)		(186)		4,073

September 30, 2020
Revenues from external customers	$	18,557	$	33,492	$	14,770	$	33	$	—	$	66,852
Intersegment revenues	20		2,219		7,955		—		(10,194)		—
Net investment income	121		—		—		83		—		204
Total revenues	18,698		35,711		22,725		116		(10,194)		67,056
Adjusted operating income (loss)	1,080		1,619		1,412		(303)		(186)		3,622

Nine Months Ended
September 30, 2021
Revenues from external customers	$	60,993	$	105,909	$	47,672	$	101	$	—	$	214,675
Intersegment revenues	62		7,772		25,309		—		(33,143)		—
Net investment income	432		—		13		387		—		832
Total revenues	61,487		113,681		72,994		488		(33,143)		215,507
Adjusted operating income (loss)	4,502		5,035		5,166		(1,015)		(523)		13,165

September 30, 2020
Revenues from external customers	$	55,972	$	98,233	$	44,314	$	83	$	—	$	198,602
Intersegment revenues	51		7,350		22,822		—		(30,223)		—
Net investment income	341		—		—		209		—		550
Total revenues	56,364		105,583		67,136		292		(30,223)		199,152
Adjusted operating income (loss)	6,035		4,127		4,371		(931)		(539)		13,063

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(1)Total revenues of the Pharmacy Services segment include approximately $2.8 billion and $2.5 billion of retail co-payments for the three months ended September 30, 2021 and 2020, respectively, and $9.0 billion and $8.5 billion of retail co-payments for the nine months ended September 30, 2021 and 2020, respectively.

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

Reconciliation of Operating Earnings to Net Income

The following are reconciliations of consolidated operating income to adjusted operating income for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2021		2020		2021		2020
Operating income (GAAP measure)	$	3,061	$	3,249	$	10,964	$	11,387
Amortization of intangible assets (1)	561		587		1,730		1,751
Acquisition-related integration costs (2)	20		57		101		196
Goodwill impairment (3)	431		—		431		—
Acquisition purchase price adjustment outside of measurement period (4)	—		—		(61)		—
Gain on divestiture of subsidiary (5)	—		(271)		—		(271)

Adjusted operating income	$	4,073	$	3,622	$	13,165	$	13,063

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(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 and nine months ended September 30, 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.

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

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

(5)During the three and nine months ended September 30, 2020, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of the Workers’ Compensation business, which the Company sold on July 31, 2020 for approximately $850 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited GAAP condensed consolidated statements of operations within the Health Care Benefits segment.