10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to_________

Commission File Number: 001-01011

CVS HEALTH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	05-0494040
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

	One CVS Drive,	Woonsocket,	Rhode Island	02895
(Address of principal executive offices)				(Zip Code)
Registrant’s telephone number, including area code:				(401)	765-1500
Former name, former address and former fiscal year, if changed since last report:				N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CVS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of April 27, 2022, the registrant had 1,311,309,074 shares of common stock issued and outstanding.

TABLE OF CONTENTS
		Page
Part I	Financial Information
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	51
Part II	Other Information
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signatures		54

Part I.Financial Information

Item 1.Financial Statements

Index to Condensed Consolidated Financial Statements

	Page
Condensed Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2022 and 2021	2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2022 and 2021	3
Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2022 and December 31, 2021	4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2022 and 2021	5
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended March 31, 2022 and 2021	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Report of Independent Registered Public Accounting Firm	33

1

CVS Health Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
In millions, except per share amounts	2022		2021
Revenues:
Products	$	52,522	$	47,387
Premiums	21,631		18,960
Services	2,505		2,453
Net investment income	168		297
Total revenues	76,826		69,097
Operating costs:
Cost of products sold	45,509		40,894
Benefit costs	17,951		15,704
Operating expenses	9,876		8,922
Total operating costs	73,336		65,520
Operating income	3,490		3,577
Interest expense	586		657
Other income	(42)		(50)
Income before income tax provision	2,946		2,970
Income tax provision	633		746
Net income	2,313		2,224
Net income attributable to noncontrolling interests	(1)		(1)
Net income attributable to CVS Health	$	2,312	$	2,223
Net income per share attributable to CVS Health:
Basic	$	1.76	$	1.69
Diluted	$	1.74	$	1.68
Weighted average shares outstanding:
Basic	1,312		1,313
Diluted	1,328		1,322
Dividends declared per share	$	0.55	$	0.50

See accompanying notes to condensed consolidated financial statements (unaudited).

2

CVS Health Corporation

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended March 31,
In millions	2022		2021
Net income	$	2,313	$	2,224
Other comprehensive loss, net of tax:
Net unrealized investment losses	(1,155)		(386)
Foreign currency translation adjustments	3		(2)
Net cash flow hedges	(3)		(4)
Other comprehensive loss	(1,155)		(392)
Comprehensive income	1,158		1,832
Comprehensive income attributable to noncontrolling interests	(1)		(1)
Comprehensive income attributable to CVS Health	$	1,157	$	1,831

See accompanying notes to condensed consolidated financial statements (unaudited).

3

CVS Health Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

In millions, except per share amounts	March 31, 2022		December 31, 2021
Assets:
Cash and cash equivalents	$	8,442	$	9,408
Investments	2,900		3,117
Accounts receivable, net	26,451		24,431
Inventories	18,160		17,760
Other current assets	5,530		5,292
Total current assets	61,483		60,008
Long-term investments	22,595		23,025
Property and equipment, net	12,844		12,896
Operating lease right-of-use assets	18,801		19,122
Goodwill	79,060		79,121
Intangible assets, net	28,543		29,026
Separate accounts assets	4,670		5,087
Other assets	4,877		4,714
Total assets	$	232,873	$	232,999
Liabilities:
Accounts payable	$	12,738	$	12,544
Pharmacy claims and discounts payable	18,572		17,330
Health care costs payable	10,260		8,808
Policyholders’ funds	4,138		4,301
Accrued expenses	16,619		17,670
Other insurance liabilities	1,387		1,303
Current portion of operating lease liabilities	1,849		1,646
Current portion of long-term debt	4,217		4,205
Total current liabilities	69,780		67,807
Long-term operating lease liabilities	17,786		18,177
Long-term debt	52,063		51,971
Deferred income taxes	5,829		6,270
Separate accounts liabilities	4,670		5,087
Other long-term insurance liabilities	6,363		6,402
Other long-term liabilities	2,242		1,904
Total liabilities	158,733		157,618
Shareholders’ equity:
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding	—		—
Common stock, par value $0.01: 3,200 shares authorized; 1,747 shares issued and 1,306 shares outstanding at March 31, 2022 and 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and capital surplus	47,677		47,377
Treasury stock, at cost: 441 shares at March 31, 2022 and 422 shares at December 31, 2021	(30,145)		(28,173)
Retained earnings	56,488		54,906
Accumulated other comprehensive income (loss)	(190)		965
Total CVS Health shareholders’ equity	73,830		75,075
Noncontrolling interests	310		306
Total shareholders’ equity	74,140		75,381
Total liabilities and shareholders’ equity	$	232,873	$	232,999

See accompanying notes to condensed consolidated financial statements (unaudited).

4

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
In millions	2022		2021
Cash flows from operating activities:
Cash receipts from customers	$	74,192	$	66,487
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(44,365)		(39,171)
Insurance benefits paid	(16,616)		(15,456)
Cash paid to other suppliers and employees	(8,969)		(8,270)
Interest and investment income received	199		222
Interest paid	(782)		(876)
Income taxes paid	(96)		(44)
Net cash provided by operating activities	3,563		2,892
Cash flows from investing activities:
Proceeds from sales and maturities of investments	2,570		2,177
Purchases of investments	(3,474)		(3,131)
Purchases of property and equipment	(1,051)		(829)
Acquisitions (net of cash acquired)	(7)		(84)
Other	(31)		—
Net cash used in investing activities	(1,993)		(1,867)
Cash flows from financing activities:
Net borrowings of short-term debt	—		252
Repayments of long-term debt	(14)		(3,049)
Repurchase of common stock	(2,000)		—
Dividends paid	(722)		(656)
Proceeds from exercise of stock options	297		212
Payments for taxes related to net share settlement of equity awards	(62)		(3)
Other	(149)		59
Net cash used in financing activities	(2,650)		(3,185)
Net decrease in cash, cash equivalents and restricted cash	(1,080)		(2,160)
Cash, cash equivalents and restricted cash at the beginning of the period	12,691		11,043
Cash, cash equivalents and restricted cash at the end of the period	$	11,611	$	8,883

5

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
In millions	2022		2021
Reconciliation of net income to net cash provided by operating activities:
Net income	$	2,313	$	2,224
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,055		1,126
Stock-based compensation	89		87
Deferred income taxes and other noncash items	(187)		(166)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(1,967)		(2,093)
Inventories	(400)		879
Other assets	(352)		(286)
Accounts payable and pharmacy claims and discounts payable	1,974		576
Health care costs payable and other insurance liabilities	1,478		294
Other liabilities	(440)		251
Net cash provided by operating activities	$	3,563	$	2,892

See accompanying notes to condensed consolidated financial statements (unaudited).

6

CVS Health Corporation

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

			Attributable to CVS Health
	Number of shares outstanding		Common Stock and Capital Surplus (2)		Treasury Stock (1)		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total CVS Health Shareholders’  Equity		Noncontrolling Interests		Total Shareholders’ Equity
	Common Shares	Treasury Shares (1)
In millions
Balance at December 31, 2021	1,744	(422)	$	47,377	$	(28,173)	$	54,906	$	965	$	75,075	$	306	$	75,381
Net income	—	—	—		—		2,312		—		2,312		1		2,313
Other comprehensive loss (Note 6)	—	—	—		—		—		(1,155)		(1,155)		—		(1,155)
Stock option activity, stock awards and other	3	—	300		—		—		—		300		—		300
Purchase of treasury shares, net of ESPP issuances	—	(19)	—		(1,972)		—		—		(1,972)		—		(1,972)
Common stock dividends	—	—	—		—		(730)		—		(730)		—		(730)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		3		3
Balance at March 31, 2022	1,747	(441)	$	47,677	$	(30,145)	$	56,488	$	(190)	$	73,830	$	310	$	74,140
Balance at December 31, 2020	1,733	(423)	$	46,513	$	(28,178)	$	49,640	$	1,414	$	69,389	$	312	$	69,701
Net income	—	—	—		—		2,223		—		2,223		1		2,224
Other comprehensive loss (Note 6)	—	—	—		—		—		(392)		(392)		—		(392)
Stock option activity, stock awards and other	2	—	214		—		—		—		214		—		214
ESPP issuances, net of purchase of treasury shares	—	1	—		76		—		—		76		—		76
Common stock dividends	—	—	—		—		(660)		—		(660)		—		(660)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		1		1
Balance at March 31, 2021	1,735	(422)	$	46,727	$	(28,102)	$	51,203	$	1,022	$	70,850	$	314	$	71,164

_____________________________________________

(1)Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of March 31, 2022 and 2021 and December 31, 2021 and 2020.

(2)Common stock and capital surplus includes the par value of common stock of $17 million as of March 31, 2022 and 2021 and December 31, 2021 and 2020.

See accompanying notes to condensed consolidated financial statements (unaudited).

7

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Significant Accounting Policies

Description of Business 

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health” or the “Company”), has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 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.

The coronavirus disease 2019 (“COVID-19”) and its emerging new variants continue to impact the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q.

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

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. 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 and health information technology products and services. The Health Care Benefits 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.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers.

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 and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. 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 Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. 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 health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of March 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

8

Corporate/Other Segment

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

•Management and administrative expenses to support the Company’s overall operations, 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 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 unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

The unaudited condensed 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.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

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

9

Restricted Cash

Restricted cash (included in other current assets) on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash (included in other assets) on the unaudited condensed 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 and money market funds.

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	March 31, 2022		December 31, 2021		March 31, 2021
Cash and cash equivalents	$	8,442	$	9,408	$	5,598
Restricted cash (included in other current assets)	2,913		3,065		2,972
Restricted cash (included in other assets)	256		218		313
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	11,611	$	12,691	$	8,883

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following:

In millions	March 31, 2022		December 31, 2021
Trade receivables	$	8,728	$	7,932
Vendor and manufacturer receivables	11,685		10,573
Premium receivables	3,508		2,537
Other receivables	2,530		3,389
Total accounts receivable, net	$	26,451	$	24,431

The Company’s allowance for credit losses was $324 million and $339 million as of March 31, 2022 and December 31, 2021, respectively. When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

10

Revenue Recognition

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source in each segment for the three months ended March 31, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended March 31, 2022
Major goods/services lines:
Pharmacy	$	—	$	39,198	$	19,532	$	—	$	(11,240)	$	47,490
Front Store	—		—		5,313		—		—		5,313
Premiums	21,614		—		—		17		—		21,631
Net investment income (loss)	89		—		(16)		95		—		168
Other	1,406		263		589		14		(48)		2,224
Total	$	23,109	$	39,461	$	25,418	$	126	$	(11,288)	$	76,826
Pharmacy Services distribution channel:
Pharmacy network (1)			$	22,824
Mail choice (2)			16,374
Other			263
Total			$	39,461
Three Months Ended March 31, 2021
Major goods/services lines:
Pharmacy	$	—	$	36,141	$	17,885	$	—	$	(11,074)	$	42,952
Front Store	—		—		4,642		—		—		4,642
Premiums	18,942		—		—		18		—		18,960
Net investment income	148		—		46		103		—		297
Other	1,393		180		701		14		(42)		2,246
Total	$	20,483	$	36,321	$	23,274	$	135	$	(11,116)	$	69,097
Pharmacy Services distribution channel:
Pharmacy network (1)			$	21,893
Mail choice (2)			14,248
Other			180
Total			$	36,321

_____________________________________________

(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.

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 ExtraBucks® Rewards 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.

11

The following table provides information about receivables and contract liabilities from contracts with customers:

In millions	March 31, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,728	$	7,932
Contract liabilities (included in accrued expenses)	80		87

During the three months ended March 31, 2022 and 2021, 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:

	Three Months Ended March 31,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	80		93
Redemption and breakage	(87)		(84)
Contract liabilities, end of the period	$	80	$	80

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 $15 million and $9 million in the three months ended March 31, 2022 and 2021, 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, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $21 million and $18 million for pharmaceutical inventory purchases during the three months ended March 31, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

Planned Divestiture of Thailand Health Care Business

In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), which is included in the Commercial Business reporting unit within the Health Care Benefits segment. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and, accordingly, the Company recorded a $41 million loss on assets held for sale within the Health Care Benefits segment during the three months ended March 31, 2022. The sale is expected to close in the second quarter of 2022.

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 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. 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

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periods within those fiscal years, beginning after December 15, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

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2.Investments

Total investments at March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,826	$	19,672	$	22,498	$	3,009	$	20,231	$	23,240
Mortgage loans	114		804		918		58		844		902
Other investments	33		2,119		2,152		50		1,950		2,000
Total investments (1)	$	2,973	$	22,595	$	25,568	$	3,117	$	23,025	$	26,142

_____________________________________________

(1)Includes current investments of $73 million which have been accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

Debt Securities

Debt securities available for sale at March 31, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Debt securities:
U.S. government securities	$	2,333	$	—	$	2,333	$	21	$	(68)	$	2,286
States, municipalities and political subdivisions	2,526		—		2,526		37		(65)		2,498
U.S. corporate securities	10,005		—		10,005		261		(322)		9,944
Foreign securities	3,049		(42)		3,007		87		(95)		2,999
Residential mortgage-backed securities	910		—		910		5		(48)		867
Commercial mortgage-backed securities	1,284		—		1,284		8		(67)		1,225
Other asset-backed securities	2,706		—		2,706		8		(61)		2,653
Redeemable preferred securities	25		—		25		1		—		26
Total debt securities (1)	$	22,838	$	(42)	$	22,796	$	428	$	(726)	$	22,498
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At March 31, 2022, debt securities with a fair value of $775 million, gross unrealized capital gains of $38 million and gross unrealized capital losses of $13 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. At March 31, 2022, the Company had debt securities with an allowance for credit losses of $4 million supporting experience-rated products. At December 31, 2021, the Company did not have any debt securities with an allowance for credit losses supporting experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

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The net amortized cost and fair value of debt securities at March 31, 2022 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	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,228	$	1,235
One year through five years	7,165		7,038
After five years through ten years	5,128		4,965
Greater than ten years	4,375		4,515
Residential mortgage-backed securities	910		867
Commercial mortgage-backed securities	1,284		1,225
Other asset-backed securities	2,706		2,653
Total	$	22,796	$	22,498

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Summarized below are the debt securities the Company held at March 31, 2022 and December 31, 2021 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
March 31, 2022
Debt securities:
U.S. government securities	389	$	1,468	$	65	11	$	49	$	3	400	$	1,517	$	68
States, municipalities and political subdivisions	728	1,159		61		23	44		4		751	1,203		65
U.S. corporate securities	3,907	4,992		278		339	484		44		4,246	5,476		322
Foreign securities	868	1,325		72		114	159		23		982	1,484		95
Residential mortgage-backed securities	239	606		40		26	80		8		265	686		48
Commercial mortgage-backed securities	326	701		50		55	130		17		381	831		67
Other asset-backed securities	1,261	2,246		57		69	97		4		1,330	2,343		61
Redeemable preferred securities	3	4		—		1	3		—		4	7		—
Total debt securities	7,721	$	12,501	$	623	638	$	1,046	$	103	8,359	$	13,547	$	726
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The Company reviewed the securities in the table 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. Unrealized capital losses at March 31, 2022 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of March 31, 2022, 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.

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The maturity dates for debt securities in an unrealized capital loss position at March 31, 2022 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	$	2	$	—	$	199	$	1	$	201	$	1
One year through five years	27		1		4,405		193		4,432		194
After five years through ten years	83		6		3,338		217		3,421		223
Greater than ten years	56		4		1,577		128		1,633		132
Residential mortgage-backed securities	4		—		682		48		686		48
Commercial mortgage-backed securities	6		1		825		66		831		67
Other asset-backed securities	14		1		2,329		60		2,343		61
Total	$	192	$	13	$	13,355	$	713	$	13,547	$	726

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three months ended March 31, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended March 31,
In millions	2022		2021
New mortgage loans	$	59	$	47
Mortgage loans fully repaid	35		90
Mortgage loans foreclosed	—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, 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.

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Based on the Company’s assessments at March 31, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
March 31, 2022
1	$	—	$	—	$	—	$	—	$	—	$	26	$	26
2 to 4	58		255		48		25		66		427		879
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	58	$	255	$	48	$	25	$	69	$	463	$	918
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Net Investment Income

Sources of net investment income for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Debt securities	$	164	$	157
Mortgage loans	11		15
Other investments	77		86
Gross investment income	252		258
Investment expenses	(9)		(8)
Net investment income (excluding net realized capital gains or losses)	243		250
Net realized capital gains (losses) (1)	(75)		47
Net investment income (2)	$	168	$	297

_____________________________________________

(1)Net realized capital losses include credit-related and yield-related impairment losses on debt securities of $38 million and $18 million, respectively, in the three months ended March 31, 2022. Net realized capital gains are net of yield-related impairment losses on debt securities of $30 million in the three months ended March 31, 2021. There were no credit-related losses on debt securities in the three months ended March 31, 2021.

(2)Net investment income includes $9 million in each of the three-month periods ended March 31, 2022 and 2021 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 for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Proceeds from sales	$	1,911	$	1,348
Gross realized capital gains	14		22
Gross realized capital losses	35		9

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3.Fair Value

The preparation of the Company’s unaudited condensed 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. The Company’s assets and liabilities carried at fair value have been 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.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value” in the 2021 Form 10-K.

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There were no financial liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 or December 31, 2021. Financial assets measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
March 31, 2022
Cash and cash equivalents (1)	$	4,601	$	3,872	$	—	$	8,473
Debt securities:
U.S. government securities	2,243		43		—		2,286
States, municipalities and political subdivisions	—		2,498		—		2,498
U.S. corporate securities	—		9,912		32		9,944
Foreign securities	—		2,991		8		2,999
Residential mortgage-backed securities	—		867		—		867
Commercial mortgage-backed securities	—		1,225		—		1,225
Other asset-backed securities	—		2,623		30		2,653
Redeemable preferred securities	—		26		—		26
Total debt securities	2,243		20,185		70		22,498
Equity securities	149		—		60		209
Total	$	6,993	$	24,057	$	130	$	31,180
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

_____________________________________________

(1)Includes cash and cash equivalents of $31 million which were accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

During the three months ended March 31, 2022 there were $3 million of transfers out of Level 3. During the three months ended March 31, 2021, there were no transfers into or out of Level 3.

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The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at March 31, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Mortgage loans	$	918	$	—	$	—	$	892	$	892
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	334		—		—		336		336
Long-term debt	56,280		58,624		—		—		58,624
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

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. Separate Accounts financial assets as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	3	$	193	$	—	$	196	$	2	$	186	$	—	$	188
Debt securities	1,095		2,793		—		3,888		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		500		—		500		—		547		—		547
Total (1)	$	1,098	$	3,487	$	—	$	4,585	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $85 million and $70 million of other receivables at March 31, 2022 and December 31, 2021, respectively.

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4.Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	18,536		16,291
Prior years	(676)		(652)
Total incurred health care costs (1)	17,860		15,639
Less: Claims paid
Current year	10,225		9,538
Prior years	6,183		5,767
Total claims paid	16,408		15,305
Add: Premium deficiency reserve	13		7
Other (2)	(13)		—
Health care costs payable, end of the period, net	10,252		8,267
Add: Reinsurance recoverables	8		5
Health care costs payable, end of the period	$	10,260	$	8,272

_____________________________________________

(1)Total incurred health care costs for the three months ended March 31, 2022 and 2021 in the table above exclude (i) $13 million and $7 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $19 million and $13 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $59 million and $45 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

(2)As a result of the planned divestiture of the Thailand business, the net assets associated with this business were accounted for as assets held for sale and the associated health care costs payable balance is included in accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022.

The Company’s estimates of prior years’ health care costs payable decreased by $676 million and $652 million, respectively, in the three months ended March 31, 2022 and 2021, 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.

At March 31, 2022, the Company’s liabilities for the ultimate cost of (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 (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. The majority of the Company’s liabilities for IBNR plus expected development on reported claims at March 31, 2022 related to the current year.

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5.Shareholders’ Equity

Share Repurchases

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of March 31, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 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 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the three months ended March 31, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the three months ended March 31, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Dividends

The quarterly cash dividend declared by the Board was $0.55 and $0.50 per share in the three months ended March 31, 2022 and 2021, respectively. CVS Health Corporation 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.

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6.Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	778	$	1,214
Other comprehensive loss before reclassifications ($(1,405) and $(487) pretax)	(1,230)		(400)
Amounts reclassified from accumulated other comprehensive income ($77 and $17 pretax) (1)	75		14
Other comprehensive loss	(1,155)		(386)
End of period balance	(377)		828
Foreign currency translation adjustments:
Beginning of period balance	—		7
Other comprehensive income (loss) before reclassifications	3		(2)
Other comprehensive income (loss)	3		(2)
End of period balance	3		5
Net cash flow hedges:
Beginning of period balance	222		248
Amounts reclassified from accumulated other comprehensive income ($(4) and $(5) pretax) (2)	(3)		(4)
Other comprehensive loss	(3)		(4)
End of period balance	219		244
Pension and other postretirement benefits:
Beginning of period balance	(35)		(55)
Other comprehensive income	—		—
End of period balance	(35)		(55)
Total beginning of period accumulated other comprehensive income	965		1,414
Total other comprehensive loss	(1,155)		(392)
Total end of period accumulated other comprehensive income (loss)	$	(190)	$	1,022

_____________________________________________

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

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

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7.Earnings Per Share

Earnings per share is computed using the treasury stock method. Stock options and stock appreciation rights to purchase 2 million and 10 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2022 and 2021, respectively, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

The following is a reconciliation of basic and diluted earnings per share for the respective periods:

	Three Months Ended March 31,
In millions, except per share amounts	2022		2021
Numerator for earnings per share calculation:
Net income attributable to CVS Health	$	2,312	$	2,223
Denominator for earnings per share calculation:
Weighted average shares, basic	1,312		1,313
Restricted stock units and performance stock units	10		6
Stock options and stock appreciation rights	6		3
Weighted average shares, diluted	1,328		1,322
Earnings per share:
Basic	$	1.76	$	1.69
Diluted	$	1.74	$	1.68

8.Commitments and Contingencies

COVID-19

The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company.

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, and any significant adverse impact of COVID-19 on such purchasers and/or former subsidiaries increases the risk that the Company will be required to satisfy those obligations. As of March 31, 2022, the Company guaranteed 68 such store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the unaudited condensed consolidated balance sheets), 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

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insurance guaranty associations in which the Company participates that operate under these laws respond to insolvencies of long-term care insurers and life 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 Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

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 insurance 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, and the risk is heightened by any significant adverse impact of the COVID-19 pandemic on the solvency of other insurers, including long-term care and life insurers. 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.

Litigation and Regulatory Proceedings

The Company has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by the U.S. Centers for Medicare & Medicaid Services (“CMS”), state insurance and health and welfare departments, the U.S. Department of Justice (the “DOJ”), state attorneys general, the U.S. Drug Enforcement Administration (the “DEA”) and other governmental authorities.

Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, and governmental special investigations, audits and reviews can be expensive and disruptive. Some of the litigation matters may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. The Company also may be named from time to time in qui tam actions initiated by private third parties that could also be separately pursued by a governmental body. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome.

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. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s financial position. Substantial unanticipated verdicts, fines and rulings, however, do sometimes occur, which could result in judgments against the Company, entry into settlements or a revision to its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions including possible suspension or loss of licensure and/or exclusion from

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participating in government programs. The outcome of such governmental investigations of proceedings could be material to the Company.

Usual and Customary Pricing Litigation

The Company and certain current and former directors and officers are named as a defendant in a number of lawsuits that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions are brought by a number of different types of plaintiffs, including plan members, private payors, government payors, and shareholders based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. 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.

The Company is facing multiple lawsuits, including by a State Attorney General, governmental subdivisions and several putative class actions, regarding drug pricing and its rebate arrangements with drug manufacturers. These complaints, brought by a number of different types of plaintiffs under a variety of legal theories, generally allege that rebate agreements between the drug manufacturers and PBMs caused inflated prices for certain drug products. The Company is defending itself against these claims. The Company has also received subpoenas, civil investigative demands (“CIDs”) and other requests for documents and information from, and is being investigated by, Attorneys General of several states and the District of Columbia regarding its PBM practices, including pricing and rebates. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information.

United States ex rel. Behnke v. CVS Caremark Corporation, et al. (U.S. District Court for the Eastern District of Pennsylvania). In April 2018, the Court unsealed a complaint filed in February 2014. The government has declined to intervene in this case. The relator alleges that the Company submitted, or caused to be submitted, to Part D of the Medicare program Prescription Drug Event data and/or Direct and Indirect Remuneration reports that misrepresented true prices paid by the Company’s PBM to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered by the Company’s PBM. The Company is defending itself against these claims.

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 prescription 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 U.S. jurisdictions. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information. In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; the remedy pursuant to that verdict has not been determined and the Company plans to appeal.

In March 2022, CVS Health Corporation and CVS Pharmacy, Inc. entered into a pending settlement agreement with the State of Florida to resolve claims related to opioid medications dating back more than a decade. Under the terms of the settlement agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, which is to be paid over a period of 18 years. During the three months ended March 31, 2022, the Company recorded a $484 million liability associated with this pending legal settlement.

In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to prescription opioids and other controlled substances at CVS pharmacy locations concerning potential

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violations of the federal Controlled Substances Act and the federal False Claims Act. In January 2022, the DOJ served the Company with a CID regarding similar subjects. The Company is providing documents and information in response to these matters.

Prescription Processing 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 prescription processing practices, including the following:

U.S. ex rel. Bassan 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 a complaint-in-intervention in this previously sealed qui tam case. The complaint alleges 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.

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 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 out-of-network services and/or otherwise allege that the Company failed to timely or appropriately pay or administer out-of-network 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 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 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 the U.S. Department of Health and Human Services

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(“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 or otherwise, including audits of the Company’s minimum medical loss ratio rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, cash flows and/or financial condition.

Medicare and Medicaid 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.

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.

Stockholder Matters

Beginning in February 2019, multiple class action complaints, as well as a derivative complaint, were filed by putative plaintiffs against the Company and certain current and former officers and directors. 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. The Company and its current and former officers and directors are defending themselves against these claims. Since filing, several of the cases have been consolidated, and the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), was dismissed with prejudice in February 2021. Plaintiffs have appealed that decision to the First Circuit after their motion for reconsideration was denied. In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford) and In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich) have been stayed pending the outcome of the First Circuit appeal.

In August and September 2020, two class actions under the Employee Retirement Income Security Act of 1974 (“ERISA”) were filed in the U.S. District Court for the District of Connecticut against CVS Health, Aetna Inc. (“Aetna”), and several current and former executives, directors and/or members of Aetna’s Compensation and Talent Management Committee: Radcliffe v. Aetna Inc., et al. and Flaim v. Aetna Inc., et al. The plaintiffs in these cases assert a variety of causes of action premised on allegations that the defendants breached fiduciary duties and engaged in prohibited transactions relating to participants in the Aetna 401(k) Plan’s investment in company stock between December 3, 2017 and February 20, 2019, claiming losses related to the performance of the Company’s LTC business unit. The district court consolidated the actions, and in October 2021, dismissed the consolidated action without prejudice. Plaintiffs filed an amended consolidated complaint, which the Company has moved to dismiss. The Company also received a related document request pursuant to ERISA § 104(b), to which the Company has responded. The Company and its current and former officers and directors are defending themselves against these claims.

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In December 2021, the Company received a demand for inspection of books and records pursuant to Delaware Corporation Law Section 220 (the “Demand”). The Demand purports to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids.

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. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, breach of fiduciary duty, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, denial of or 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 solutions 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.

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9.Segment Reporting

The Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s chief operating decision maker (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, which 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. See the reconciliations of consolidated operating income (GAAP measure) to consolidated 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.

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
March 31, 2022
Revenues from external customers	$	22,997	$	36,196	$	17,434	$	31	$	—	$	76,658
Intersegment revenues	23		3,265		8,000		—		(11,288)		—
Net investment income (loss)	89		—		(16)		95		—		168
Total revenues	23,109		39,461		25,418		126		(11,288)		76,826
Adjusted operating income (loss)	1,751		1,636		1,605		(305)		(204)		4,483
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

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $3.8 billion and $3.4 billion of retail co-payments for the three months ended March 31, 2022 and 2021, 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.

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The following are reconciliations of consolidated operating income to adjusted operating income for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Operating income (GAAP measure)	$	3,490	$	3,577
Amortization of intangible assets (1)	468		587
Legal settlement accrual (2)	484		—
Loss on assets held for sale (3)	41		—
Acquisition-related integration costs (4)	—		41
Adjusted operating income	$	4,483	$	4,205

_____________________________________________

(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 unaudited 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, 2022, the legal settlement accrual relates to the pending agreement with the State of Florida, entered into in March 2022, to resolve claims dating back more than a decade related to opioid medications. Under this agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, inclusive of certain legal fees, to be paid over a period of 18 years. The legal settlement accrual is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

(3)During the three months ended March 31, 2022, the loss on assets held for sale relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which is included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded. The sale is expected to close in the second quarter of 2022. The loss on assets held for sale is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Health Care Benefits segment.

(4)During the three months ended March 31, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

10.Subsequent Event

On April 2, 2022, the Company reached an agreement to sell its Payflex® business, which is reported within the Health Care Benefits segment. Payflex provides services to employers, their employees, and their former employees in the areas of tax-advantaged account reimbursement administration (flexible spending, health reimbursement, health savings, transit and parking), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration and special-member billing administration.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of CVS Health Corporation

Results of Review of Interim Financial Statements

We have reviewed the accompanying condensed consolidated balance sheet of CVS Health Corporation (the Company) as of March 31, 2022, the related condensed consolidated statements of operations and comprehensive income for the three-month periods ended March 31, 2022 and 2021, the related condensed consolidated statements of shareholders’ equity for the three-month periods ended March 31, 2022 and 2021, the related condensed consolidated statements of cash flows for the three-month periods ended March 31, 2022 and 2021, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2021, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 9, 2022, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2021, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ Ernst & Young LLP

Boston, Massachusetts

May 4, 2022

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Overview of Business

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a diversified health solutions company united around a common purpose of helping people on their path to better health. In an increasingly connected and digital world, we are meeting people wherever they are and changing health care to meet their needs. The Company has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 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.

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

Overview of the Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. 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, and health information technology products and services. The Health Care Benefits 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.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers.

Overview of the 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 and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. 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 Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. 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.

Overview of the Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, coronavirus disease 2019 (“COVID-19”) and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of March 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

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Overview of the Corporate/Other Segment

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

•Management and administrative expenses to support the Company’s overall operations, 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 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.

Overview of Current Trends

We also face trends and uncertainties specific to our reportable segments, certain of which are summarized below and also discussed in the review of our segment results. For the remainder of the year, the Company believes you should consider the following important information:

•The Health Care Benefits segment is expected to continue to benefit from Medicare and Commercial membership growth, partially offset by membership declines in its Medicaid products. The projected MBR is expected to decrease compared to 2021, reflecting pricing and a reduction in COVID-19 related medical costs. While the Company still expects a net negative impact from COVID-19 in 2022 within the Health Care Benefits segment, including the impact of the assumption that a fourth COVID-19 booster will be administered to adults aged 50 and older and to certain immunocompromised individuals as per the guidelines set forth by the CDC, the expectation is the impact will be less adverse than what was experienced in 2021.

•The Pharmacy Services segment is expected to continue to benefit from the Company’s ability to drive further improvements in purchasing economics and continued growth in specialty pharmacy, partially offset by continued client price improvements and regulation of pharmacy pricing.

•The Retail/LTC segment is expected to continue to benefit from increased prescription volume and improved generic drug purchasing, partially offset by continued pharmacy reimbursement pressure and incremental operating expenses associated with the Company’s minimum wage investment. The Company expects that COVID-19 vaccinations, including the impact of the assumption of a fourth COVID-19 booster as described above, and diagnostic testing will continue in 2022, albeit at lower levels than those experienced during 2021. The Company expects to see continued strength in front store sales, including sales of over-the-counter (“OTC”) test kits, in 2022. The extent of COVID-19 vaccinations, diagnostic testing and OTC test kit sales will be dependent upon various factors including vaccine hesitancy, the emergence of new variants, government testing initiatives and the availability and administration of pediatric and booster vaccinations.

•The Company is expected to benefit from the continuation of its enterprise-wide cost savings initiatives, which aim to reduce the Company’s operating cost structure in a way that improves the consumer experience and is sustainable. Key drivers include:

•Investments in digital, technology and analytics capabilities that will streamline processes and improve outcomes,

•Implementing workforce and workplace strategies, and

•Deploying vendor and procurement strategies.

•The Company expects changes to its business environment to continue as elected and other government officials at the national and state levels continue to propose and enact significant modifications to public policy and existing laws and regulations that govern or impact the Company’s businesses.

•The COVID-19 pandemic continues to impact the economies of the U.S. and other countries around the world. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic, as well as the pandemic’s impact on the U.S. and global economies, global supply chain, consumer behavior, and health care utilization patterns. In addition, as described in the “Government Regulation” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”), federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 and emerging new variants may not effectively combat the severity and/or duration of the COVID-19 pandemic, and have resulted in a myriad of impacts on the Company’s businesses. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material.

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The Company’s current expectations described above are forward-looking statements. Please see the “Cautionary Statement Concerning Forward-Looking Statements” in this Form 10-Q for information regarding important factors that may cause the Company’s actual results to differ from those currently projected and/or otherwise materially affect the Company.

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Operating Results

The following discussion explains the material changes in the Company’s operating results for the three months ended March 31, 2022 and 2021, and the significant developments affecting the Company’s financial condition since December 31, 2021. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the 2021 Form 10-K.

Summary of Consolidated Financial Results

	Three Months Ended March 31,				Change
In millions	2022		2021		$		%
Revenues:
Products	$	52,522	$	47,387	$	5,135	10.8	%
Premiums	21,631		18,960		2,671		14.1	%
Services	2,505		2,453		52		2.1	%
Net investment income	168		297		(129)		(43.4)	%
Total revenues	76,826		69,097		7,729		11.2	%
Operating costs:
Cost of products sold	45,509		40,894		4,615		11.3	%
Benefit costs	17,951		15,704		2,247		14.3	%
Operating expenses	9,876		8,922		954		10.7	%
Total operating costs	73,336		65,520		7,816		11.9	%
Operating income	3,490		3,577		(87)		(2.4)	%
Interest expense	586		657		(71)		(10.8)	%
Other income	(42)		(50)		8		16.0	%
Income before income tax provision	2,946		2,970		(24)		(0.8)	%
Income tax provision	633		746		(113)		(15.1)	%
Income from continuing operations	2,313		2,224		89		4.0	%
Net income	2,313		2,224		89		4.0	%
Net income attributable to noncontrolling interests	(1)		(1)		—		—	%
Net income attributable to CVS Health	$	2,312	$	2,223	$	89	4.0	%

Commentary - Three Months Ended March 31, 2022 vs. 2021

Revenues

•Total revenues increased $7.7 billion, or 11.2%, in the three months ended March 31, 2022 compared to the prior year driven by growth across all segments.

•Please see “Segment Analysis” later in this report for additional information about the revenues of the Company’s segments.

Operating expenses

•Operating expenses increased $954 million, or 10.7%, in the three months ended March 31, 2022 compared to the prior year. The increase in operating expenses was primarily due to the establishment of a $484 million pretax ($370 million after-tax) legal settlement accrual related to the pending agreement with the State of Florida to settle all opioid claims against the Company and incremental costs associated with growth in the business.

•Operating expenses as a percentage of total revenues remained consistent at 12.9% in each of the three-month periods ended March 31, 2022 and 2021.

•Please see “Segment Analysis” later in this report for additional information about the operating expenses of the Company’s segments.

Operating income

•Operating income decreased $87 million, or 2.4%, in the three months ended March 31, 2022 compared to the prior year primarily due to the Company’s pending agreement with the State of Florida described above. This decrease was partially offset by increased prescription and front store volume, including the sale of COVID-19 over-the-counter (“OTC”) test

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kits, and the impact of COVID-19 vaccinations in the Retail/LTC segment, improved purchasing economics and growth in specialty pharmacy in the Pharmacy Services segment and a decrease in amortization of intangible assets compared to prior year.

•Please see “Segment Analysis” later in this report for additional information about the operating results of the Company’s segments.

Interest expense

•Interest expense decreased $71 million, or 10.8%, in the three months ended March 31, 2022 compared to the prior year due to lower debt in the three months ended March 31, 2022. See “Liquidity and Capital Resources” later in this report for additional information.

Income tax provision

•The effective income tax rate was 21.5% for the three months ended March 31, 2022 compared to 25.1% for the three months ended March 31, 2021. The decrease in the effective income tax rate was primarily due to the impact of certain discrete tax items concluded in the first quarter of 2022.

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Segment Analysis

The following discussion of segment operating results is presented based on the Company’s reportable segments in accordance with the accounting guidance for segment reporting and is consistent with the segment disclosure in Note 9 ‘‘Segment Reporting’’ to the unaudited condensed consolidated financial statements.

The Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s chief operating decision maker (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, which 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. See the reconciliations of 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.

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
March 31, 2022
Total revenues	$	23,109	$	39,461	$	25,418	$	126	$	(11,288)	$	76,826
Adjusted operating income (loss)	1,751		1,636		1,605		(305)		(204)		4,483
March 31, 2021
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

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $3.8 billion and $3.4 billion of retail co-payments for the three months ended March 31, 2022 and 2021, 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.

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The following are reconciliations of consolidated operating income (GAAP measure) to consolidated adjusted operating income, as well as reconciliations of segment GAAP operating income to segment adjusted operating income:

	Three Months Ended March 31, 2022
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	1,409	$	1,592	$	1,483	$	(790)	$	(204)	$	3,490
Amortization of intangible assets (1)	301		44		122		1		—		468
Legal settlement accrual (2)	—		—		—		484		—		484
Loss on assets held for sale (3)	41		—		—		—		—		41
Adjusted operating income (loss)	$	1,751	$	1,636	$	1,605	$	(305)	$	(204)	$	4,483

	Three Months Ended March 31, 2021
In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Operating income (loss) (GAAP measure)	$	1,380	$	1,452	$	1,265	$	(345)	$	(175)	$	3,577
Amortization of intangible assets (1)	402		55		129		1		—		587
Acquisition-related integration costs (4)	—		—		—		41		—		41
Adjusted operating income (loss)	$	1,782	$	1,507	$	1,394	$	(303)	$	(175)	$	4,205

_____________________________________________

(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 unaudited 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, 2022, the legal settlement accrual relates to the pending agreement with the State of Florida, entered into in March 2022, to resolve claims dating back more than a decade related to opioid medications. Under this agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, inclusive of certain legal fees, to be paid over a period of 18 years. The legal settlement accrual is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

(3)During the three months ended March 31, 2022, the loss on assets held for sale relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), which is included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded. The sale is expected to close in the second quarter of 2022. The loss on assets held for sale is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Health Care Benefits segment.

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

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Health Care Benefits Segment

The following table summarizes the Health Care Benefits segment’s performance for the respective periods:

	Three Months Ended March 31,						Change
In millions, except percentages and basis points (“bps”)	2022			2021			$			%
Revenues:
Premiums	$	21,614		$	18,942		$	2,672		14.1	%
Services	1,406			1,393			13			0.9	%
Net investment income	89			148			(59)			(39.9)	%
Total revenues	23,109			20,483			2,626			12.8	%
Benefit costs	18,049			15,757			2,292			14.5	%
MBR	83.5		%	83.2		%	30		bps
Operating expenses	$	3,651		$	3,346		$	305		9.1	%
Operating expenses as a % of total revenues	15.8		%	16.3		%
Operating income	$	1,409		$	1,380		$	29		2.1	%
Operating income as a % of total revenues	6.1		%	6.7		%
Adjusted operating income (1)	$	1,751		$	1,782		$	(31)		(1.7)	%
Adjusted operating income as a % of total revenues	7.6		%	8.7		%
Premium revenues (by business):
Government	$	16,195		$	13,917		$	2,278		16.4	%
Commercial	5,419			5,025			394			7.8	%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Health Care Benefits segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

Commentary - Three Months Ended March 31, 2022 vs. 2021

Revenues

•Total revenues increased $2.6 billion, or 12.8%, to $23.1 billion in the three months ended March 31, 2022 compared to the prior year driven by growth across all product lines.

Medical Benefit Ratio (“MBR”)

•Medical benefit ratio is calculated as benefit costs divided by premium revenues and represents the percentage of premium revenues spent on medical benefits for the Company’s Insured members. Management uses MBR to assess the underlying business performance and underwriting of its insurance products, understand variances between actual results and expected results and identify trends in period-over-period results. MBR provides management and investors with information useful in assessing the operating results of the Company’s Insured Health Care Benefits products.

•The MBR increased slightly to 83.5% in the three months ended March 31, 2022 compared to 83.2% in the prior year reflective of the continued progression towards normalized total medical costs.

Operating expenses

•Operating expenses in the Health Care Benefits segment include selling, general and administrative expenses and depreciation and amortization expenses.

•Operating expenses increased $305 million, or 9.1%, in the three months ended March 31, 2022 compared to the prior year. The increase in operating expenses was primarily due to incremental operating expenses to support the growth in the business described above.

•Operating expenses as a percentage of total revenues decreased to 15.8% in the three months ended March 31, 2022 compared to 16.3% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income decreased slightly in the three months ended March 31, 2022 compared to the prior year primarily driven by net realized capital losses and the continued progression towards normalized total medical costs, largely offset by membership growth across all product lines.

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The following table summarizes the Health Care Benefits segment’s medical membership for the respective periods:

	March 31, 2022			December 31, 2021			March 31, 2021
In thousands	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total
Medical membership:
Commercial	3,285	13,924	17,209	3,258	13,530	16,788	3,201	13,584	16,785
Medicare Advantage	3,169	—	3,169	2,971	—	2,971	2,874	—	2,874
Medicare Supplement	1,292	—	1,292	1,285	—	1,285	1,146	—	1,146
Medicaid	2,375	477	2,852	2,333	471	2,804	2,184	637	2,821
Total medical membership	10,121	14,401	24,522	9,847	14,001	23,848	9,405	14,221	23,626
Supplemental membership information:
Medicare Prescription Drug Plan (standalone)			6,022			5,777			5,694

Medical Membership

•Medical membership represents the number of members covered by the Company’s Insured and ASC medical products and related services at a specified point in time. Management uses this metric to understand variances between actual medical membership and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of medical membership on segment total revenues and operating results.

•Medical membership as of March 31, 2022 of 24.5 million increased 674,000 members compared with December 31, 2021, reflecting increases across all product lines.

Medicare Update

On April 4, 2022, the U.S. Centers for Medicare & Medicaid Services issued its final notice detailing final 2023 Medicare Advantage benchmark payment rates. Final 2023 Medicare Advantage rates resulted in an increase in industry benchmark rates of approximately 5.0%.

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Pharmacy Services Segment

The following table summarizes the Pharmacy Services segment’s performance for the respective periods:

	Three Months Ended March 31,						Change
In millions, except percentages	2022			2021			$		%
Revenues:
Products	$	39,164		$	36,067		$	3,097	8.6	%
Services	297			254			43		16.9	%
Total revenues	39,461			36,321			3,140		8.6	%
Cost of products sold	37,490			34,523			2,967		8.6	%
Operating expenses	379			346			33		9.5	%
Operating expenses as a % of total revenues	1.0		%	1.0		%
Operating income	$	1,592		$	1,452		$	140	9.6	%
Operating income as a % of total revenues	4.0		%	4.0		%
Adjusted operating income (1)	$	1,636		$	1,507		$	129	8.6	%
Adjusted operating income as a % of total revenues	4.1		%	4.1		%
Revenues (by distribution channel):
Pharmacy network (2)	$	22,824		$	21,893		$	931	4.3	%
Mail choice (3)	16,374			14,248			2,126		14.9	%
Other	263			180			83		46.1	%
Pharmacy claims processed: (4)
Total	567.0			535.9			31.1		5.8	%
Pharmacy network (2)	484.3			455.4			28.9		6.3	%
Mail choice (3)	82.7			80.5			2.2		2.7	%
Generic dispensing rate: (4)
Total	87.7		%	88.1		%
Pharmacy network (2)	88.1		%	88.5		%
Mail choice (3)	85.6		%	85.7		%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Pharmacy Services segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

(2)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.

(3)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.

(4)Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

Commentary - Three Months Ended March 31, 2022 vs. 2021

Revenues

•Total revenues increased $3.1 billion, or 8.6%, to $39.5 billion in the three months ended March 31, 2022 compared to the prior year primarily driven by increased pharmacy claims volume, growth in specialty pharmacy and brand inflation, partially offset by continued client price improvements.

Operating expenses

•Operating expenses in the Pharmacy Services segment include selling, general and administrative expenses; depreciation and amortization expense; and expenses related to specialty retail pharmacies, which include administrative payroll, employee benefits and occupancy costs.

•Operating expenses as a percentage of total revenues remained consistent at 1.0% in each of the three-month periods ended March 31, 2022 and 2021.

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Adjusted operating income

•Adjusted operating income increased $129 million, or 8.6%, in the three months ended March 31, 2022 compared to the prior year. The increase in adjusted operating income was primarily driven by improved purchasing economics, including increased contributions from the products and services of the Company’s group purchasing organization, and specialty pharmacy. These increases were partially offset by continued client price improvements.

•As you review the Pharmacy Services segment’s performance in this area, you should consider the following important information about the business:

•The Company’s efforts to (i) retain existing clients, (ii) obtain new business and (iii) maintain or improve the rebates, fees and/or discounts the Company receives from manufacturers, wholesalers and retail pharmacies continue to have an impact on adjusted operating income. In particular, competitive pressures in the PBM industry have caused the Company and other PBMs to continue to share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers. In addition, marketplace dynamics and regulatory changes have limited the Company’s ability to offer plan sponsors pricing that includes retail network “differential” or “spread,” and the Company expects these trends to continue. The “differential” or “spread” is any difference between the drug price charged to plan sponsors, including Medicare Part D plan sponsors, by a PBM and the price paid for the drug by the PBM to the dispensing provider.

Pharmacy claims processed

•Total pharmacy claims processed represents the number of prescription claims processed through our pharmacy benefits manager and dispensed by either our retail network pharmacies or our own mail and specialty pharmacies. Management uses this metric to understand variances between actual claims processed and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of pharmacy claim volume on segment total revenues and operating results.

•The Company’s pharmacy network claims processed on a 30-day equivalent basis increased 6.3% in the three months ended March 31, 2022 compared to the prior year primarily driven by net new business, increased utilization and the impact of a weaker cough, cold and flu season experienced in the prior year.

•The Company’s mail choice claims processed on a 30-day equivalent basis increased 2.7% in the three months ended March 31, 2022 compared to the prior year primarily driven by net new business and the continued adoption of Maintenance Choice offerings.

•Excluding the impact of COVID-19 vaccinations, total pharmacy claims processed increased 5.5% on a 30-day equivalent basis for the three months ended March 31, 2022 compared to the prior year.

Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Pharmacy Services segment’s generic drug prescriptions processed or filled by its total prescriptions processed or filled. Management uses this metric to evaluate the effectiveness of the business at encouraging the use of generic drugs when they are available and clinically appropriate, which aids in decreasing costs for client members and retail customers. This metric provides management and investors with information useful in understanding trends in segment total revenues and operating results.

•The Pharmacy Services segment’s total generic dispensing rate decreased to 87.7% in the three months ended March 31, 2022 compared to 88.1% in the prior year. The decrease in the segment’s generic dispensing rate was primarily driven by an increase in brand prescriptions, largely attributable to increased COVID-19 vaccinations in the three months ended March 31, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 88.8% and 88.9% in the three months ended March 31, 2022 and 2021, respectively.

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Retail/LTC Segment

The following table summarizes the Retail/LTC segment’s performance for the respective periods:

	Three Months Ended March 31,						Change
In millions, except percentages	2022			2021			$		%
Revenues:
Products	$	24,605		$	22,394		$	2,211	9.9	%
Services	829			834			(5)		(0.6)	%
Net investment income (loss)	(16)			46			(62)		(134.8)	%
Total revenues	25,418			23,274			2,144		9.2	%
Cost of products sold	18,765			17,042			1,723		10.1	%
Operating expenses	5,170			4,967			203		4.1	%
Operating expenses as a % of total revenues	20.3		%	21.3		%
Operating income	$	1,483		$	1,265		$	218	17.2	%
Operating income as a % of total revenues	5.8		%	5.4		%
Adjusted operating income (1)	$	1,605		$	1,394		$	211	15.1	%
Adjusted operating income as a % of total revenues	6.3		%	6.0		%
Revenues (by major goods/service lines):
Pharmacy	$	19,532		$	17,885		$	1,647	9.2	%
Front Store	5,313			4,642			671		14.5	%
Other	589			701			(112)		(16.0)	%
Net investment income (loss)	(16)			46			(62)		(134.8)	%
Prescriptions filled (2)	394.6			375.4			19.2		5.1	%
Same store sales increase (decrease): (3)
Total	10.7		%	0.4		%
Pharmacy	10.1		%	4.1		%
Front Store	13.2		%	(11.4)		%
Prescription volume (2)	6.1		%	1.0		%
Generic dispensing rate (2)	87.5		%	87.4		%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Retail/LTC segment operating income (GAAP measure) to adjusted operating income, which represents the Company’s principal measure of segment performance.

(2)Includes an adjustment to convert 90-day prescriptions to the equivalent of three 30-day prescriptions. This adjustment reflects the fact that these prescriptions include approximately three times the amount of product days supplied compared to a normal prescription.

(3)Same store sales and prescription volume represent the change in revenues and prescriptions filled in the Company’s retail pharmacy stores that have been operating for greater than one year, expressed as a percentage that indicates the increase or decrease relative to the comparable prior period. Same store metrics exclude revenues from MinuteClinic, revenues and prescriptions from LTC operations. Management uses these metrics to evaluate the performance of existing stores on a comparable basis and to inform future decisions regarding existing stores and new locations. Same-store metrics provide management and investors with information useful in understanding the portion of current revenues and prescriptions resulting from organic growth in existing locations versus the portion resulting from opening new stores.

Commentary - Three Months Ended March 31, 2022 vs. 2021

Revenues

•Total revenues increased $2.1 billion, or 9.2%, to $25.4 billion in the three months ended March 31, 2022 compared to the prior year primarily driven by increased prescription and front store volume, including the sale of COVID-19 OTC test kits and the impact of a weaker cough, cold and flu season experienced in the prior year, as well as pharmacy brand inflation. These increases were partially offset by the impact of recent generic introductions, continued pharmacy reimbursement pressure and decreased COVID-19 diagnostic testing.

•Pharmacy same store sales increased 10.1% in the three months ended March 31, 2022 compared to the prior year. The increase was primarily driven by the 6.1% increase in pharmacy same store prescription volume on a 30-day equivalent basis and pharmacy brand inflation. These increases were partially offset by the impact of recent generic introductions and continued pharmacy reimbursement pressure.

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•Front store same store sales increased 13.2% in the three months ended March 31, 2022 compared to the prior year. The increase was primarily due to strength in consumer health, including the sale of COVID-19 OTC test kits and the impact of a weaker cough, cold and flu season experienced in the prior year, in the three months ended March 31, 2022.

•Other revenues decreased $112 million in the three months ended March 31, 2022 compared to the prior year. The decrease was primarily due to decreased COVID-19 diagnostic testing in the three months ended March 31, 2022 compared to the prior year.

Operating expenses

•Operating expenses in the Retail/LTC segment include store payroll, store employee benefits, store occupancy costs, selling expenses, advertising expenses, depreciation and amortization expense and certain administrative expenses.

•Operating expenses increased $203 million, or 4.1%, in the three months ended March 31, 2022 compared to the prior year. The increase was primarily due to incremental costs associated with increased volume, as well as increased investments in the segment’s operations and capabilities.

•Operating expenses as a percentage of total revenues decreased to 20.3% in the three months ended March 31, 2022 compared to 21.3% in the prior year. The decrease in operating expenses as a percentage of total revenues was primarily driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income increased $211 million, or 15.1% in the three months ended March 31, 2022 compared to the prior year. The increase in adjusted operating income was primarily driven by the increased prescription and front store volume described above, the impact of COVID-19 vaccinations and improved generic drug purchasing. These increases were partially offset by continued pharmacy reimbursement pressure, increased investments in the segment’s operations and capabilities and decreased COVID-19 diagnostic testing.

•As you review the Retail/LTC segment’s performance in this area, you should consider the following important information about the business:

•The segment’s adjusted operating income has been adversely affected by the efforts of managed care organizations, PBMs and governmental and other third-party payors to reduce their prescription drug costs, including the use of restrictive networks, as well as changes in the mix of business within the pharmacy portion of the Retail/LTC segment. If the pharmacy reimbursement pressure accelerates, the segment may not be able grow revenues, and its adjusted operating income could be adversely affected.

•The increased use of generic drugs has positively impacted the segment’s adjusted operating income but has resulted in third-party payors augmenting their efforts to reduce reimbursement payments to retail pharmacies for prescriptions. This trend, which the Company expects to continue, reduces the benefit the segment realizes from brand to generic drug conversions.

Prescriptions filled

•Prescriptions filled represents the number of prescriptions dispensed through the Retail/LTC segment’s pharmacies. Management uses this metric to understand variances between actual prescriptions dispensed and expected amounts as well as trends in period-over-period results. This metric provides management and investors with information useful in understanding the impact of prescription volume on segment total revenues and operating results.

•Prescriptions filled increased 5.1% on a 30-day equivalent basis in the three months ended March 31, 2022 compared to the prior year primarily driven by increased utilization and the impact of a weaker cough, cold and flu season experienced in the prior year. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 5.6% on a 30-day equivalent basis for the three months ended March 31, 2022 compared to the prior year.

Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Retail/LTC segment’s generic drug prescriptions filled by its total prescriptions filled. Management uses this metric to evaluate the effectiveness of the business at encouraging the use of generic drugs when they are available and clinically appropriate, which aids in decreasing costs for client members and retail customers. This metric provides management and investors with information useful in understanding trends in segment total revenues and operating results.

•The Retail/LTC segment’s generic dispensing rate increased to 87.5% in the three months ended March 31, 2022 compared to 87.4% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in brand prescriptions, largely attributable to decreased COVID-19 vaccinations in the three months ended March 31, 2022 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 89.9% and 89.5% in the three months ended March 31, 2022 and 2021, respectively.

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Corporate/Other Segment

The following table summarizes the Corporate/Other segment’s performance for the respective periods:

	Three Months Ended March 31,				Change
In millions, except percentages	2022		2021		$		%
Revenues:
Premiums	$	17	$	18	$	(1)	(5.6)	%
Services	14		14		—		—	%
Net investment income	95		103		(8)		(7.8)	%
Total revenues	126		135		(9)		(6.7)	%
Cost of products sold	10		8		2		25.0	%
Benefit costs	59		45		14		31.1	%
Operating expenses	847		427		420		98.4	%
Operating loss	(790)		(345)		(445)		(129.0)	%
Adjusted operating loss (1)	(305)		(303)		(2)		(0.7)	%

_____________________________________________

(1)See “Segment Analysis” above in this report for a reconciliation of Corporate/Other segment operating loss (GAAP measure) to adjusted operating loss, which represents the Company’s principal measure of segment performance.

Commentary - Three Months Ended March 31, 2022 vs. 2021

Revenues

•Revenues primarily relate to products for which the Company no longer solicits or accepts new customers, such as large case pensions and long-term care insurance products.

•Total revenues decreased $9 million, or 6.7%, to $126 million in the three months ended March 31, 2022 compared to the prior year primarily driven by lower net investment income from hedge funds and lower net realized capital gains in the three months ended March 31, 2022 compared to the prior year.

Adjusted operating loss

•Adjusted operating loss remained relatively consistent in the three months ended March 31, 2022 compared to the prior year.

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Liquidity and Capital Resources

Cash Flows

The Company maintains a level of liquidity sufficient to allow it to meet its cash needs in the short-term. Over the long term, the Company manages its cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. The Company continuously assesses its regulatory capital requirements, working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions. The Company believes its operating cash flows, commercial paper program, credit facilities, as well as any potential future borrowings, will be sufficient to fund these future payments and long-term initiatives. As of March 31, 2022, the Company had approximately $8.4 billion in cash and cash equivalents, approximately $3.0 billion of which was held by the parent company or nonrestricted subsidiaries.

The net change in cash, cash equivalents and restricted cash during the three months ended March 31, 2022 and 2021 was as follows:

	Three Months Ended March 31,				Change
In millions, except percentages	2022		2021		$		%
Net cash provided by operating activities	$	3,563	$	2,892	$	671	23.2	%
Net cash used in investing activities	(1,993)		(1,867)		(126)		(6.7)	%
Net cash used in financing activities	(2,650)		(3,185)		535		16.8	%
Net decrease in cash, cash equivalents and restricted cash	$	(1,080)	$	(2,160)	$	1,080	50.0	%

Commentary

•Net cash provided by operating activities increased by $671 million in the three months ended March 31, 2022 compared to the prior year. The increase was primarily due to the timing of payments, partially offset by higher inventory purchases during the three months ended March 31, 2022 compared to the prior year.

•Net cash used in investing activities increased by $126 million in the three months ended March 31, 2022 compared to the prior year primarily due to increased purchases of property and equipment, partially offset by higher net proceeds from sale and maturities of investments.

•Net cash used in financing activities decreased to $2.7 billion in the three months ended March 31, 2022 compared to $3.2 billion in the prior year. The decrease in cash used in financing activities primarily related to lower repayments of long-term debt during the three months ended March 31, 2022 compared to the prior year, partially offset by share repurchases in the three months ended March 31, 2022.

Short-term Borrowings

Commercial Paper and Back-up Credit Facilities

The Company did not have any commercial paper outstanding as of March 31, 2022. In connection with its commercial paper program, the Company maintains a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 17, 2023, a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2024, and a $2.0 billion, five-year unsecured back-up revolving credit facility, which expires on May 11, 2026. 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 0.03%, regardless of usage. As of March 31, 2022, there were no borrowings outstanding under any of the Company’s back-up credit facilities.

Federal Home Loan Bank of Boston

A subsidiary of the Company is a member of the Federal Home Loan Bank of Boston (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 March 31, 2022 was approximately $1.0 billion. As of March 31, 2022, there were no outstanding advances from the FHLBB.

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Debt Covenants

The Company’s back-up revolving credit facilities and unsecured senior 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 March 31, 2022, the Company was in compliance with all of its debt covenants.

Debt Ratings 

As of March 31, 2022, the Company’s long-term debt was rated “Baa2” by Moody’s Investor Service, Inc. (“Moody’s”) and “BBB” by Standard & Poor’s Financial Services LLC (“S&P”), and its commercial paper program was rated “P-2” by Moody’s and “A-2” by S&P. The outlook on the Company’s long-term debt is “Stable” by Moody’s and “Positive” by S&P. In assessing the Company’s credit strength, the Company believes that both Moody’s and S&P considered, among other things, the Company’s capital structure and financial policies as well as its consolidated balance sheet, its historical acquisition activity and other financial information. Although the Company currently believes its long-term debt ratings will remain investment grade, it cannot guarantee the future actions of Moody’s and/or S&P. The Company’s debt ratings have a direct impact on its future borrowing costs, access to capital markets and new store operating lease costs.

Share Repurchase Program

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of March 31, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 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 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the three months ended March 31, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the three months ended March 31, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Critical Accounting Policies

The Company prepares the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles, which require management to make certain estimates and apply judgment. Estimates and judgments are based on historical experience, current trends and other factors that management believes to be important at the time the unaudited condensed consolidated financial statements are prepared. On a regular basis, the Company reviews its accounting policies and how they are applied and disclosed in the unaudited condensed consolidated financial statements. While the Company believes the historical experience, current trends and other factors considered by management support the preparation

49

of the unaudited condensed consolidated financial statements in conformity with generally accepted accounting principles, actual results could differ from estimates, and such differences could be material.

For a full description of the Company’s critical accounting policies, see “Critical Accounting Policies” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2021 Form 10-K.

Cautionary Statement Concerning Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Reform Act”) provides a “safe harbor” for forward-looking statements, so long as (1) those statements are identified as forward-looking and (2) the statements are accompanied by meaningful cautionary statements that identify important factors that could cause actual results to differ materially from those discussed in the statement. We want to take advantage of these safe harbor provisions.

Certain information contained in this Quarterly Report on Form 10-Q (this “report”) is forward-looking within the meaning of the Reform Act or SEC rules. This information includes, but is not limited to the forward-looking information in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in Part I, Item 2 of this report. In addition, throughout this report and our other reports and communications, we use the following words or variations or negatives of these words and similar expressions when we intend to identify forward-looking statements:

·	Anticipates	·	Believes	·	Can	·	Continue	·	Could
·	Estimates	·	Evaluate	·	Expects	·	Explore	·	Forecast
·	Guidance	·	Intends	·	Likely	·	May	·	Might
·	Outlook	·	Plans	·	Potential	·	Predict	·	Probable
·	Projects	·	Seeks	·	Should	·	View	·	Will

All statements addressing the future operating performance of CVS Health or any segment or any subsidiary and/or future events or developments, including statements relating to the projected impact of COVID-19 and its emerging new variants on the Company’s businesses, investment portfolio, operating results, cash flows and/or financial condition, statements relating to corporate strategy, statements relating to future revenue, operating income or adjusted operating income, earnings per share or adjusted earnings per share, Health Care Benefits segment business, sales results and/or trends, medical cost trends, medical membership, Medicare Part D membership, medical benefit ratios and/or operations, Pharmacy Services segment business, sales results and/or trends and/or operations, Retail/LTC segment business, sales results and/or trends and/or operations, incremental investment spending, interest expense, effective tax rate, weighted-average share count, cash flow from operations, net capital expenditures, cash available for debt repayment, integration synergies, net synergies, integration costs, enterprise modernization, transformation, leverage ratio, cash available for enhancing shareholder value, inventory reduction, turn rate and/or loss rate, debt ratings, the Company’s ability to attract or retain customers and clients, store development and/or relocations, new product development, and the impact of industry and regulatory developments as well as statements expressing optimism or pessimism about future operating results or events, are forward-looking statements within the meaning of the Reform Act.

Forward-looking statements rely on a number of estimates, assumptions and projections concerning future events, and are subject to a number of significant risks and uncertainties and other factors that could cause actual results to differ materially from those statements. Many of these risks and uncertainties and other factors are outside our control. Certain of these risks and uncertainties and other factors are described under “Risk Factors” included in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and under “Risk Factors” included in Part II, Item 1A of this report; these are not the only risks and uncertainties we face. There can be no assurance that the Company has identified all the risks that affect it. Additional risks and uncertainties not presently known to the Company or that the Company currently believes to be immaterial also may adversely affect the Company’s businesses. If any of those risks or uncertainties develops into actual events, those events or circumstances could have a material adverse effect on the Company’s businesses, operating results, cash flows, financial condition and/or stock price, among other effects.

You should not put undue reliance on forward-looking statements. Any forward-looking statement speaks only as of the date of this report, and we disclaim any intention or obligation to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

The Company has not experienced any material changes in exposures to market risk since December 31, 2021. See the information contained in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for a discussion of the Company’s exposures to market risk.

Item 4.Controls and Procedures

Evaluation of disclosure controls and procedures: The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Securities Exchange Act Rules 13a‑15(f) and 15d‑15(f)) as of March 31, 2022, have concluded that as of such date the Company’s disclosure controls and procedures were adequate and effective and designed to provide reasonable assurance that material information relating to the Company and its subsidiaries would be made known to such officers on a timely basis.

Changes in internal control over financial reporting: There has been no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that occurred in the three months ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II.Other Information

Item 1.Legal Proceedings

The information contained in Note 8 ‘‘Commitments and Contingencies’’ contained in “Notes to Condensed Consolidated Financial Statements (Unaudited)” in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated by reference herein.

Item 1A.Risk Factors

There have been no material changes to the “Risk Factors” disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Those risk factors could adversely affect the Company’s businesses, operating results, cash flows and/or financial condition as well as the market price of the Company’s common shares.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c) Stock Repurchases

The following table presents the total number of shares purchased in the three months ended March 31, 2022, the average price paid per share and the approximate dollar value of shares that still could have been purchased at the end of the applicable fiscal period, pursuant to the share repurchase program authorized by CVS Health Corporation’s Board of Directors on December 9, 2021. See Note 5 ‘‘Shareholders’ Equity’’ contained in “Notes to Condensed Consolidated Financial Statements (Unaudited)” in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

Fiscal Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2022 through January 31, 2022	11,612,413	$	103.34	11,612,413	$	8,800,000,000
February 1, 2022 through February 28, 2022	2,656,835	$	112.92	2,656,835	$	8,500,000,000
March 1, 2022 through March 31, 2022	4,781,527	$	104.57	4,781,527	$	8,000,000,137
	19,050,775			19,050,775

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Item 3.        Defaults Upon Senior Securities

None.

Item 4.        Mine Safety Disclosures

Not Applicable.

Item 5.        Other Information

None.

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Item 6. Exhibits

The exhibits listed in this Item 6 are filed as part of this Quarterly Report on Form 10-Q. Exhibits marked with an asterisk (*) are management contracts or compensatory plans or arrangements. Exhibits other than those listed are omitted because they are not required to be listed or are not applicable. Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Registrant hereby agrees to furnish to the Securities and Exchange Commission a copy of any omitted instrument that is not required to be listed.

INDEX TO EXHIBITS

10	Material Contracts
10.1*	Form of Restricted Stock Unit Agreement between the Registrant and selected employees of the Registrant.
10.2*	Form of Performance Stock Unit Agreement between the Registrant and selected employees of the Registrant.
10.3*	Form of Nonqualified Stock Option Agreement between the Registrant and selected executives of the Registrant.
10.4*	Form of Nonqualified Stock Option Agreement between the Registrant and selected employees of the Registrant.
15	Letter re: unaudited interim financial information
15.1	Letter from Ernst & Young LLP acknowledging awareness of the use of a report dated May 4, 2022 related to their reviews of interim financial information.
31	Rule 13a-14(a)/15d-14(a) Certifications
31.1	Certification by the Chief Executive Officer.
31.2	Certification by the Chief Financial Officer.
32	Section 1350 Certifications
32.1	Certification by the Chief Executive Officer.
32.2	Certification by the Chief Financial Officer.
101
101	The following materials from the CVS Health Corporation Quarterly Report on Form 10-Q for the three months ended March 31, 2022 formatted in Inline XBRL: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Shareholders’ Equity and (vi) the related Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104
104	Cover Page Interactive Data File - The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL (included as Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CVS HEALTH CORPORATION

Date:	May 4, 2022	By:	/s/ Shawn M. Guertin
			Shawn M. Guertin
			Executive Vice President and Chief Financial Officer

EX-10.1

Exhibit 10.1

CVS HEALTH CORPORATION
RESTRICTED STOCK UNIT AGREEMENT
	GRANT DATE: %%OPTION_DATE,'Month DD, YYYY'%-%

1.GRANT OF AWARD. Pursuant and subject to the provisions of the 2017 Incentive Compensation Plan of CVS Health Corporation (the “Plan”), on the date set forth above (the “Grant Date”), CVS Health Corporation (the “Company”) has granted, and hereby evidences by the Restricted Stock Units (the “RSUs”) awarded herein, to the person named below (the “Participant”), subject to the terms and conditions set forth and incorporated in this RSU agreement (the “Agreement”), the right to a future payment of shares of common stock ($0.01 par value) of the Company ( the “Shares”), subject to required tax withholding. The fair market value of the Shares on any date is the closing price of the Company’s common stock on such date (the “FMV”). The Plan is hereby made a part hereof and the Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term(s) in the Plan.

Participant:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Employee ID:	%%EMPLOYEE_IDENTIFIER%-%
RSUs (#):	%%TOTAL_SHARES_GRANTED%-%
Grant Date FMV:	%%MARKET_VALUE%-%
Vest Date 1:	%%VEST_DATE_PERIOD1,'Month DD, YYYY'%-%	%%SHARES_PERIOD1%-%
Vest Date 2:	%%VEST_DATE_PERIOD2,'Month DD, YYYY'%-%	%%SHARES_PERIOD2%-%
Vest Date 3:	%%VEST_DATE_PERIOD3,'Month DD, YYYY'%-%	%%SHARES_PERIOD3%-%
Vest Date 4:	%%VEST_DATE_PERIOD4,'Month DD, YYYY'%-%	%%SHARES_PERIOD4%-%

2.VOTING RIGHTS. An RSU does not represent an equity interest in the Company and carries no voting rights. The Participant shall have no rights of a shareholder with respect to the RSUs and will have rights of a shareholder only with respect to the Shares that have been delivered to the Participant pursuant to the terms set forth herein.

3.DIVIDEND EQUIVALENT.

(a)To the extent dividends are paid on Shares while the RSUs remain outstanding, subject to Section 6(b), a cash amount equivalent to the dividends paid (such cash amount, a “Dividend Equivalent”) with respect to the number of Shares covered by the RSUs shall accrue. Any accrued Dividend Equivalent shall vest and be payable only upon vesting of the underlying RSUs. To the extent that the underlying RSUs do not vest hereunder, any related accrued Dividend Equivalents shall be forfeited.

Proprietary 1 Apr_2022_RSU_Award_Agreement

(b)The Participant hereby agrees that the Company may withhold from the Dividend Equivalent(s), referred to in Section 3(a) above, amounts sufficient to satisfy the applicable tax withholding in respect of such Dividend Equivalent(s).

4.VESTING OF RSU AWARD. Subject to the terms and conditions of the Plan and the Agreement and subject to Participant’s continued employment, on each vest date set forth in Section 1 (each, a “Vest Date”) the Participant shall be entitled to receive (and the Company shall deliver to the Participant) (a) the Shares subject to the RSUs vesting on such Vest Date, within thirty (30) days of the Vest Date or as soon as administratively practicable thereafter, unless delivery of the Shares has been deferred in accordance with Section 6 below (the date of such delivery of the Shares being hereafter referred to as the “Settlement Date”) and (b) the Dividend Equivalent(s) related to the RSUs vesting on such Vest Date, within thirty (30) days or as soon as administratively practicable thereafter. The RSUs shall vest, except as otherwise provided in Section 8, in accordance with the schedule set forth above.

5.REQUIRED ACCEPTANCE OF AWARD. The RSUs will not vest unless the Company has received the Participant’s acceptance of the terms and conditions set forth herein prior to the first anniversary of the Grant Date. Acceptance shall be submitted electronically as required by the Company.

6.DEFERRED STOCK COMPENSATION PLAN.

(a)    In accordance with rules promulgated by the Management Planning and Development Committee of the Board of Directors (the “Committee”), the Participant, to the extent eligible under the CVS Health Deferred Stock Compensation Plan, may elect to defer delivery of the Shares in settlement of RSUs covered by the Agreement. Any such deferred delivery date elected by the Participant shall become the Settlement Date for purposes of the Agreement.

(b)    Notwithstanding Section 3(a), to the extent dividends are paid on such deferred Shares following the applicable Vest Date and prior to the Settlement Date, the Participant shall be entitled to receive a number of additional deferred Shares equal to: (x) the amount of the dividend per Share as declared by the Company’s Board of Directors multiplied by (y) the number of deferred Shares held by the Participant on the record date of such dividend, divided by (z) the FMV of a Share on such dividend payment date.

7.TAXES. On the Settlement Date the number of the Shares to be delivered by the Company to the Participant shall be reduced by the smallest number of the Shares having a FMV at least equal to the dollar amount of Federal, state and local tax withholding required to be withheld by the Company with respect to the related RSUs on such date.

8.TERMINATION OF EMPLOYMENT.

(a)Except as provided in Sections 8 (b) – (f) below, if, for any reason, the Participant’s employment with the Company and any subsidiary of the Company terminates, all the RSUs not then vested in accordance with Section 4 above shall be immediately forfeited.

(b)Termination with Severance. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates and the Participant receives severance pay following Participant’s employment pursuant to a written agreement approved by the Company, the RSUs shall continue to vest through the end of the specified severance period and shall settle in accordance with the original schedule set forth in Section 4 of the Agreement. Any RSUs that will not vest as of the last day of the Participant’s specified severance period shall be forfeited as of the Participant’s employment termination date. In the event that the Participant returns to comparable employment with the Company or any subsidiary, as determined by the Company in its sole discretion, prior to the expiration of the specified severance period, the Participant shall be treated as if the Participant’s employment with the Company or any subsidiary of the Company had continued through the severance period for purposes of determining eligibility for continued vesting (if this occurs, the Participant is required to notify the Plan administrator by electronic mail to:

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equityadministration@cvshealth.com). In the event that the Participant’s termination of employment also qualifies as a Qualified Retirement, the terms of this Section 8(b) or the terms of Section 8(c), whichever provides for greater benefits to the Participant, as determined by the Company in its sole discretion, shall be applied with respect to determining the vesting of the RSUs that are unvested as of the employment termination date. During the specified severance period, the Participant is eligible to accrue Dividend Equivalent(s) on outstanding RSUs as described in Section 3 above.

(c)Qualified Retirement. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of a “Qualified Retirement”, the RSUs shall vest on a pro rata basis as of the employment termination date and shall settle in accordance with the original schedule set forth in Section 4 of the Agreement, in an amount equal to the following: (i) the number of RSUs granted on the Grant Date multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed as of the Qualified Retirement date since the Grant Date and (B) the denominator shall be the initial number of full months in the period during which vesting is required under the award (the “Restricted Period”), minus (ii) the number of RSUs that have vested prior to the Qualified Retirement date. For purposes of this calculation, the number of months in the numerator in subsection (A) above shall include any partial month in which the Participant has been employed. For example, if the time elapsed between the Grant Date and the Qualified Retirement date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9). A “Qualified Retirement” shall mean a termination of employment on or after attainment of age fifty-five (55) with at least ten (10) years of continuous service or attainment of age sixty (60) with at least five (5) years of continuous service, provided that if the Company terminates the Participant’s employment, such termination is without cause, as determined by the Company in its sole discretion (“Cause”). The Participant shall also be deemed to have experienced a Qualified Retirement if the Company terminates the Participant’s employment without Cause and the Participant shall meet the age and service requirement set forth above during the severance period set forth in a written severance agreement with the Company. In the event the Participant’s termination of employment qualifies as a Qualified Retirement and the Participant also enters into a written severance agreement with the Company, the terms of this Section 8(c) or the terms of Section 8(b), whichever provides for greater benefits to the Participant, as determined by the Company in its sole discretion, shall be applied with respect to determining the vesting of the RSUs that are unvested as of the employment termination date. The pro-rated RSUs that vest upon a Qualified Retirement shall settle on the Settlement Date that would have applied had the pro-rated RSUs vested under the original schedule set forth in Section 4 of the Agreement.

(d)Disability. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of total and permanent disability (as defined in the Company’s Long-Term Disability Plan, or, if not defined in such plan, as defined by the Social Security Administration), the RSUs shall vest on a pro rata basis as of the employment termination date and shall settle within thirty (30) days of the employment termination date or as soon as administratively practicable thereafter in an amount equal to the following: (i) the number of RSUs granted on the Grant Date multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed as of the employment termination date and (B) the denominator shall be the initial number of full months in the Restricted Period minus (ii) the number of RSUs that have vested prior to the employment termination date.  For purposes of this calculation, the number of months in the numerator in sub-section (A) above shall include any partial month in which Participant has been employed.  For example, if the time elapsed between the Grant Date and the employment termination date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9).

(e)Death. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of the Participant’s death, the RSUs not then vested in accordance with Section 4 shall immediately vest as of the date of death and shall settle within thirty (30) days of death or as soon as administratively practicable thereafter.

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(f)Change in Control. In the event of a Change in Control, the applicable provisions of the Plan with respect to a Change in Control shall apply.

(g)Transfer of Employment. Transfer of the Participant’s employment between the Company and a subsidiary of the Company or between subsidiaries of the Company shall not be treated as a termination of employment.

(h)Taxes. Participant will be responsible for any applicable withholding or other taxes that become due as a result of RSUs that vest as of the employment termination date or thereafter.

9.NOTICE.

(a)Any notice required to be provided under Section 8 (b) shall be provided by electronic mail to equityadministration@cvshealth.com and shall include “Notice of Reemployment” in the subject line.

(b)Any notice required to be given hereunder to the Participant shall be addressed to the Participant at the address shown on the records of the Company.

(c)Either party may hereafter designate an alternate address in writing, which designation shall be sent to the addresses provided in this section.

10.RECOUPMENT OF RSU AWARD. The RSUs shall be subject to the terms of the Company’s Recoupment Policy as it exists from time to time, which may require the Participant to immediately repay to the Company the value of any pre-tax economic benefit that the Participant may derive from the grant of RSUs hereunder. By accepting the grant of RSUs hereunder, the Participant acknowledges that the Company’s Recoupment Policy has been made available for the Participant’s reference.

11.RESTRICTIVE COVENANT AGREEMENT.

(a)The grant of RSUs pursuant to the Agreement is expressly subject to and contingent upon the requirement that the Participant shall have fully executed and delivered to the Company the applicable written agreement containing the restrictive covenants required by the Company in connection with the award hereunder (the “RCA”).

If the Company intends to require the Participant to execute and deliver a new RCA in connection with the award hereunder, the Company shall provide the new RCA to the Participant and the Participant agrees to execute and deliver the new RCA by the deadline set forth by the Company.  If the Participant is currently subject to an RCA and the Company does not require the Participant to execute and deliver a new RCA, then, by accepting the RSUs, pursuant to the Agreement, the Participant reaffirms the Participant’s intent to comply with all of the provisions in the Participant’s current RCA.

The Participant agrees that failure to execute and return the new RCA, if required, by the deadline set forth by the Company, shall result in the immediate and irrevocable forfeiture of the RSUs granted hereunder and any right to receive Dividend Equivalents or Shares with respect thereto.

(b)If the Participant violates any provision of the applicable RCA, as determined by the Company in its sole discretion (an “RCA Violation”), (i) the Participant shall immediately and irrevocably forfeit the RSUs, to the extent unvested, and any related accrued Dividend Equivalents, and shall have no right to any payment in connection with such forfeiture; and (ii) with respect to any RSUs that vested within the two (2) year period ending on the earlier of (A) the date, as determined in the sole discretion of the Company, of the Participant’s RCA Violation, or (B) the Participant’s termination of employment, the Participant shall be required, upon demand, to repay or otherwise reimburse the Company (including by forfeiting any deferred compensation credits in respect of such RSUs under the Company’s non-qualified compensation deferral plans) an amount having a value equal to the

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aggregate FMV of the Shares delivered with respect to the vested RSUs as of the date the RSUs became vested plus any Dividend Equivalents paid on such Shares.

By accepting the grant of RSUs under the Agreement, the Participant acknowledges and agrees thatthe remedy described above does not constitute the exclusive remedy for the Participant’s violation of the RCA and, as the forfeiture and repayment provisions are not adequate remedies at law, the Company may seek any additional legal or equitable remedy, including injunctive relief, for any such violation. The provisions in this section are essential economic conditions to the Company’s grant of RSUs to the Participant. By receiving the grant of RSUs hereunder, the Participant agrees that the Company and its subsidiaries and affiliates may make deductions from any amounts they may owe the Participant, individually or collectively, from time to time (such as wages or other compensation, deferred compensation credits, vacation pay, severance or other payments owed following a termination of employment, as well as any other amounts owed to the Participant by the Company or its subsidiaries or affiliates) to the extent of any amounts the Participant owes the Company under this section. The provisions of this section and any amounts repayable or reimbursable by the Participant hereunder are intended to be in addition to any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.

12.SECTION 409A. The Company intends that the Agreement not violate any applicable provision of, or result in any additional tax or penalty under, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations hereunder (collectively, “Section 409A”), and that to the extent any provisions of the Agreement do not comply with Section 409A the Company will make such changes in order to comply with Section 409A to the extent it considers reasonable. In all events, the provisions of CVS Health Corporation’s 409A Universal Definitions Document are hereby incorporated by reference and, to the extent required to avoid a violation of Section 409A by reason of Section 409A(a)(2)(B)(i) of the Code, payment of any amounts subject to Section 409A shall be delayed until the first business day of the seventh month immediately following the employment termination date, as of which date any such delayed payments shall be made in a lump sum. For purposes of any provision of the Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to a “termination of employment” (and corollary terms) shall be construed to refer to a “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)). Notwithstanding the foregoing, the Company makes no representations as to the tax treatment or consequences of any payment made hereunder, and the Participant, by accepting the RSUs under the Agreement, acknowledges that the Participant shall be solely responsible for such tax treatment or consequences.

13.LAWS AND POLICIES.

(a)By accepting the grant of RSUs under the Agreement, (i) the Participant acknowledges that a copy of the Plan has been made available by the Company for the Participant’s reference and agrees to be bound by the terms and conditions set forth in the Agreement and the Plan as in effect from time to time, (ii) the Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict the Participant’s right to trade Shares, including without limitation, sales of the Shares acquired in connection with RSUs, and (iii) the Participant agrees to comply with such Federal securities law requirements and Company policies, as such laws and policies may be amended from time to time.

(b)Neither the execution and delivery hereof nor the grant of RSUs evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its subsidiaries to employ the Participant for any specific period.

14.COMMITTEE AUTHORITY. The Committee shall have the authority, in its sole discretion, to make any interpretations, determinations, and/or take any administrative actions with respect to the Plan and the Agreement, including without limitation whether any post-termination payments to the Participant shall be deemed severance pay and/or whether a termination was with or without Cause.

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In the event of any inconsistency between the terms hereof and the provisions of the Plan, the Plan shall govern.

15.GOVERNING LAW. The Agreement and the RSUs evidenced hereby shall be governed by the laws of Delaware, without giving effect to principles of conflict of laws.

16.ACKNOWLEDGEMENT. The Agreement shall be effective only upon the Participant’s formal acceptance of the terms and conditions set forth above as required by the Company.

By:	/S/ Laurie P. Havanec
	Executive Vice President, Chief People Officer
	CVS Health Corporation

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EX-10.2

Exhibit 10.2

CVS HEALTH CORPORATION
PERFORMANCE STOCK UNIT AGREEMENT
	GRANT DATE: %%OPTION_DATE,'Month DD, YYYY'%-%

1.GRANT OF AWARD. Pursuant and subject to the provisions of the 2017 Incentive Compensation Plan of CVS Health Corporation (the “Plan”), on the date set forth above (the “Grant Date”), CVS Health Corporation (the “Company”) has granted and hereby evidences by the Performance Stock Units (the “PSUs”) awarded herein, to the person named below (the “Participant”), subject to the terms and conditions set forth and incorporated in this PSU agreement (the “Agreement”), the right to a future payment of shares of common stock ($0.01 par value) of the Company (the “Shares”), subject to required tax withholding. The actual number of Shares (if any) that the Participant receives shall be subject to the terms and conditions of the Plan and the Agreement, including, without limitation, the Company’s achievement of the performance goals set forth in Appendix A and as determined under Section 13 of the Agreement. The fair market value of the Shares on any date is the closing price of the Company’s common stock on such date (the “FMV”). The Plan is hereby made a part hereof and the Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term(s) in the Plan. On the Grant Date specified above, the fair value, as determined utilizing the methodology approved by the Management Planning and Development Committee of the Board of Directors (the

“Committee”) or its delegate, of each PSU is as stated below.

Participant:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%
Employee ID:	%%EMPLOYEE_IDENTIFIER%-%
Target Number of PSUs (#):	%%TOTAL_SHARES_GRANTED,'999,999,999'%-%
Grant Date Fair Value:	%%MARKET_VALUE%-%

2.VOTING RIGHTS. A PSU does not represent an equity interest in the Company and carries no voting rights. The Participant shall have no rights of a shareholder with respect to the PSUs and will have rights of a shareholder only with respect to the Shares that have been delivered to the Participant pursuant to the terms set forth herein.

3.VESTING OF PSU AWARD AND HOLDING PERIOD.

(a)Subject to the terms and conditions of the Plan and the Agreement and subject to Participant’s continued employment, the PSUs shall vest and become non-forfeitable on April 1, 2025 or such other date as may be provided in Section 7 (the “Vest Date”), based on the level of achievement of the performance goals set forth in Appendix A (and as determined by reference to Appendices B and C), and shall be determined by multiplying the number of PSUs that are subject to the Agreement by the applicable performance adjustment shown in Appendix A for the attained level of the performance goals. The “Performance Period” shall be the three-year period commencing on January 1, 2022 and ending on December 31, 2024.

(b)The Participant shall be entitled to receive (and the Company shall deliver to the Participant) the Shares (if any), subject to any applicable withholdings, within thirty (30) days or as soon as administratively practicable thereafter following the Vest Date, unless delivery of the Shares has been deferred in accordance with Section 5 below (the date of such delivery of the Shares being hereafter referred to as the “Settlement Date”).

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(c)Notwithstanding anything herein to the contrary, if the Participant is a Designated Officer as referenced in the Management Planning and Development Committee Charter or becomes a Designated Officer at any time during the Performance Period, the Participant agrees and covenants that as a condition to the receipt of the grant of PSUs and the payment of the PSUs hereunder, the Participant shall not sell or otherwise transfer any Shares issued and transferred to the Participant pursuant to the Agreement (including with respect to any Shares that are deferred under Section 5(a)) until the second anniversary of the Settlement Date or the second anniversary of the Participant’s date of separation from the Company, if earlier, (such period hereinafter referred to as the “Holding Period”), except that the Participant shall be permitted, prior to the end of the Holding Period, (a) to sell or transfer shares to pay applicable tax and social security withholdings, if any, with respect to such settlement (or, alternatively, if the Company withholds such Shares pursuant to Section 6 of the Agreement, the requirements in this Section 3(c) not to sell or otherwise transfer any Shares shall only apply to the number of such Shares delivered to the Participant (i.e., after such withholding of Shares)), (b) to sell or transfer shares upon a Change in Control, or (c) to transfer Shares to the Participant’s personal brokerage account. The Participant’s attempt to assign or transfer Shares subject to the Agreement, either voluntarily or involuntarily, contrary to the provisions hereof, shall be null and void and without effect. The Company may, in its sole discretion, impose restrictions on the assignment or transfer of Shares consistent with the provisions hereof, including, without limitation, by or through the transfer agent for such Shares or by means of legending stock certificates or otherwise.

4.REQUIRED ACCEPTANCE OF AWARD. The PSUs will not vest unless the Company has received the Participant’s acceptance of the terms and conditions set forth herein prior to the first anniversary of the Grant Date. Acceptance shall be submitted electronically as required by the Company.

5.DEFERRED STOCK COMPENSATION PLAN.

(a)In accordance with rules promulgated by the Committee, the Participant, to the extent eligible under the CVS Health Deferred Stock Compensation Plan, may elect to defer delivery of the Shares in settlement of PSUs covered by the Agreement. Any such deferred delivery date elected by the Participant shall become the Settlement Date for purposes of the Agreement.

(b)To the extent dividends are paid on such deferred Shares following the Vest Date and prior to the Settlement Date, the Participant shall be entitled to receive additional deferred Shares equal to: (x) the amount of the dividend per Share as declared by the Company’s Board of Directors multiplied by (y) the number of deferred Shares held by the Participant on the record date of such dividend, divided by (z) the FMV of a Share on such dividend payment date.

6.WITHOLDING FOR TAXES. On the Settlement Date the number of the Shares to be delivered by the Company to the Participant shall be reduced by the number of the Shares having an FMV at least equal to the dollar amount of Federal, state and local tax withholding required to be withheld by the Company with respect to related PSUs on such date.

7.TERMINATION OF EMPLOYMENT.

(a)Except as provided in Section 7 (b) – (e) below, if, for any reason, the Participant’s employment with the Company and any subsidiary of the Company terminates, all the PSUs not then vested in accordance with Section 3 above shall be immediately forfeited.

(b)Qualified Retirement or Involuntary Termination with Severance. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of a “Qualified Retirement” or an involuntary termination and the Participant receives severance pay following the Participant’s employment, the PSUs shall vest on a pro rata basis as of the Participant’s employment termination date and shall settle in accordance with the original schedule set forth in Section 3 of the Agreement as follows: the total number of PSUs to which the Participant shall be entitled shall be equal to the number of PSUs based upon actual performance as of the end of the Performance Period multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed as of the employment termination date since the later of (i) the beginning of the

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Performance Period or (ii) the Participant’s hire date and (B) the denominator shall be the number of months in the Performance Period. For purposes of this calculation, the number of months in the numerator in sub-section (A) above shall include any partial month in which the Participant has been employed. For example, if the time elapsed between the beginning of the Performance Period and the Qualified Retirement date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9). A “Qualified Retirement” shall mean a termination of employment on or after attainment of age fifty- five (55) with at least ten (10) years of continuous service or attainment of age sixty (60) with at least five (5) years of continuous service, provided that: (i) if the Participant terminates employment voluntarily, the Participant has provided the Company with at least ninety (90) days advance written notice, in accordance with the provisions of Section 8 below, of the Participant’s retirement date or such other term of advance written notice as is determined by the Chief People Officer of the Company; or (ii) if the Company terminates the Participant’s employment, such termination is without cause, as determined by the Company in its sole discretion (“Cause”). The pro-rated PSUs that vest upon a Qualified Retirement or an involuntary termination with severance shall settle on the Settlement Date that would have applied had the pro-rated PSUs vested under the original schedule set forth in Section 3 of the Agreement.

(c)Disability. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of total and permanent disability (as defined in the Company’s Long-Term Disability Plan, or, if not defined in such Plan, as defined by the Social Security Administration), the PSUs shall vest on a pro rata basis as of the employment termination date and shall settle within thirty (30) days of the employment termination date or as soon as administratively practicable thereafter in an amount equal to the following: the number of PSUs based upon target performance as of the end of the Performance Period multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed as of the employment termination date, which is the last date that the Participant is employed by the Company and any subsidiary of the Company, since the later of (i) the beginning of the Performance Period or (ii) the Participant’s hire date and (B) the denominator shall be the number of months in the Performance Period.  For purposes of this calculation, the number of months in the numerator in sub-section (A) above shall include any partial month in which the Participant has been employed.  For example, if the time elapsed between the beginning of the Performance Period and the employment termination date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9).

(d)Death. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of the Participant’s death, the PSUs not then vested in accordance with Section 3 shall immediately vest as of the date of death based upon target performance and shall settle within thirty (30) days of death or as soon as administratively practicable thereafter.

(e)Change in Control. In the event of a Change in Control, the applicable provisions of the Plan with respect to a Change in Control shall apply.

(f)Transfer of Employment. Transfer of the Participant’s employment between the Company and a subsidiary of the Company or between subsidiaries of the Company shall not be treated as a termination of employment.

(g)Taxes. Participant will be responsible for any applicable withholding or other taxes that become due as a result of PSUs that vest as of the employment termination date or thereafter.

8.NOTICE.

(a)A retirement notice required to be given hereunder to the Company under Section 7 (b) shall be in writing, shall include “Retirement Notice” in the subject line, and shall be provided (i) to the Participant’s leader and (ii) to equityadministration@cvshealth.com (if by electronic mail) or CVS

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Health Corporation, Attention: Senior Director, Executive Compensation, One CVS Drive, Woonsocket, RI 02895 (if by regular mail).

(b)Any notice required to be given hereunder to the Participant shall be addressed to the Participant at the address shown on the records of the Company.

(c)Either party may hereafter designate an alternate address in writing, which designation shall be sent to the addresses provided in this section.

9.RECOUPMENT OF PSU AWARD. The PSUs shall be subject to the terms of the Company’s Recoupment Policy as it exists from time to time, which may require the Participant to immediately repay to the Company the value of any pre-tax economic benefit that the Participant may derive from the grant of the PSUs hereunder. By accepting the grant of PSUs hereunder, the Participant acknowledges that the Company’s Recoupment Policy has been made available for the Participant’s reference.

10.RESTRICTIVE COVENANT AGREEMENT.

(a)The grant of PSUs pursuant to the Agreement is expressly subject to and contingent upon the requirement that the Participant shall have fully executed and delivered to the Company the applicable written agreement containing the restrictive covenants required by the Company in connection with the award hereunder (the “RCA”).

If the Company intends to require the Participant to execute and deliver a new RCA in connection with the award hereunder, the Company shall provide the new RCA to the Participant and the Participant agrees to execute and deliver the new RCA by the deadline set forth by the Company.  If the Participant is currently subject to an RCA and the Company does not require the Participant to execute and deliver a new RCA, then, by accepting the PSUs, pursuant to the Agreement, the Participant reaffirms the Participant’s intent to comply with all of the provisions in the Participant’s current RCA.

The Participant agrees that failure to execute and return the new RCA, if required, by the deadline set forth by the Company shall result in the immediate and irrevocable forfeiture of the PSUs granted

hereunder and any right to receive Shares or any other payment with respect thereto.

(b)If the Participant violates any provision of the applicable RCA, as determined by the Company in its sole discretion (an “RCA Violation”), (i) the Participant shall immediately and irrevocably forfeit the PSUs, to the extent unvested, and shall have no right to any payment in connection with such forfeiture; and (ii) with respect to any PSUs that vested within the two (2) year period ending on the earlier of (A) the date, as determined in the sole discretion of the Company, of the Participant’s RCA Violation, or (B) the Participant’s termination of employment, the Participant shall be required, upon demand, to repay or otherwise reimburse the Company (including by forfeiting any deferred compensation credits in respect of such PSUs under the Company’s non-qualified compensation deferral plans) an amount having a value equal to the aggregate FMV of the Shares delivered with respect to the vested PSUs as of the date the PSUs became vested plus the value of any Shares provided pursuant to Section 5(b).

By accepting the grant of PSUs under the Agreement, the Participant acknowledges and agrees that the remedy described above does not constitute the exclusive remedy for the Participant’s violation of the RCA and, as the forfeiture and repayment provisions are not adequate remedies at law, the Company may seek any additional legal or equitable remedy, including injunctive relief, for any such violation. The provisions in this section are essential economic conditions to the Company’s grant of PSUs to the Participant. By receiving the grant of PSUs hereunder, the Participant agrees that the Company and its subsidiaries and affiliates may make deductions from any amounts they may owe the Participant, individually or collectively, from time to time (such as wages or other compensation,

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deferred compensation credits, vacation pay, severance or other payments owed following a termination of employment, as well as any other amounts owed to the Participant by the Company or its subsidiaries or affiliates) to the extent of any amounts the Participant owes the Company under this section. The provisions of this section and any amounts repayable or reimbursable by the Participant hereunder are intended to be in addition to any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.

11.SECTION 409A. The Company intends that the Agreement not violate any applicable provision of, or result in any additional tax or penalty under, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations hereunder (collectively, “Section 409A”), and that to the extent any provisions of the Agreement do not comply with Section 409A the Company will make such changes in order to comply with Section 409A to the extent it considers reasonable. In all events, the provisions of the Company’s 409A Universal Definitions Document are hereby incorporated by reference and, to the extent required to avoid a violation of Section 409A by reason of Section 409A(a)(2)(B)(i) of the Code, payment of any amounts subject to Section 409A shall be delayed until the first business day of the seventh month immediately following the employment termination date, as of which date any such delayed payments shall be made in a lump sum. For purposes of any provision of the Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to a “termination of employment” (and corollary terms) shall be construed to refer to a “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)). Notwithstanding the foregoing, the Company makes no representations as to the tax treatment or consequences of any payment made hereunder, and the Participant, by accepting the PSUs under the Agreement, acknowledges that the Participant shall be solely responsible for such tax treatment or consequences.

12.LAWS AND POLICES.

(a)By accepting the grant of PSUs under the Agreement, (i) the Participant acknowledges that a copy of the Plan has been made available by the Company for the Participant’s reference and agrees to be bound by the terms and conditions set forth in the Agreement and the Plan as in effect from time to time, (ii) the Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict the Participant’s right to trade Shares, including without limitation, sales of the Shares acquired in connection with PSUs, and (iii) the Participant agrees to comply with such Federal securities law requirements and Company policies, as such laws and policies may be amended from time to time.

(b)Neither the execution and delivery hereof nor the grant of PSUs evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its subsidiaries to employ the Participant for any specific period.

13.COMMITTEE AUTHORITY. The Committee shall have the authority, in its sole discretion, to make any interpretations, determinations, and/or take any administrative actions with respect to the Plan and the Agreement, including without limitation whether any post-termination payments to the Participant shall be deemed severance pay and/or whether a termination was with or without Cause. In the event of any inconsistency between the terms hereof and the provisions of the Plan, the Plan shall govern. Furthermore, the determination of the achievement of any performance goals under the Agreement, and the amounts and calculations used in making such determination, shall be in the Board of Directors’ or the Committee’s sole discretion and such determination shall be final, binding and conclusive for all purposes and upon all parties. The Committee (or, if applicable, the Chief Executive Officer of the Company) may, in its discretion, reduce or increase the amount of a settlement otherwise to be made in connection with the PSUs to the extent permissible under the Plan.

14.GOVERNING LAW. The Agreement and the PSUs evidenced hereby shall be governed by the laws of Delaware, without giving effect to principles of conflict of laws.

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15.ACKNOWLEDGEMENT. The Agreement shall be effective only upon the Participant’s formal acceptance of the terms and conditions set forth above as required by the Company.

By:	/S/ Laurie P. Havanec
	Executive Vice President, Chief People Officer
	CVS Health Corporation

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EX-10.3

Exhibit 10.3

CVS HEALTH CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
	GRANT DATE: %%OPTION_DATE,'Month DD, YYYY'%-%

1.GRANT OF AWARD. Pursuant and subject to the provisions of the 2017 Incentive Compensation Plan of CVS Health Corporation (the “Plan”), on the date set forth above (the “Grant Date”), CVS Health Corporation (the “Company”) has granted and hereby evidences the award to the person named below (the “Participant”), subject to the terms and conditions set forth or incorporated in this Nonqualified Stock Option Agreement (the “Agreement”), the right, and option, to purchase from the Company the aggregate number of shares of common stock ($0.01 par value) of the Company (the “Shares”) set forth below, at the purchase price indicated below (the “Option”), such Option to be exercised as hereinafter provided. The fair market value of the Shares on any date is the closing price of the Company’s common stock on such date (the “FMV”). The Plan is hereby made a part hereof and Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term(s) in the Plan. The Option is a nonqualified option as defined in the Plan.

Participant:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Employee ID:	%%EMPLOYEE_IDENTIFIER%-%
Shares:	%%TOTAL_SHARES_GRANTED%-%
Option Price:	%%OPTION_PRICE,'$999,999,999.99'%-%
Vest Date 1:	%%VEST_DATE_PERIOD1,'Month DD, YYYY'%-%	%%SHARES_PERIOD1%-%
Vest Date 2:	%%VEST_DATE_PERIOD2,'Month DD, YYYY'%-%	%%SHARES_PERIOD2%-%
Vest Date 3:	%%VEST_DATE_PERIOD3,'Month DD, YYYY'%-%	%%SHARES_PERIOD3%-%
Vest Date 4:	%%VEST_DATE_PERIOD4,'Month DD, YYYY'%-%	%%SHARES_PERIOD4%-%

2.TERM OF OPTION. The term of the Option shall be for a period of ten (10) years from the Grant Date, subject to the earlier termination of the Option as set forth in the Plan and in the Agreement, and shall expire on the last day of its term (the “Expiration Date”). No portion of the Option shall be exercisable after the Expiration Date.

3.VESTING AND EXERCISE OF OPTION.

(a)    The Option, subject to the provisions of the Plan, shall be exercised by submitting a request to exercise to the Company’s stock plan administrator, in accordance with the Company’s current exercise policies and procedures, specifying the number of Shares to be purchased, which number may not be less than one hundred (100) Shares (unless the number of Shares purchased is the total balance). An exercise by the Participant of all or part of the Option shall be effected through the Company’s “cashless exercise” procedures. Otherwise, at the time of exercise, Participant shall tender to the Company cash or cash equivalents for the aggregate option price of the Shares, which is the FMV of the Shares as of the Grant Date (the “Option Price”), that the Participant has elected to purchase or certificates for Shares of common stock of the Company owned by the Participant for at

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least six (6) months with a FMV at least equal to the aggregate Option Price of the Shares that the Participant has elected to purchase, or a combination of the foregoing.

(b)    Prior to its expiration or termination and except as otherwise provided herein, the Option will become vested in accordance with the vesting schedule set forth above, each date on which vesting occurs a “Vest Date”, and the Option will be exercisable by the Participant to the extent vested prior to the Expiration Date so long as the Participant has maintained continuous employment with the Company or a subsidiary of the Company from the Grant Date through the exercise date.

(c)    Notwithstanding anything to the contrary in the Agreement or the Plan, the vested and exercisable portion of the Option that remains outstanding on the last business day prior to the Expiration Date (the “Automatic Exercise Date”) shall be deemed to have been automatically exercised by the Participant, without any further action or notice by the Company or the Participant, at such time if: (i) (A) the Participant is employed with the Company or any of its subsidiaries on the Automatic Exercise Date or (B) the Expiration Date would occur while the Option remains exercisable pursuant to Sections 8 and 9 of the Agreement, (ii) the Participant has accepted the Option as required by the Company under Section 4, and (iii) the FMV of a Share on the Automatic Exercise Date exceeds the Option Price. The exercise of the Option pursuant to this Section 3(c) shall be effected through the Company’s “cashless exercise” procedures. Notwithstanding the foregoing, there is no guarantee that an automatic exercise pursuant to this Section 3(c) will be effected on the Participant’s behalf and neither the Company nor any other party will bear any responsibility or liability if such an automatic exercise is not effected and instead the Option expires unexercised. Accordingly, the Participant shall bear sole responsibility for ensuring that the Participant exercises any vested portion of the Option prior to the Expiration Date.For the avoidance of doubt, the Option shall not be deemed automatically exercised pursuant to this Section 3(c) if, on the Automatic Exercise Date, the FMV of a Share is less than or equal to the Option Price.

4.REQUIRED ACCEPTANCE OF AWARD. The Option will not vest or be exercisable unless the Company has received the Participant’s acceptance of the terms and conditions set forth herein prior to the first anniversary of the Grant Date. Acceptance shall be submitted electronically as required by the Company.

5.TAXES. Upon a cashless exercise of the Option the Company shall withhold from the proceeds of the exercise of the Option any required taxes. If the Option is exercised other than through a cashless exercise the Company shall have the right to require the Participant to pay the amount of any withholding taxes immediately, upon notification from the Company, before the proceeds from the exercise of the Option are delivered to the Participant. Furthermore, the Company may elect to deduct such taxes from any other amounts then payable to the Participant by the Company in cash or in Shares or from any other amounts payable any time thereafter to the Participant by the Company to the extent allowed under applicable law.

6.TRANSFERABILITY. The Option may be transferred to and may thereafter be exercised by one or more members of the Participant’s immediate family, the Participant’s former spouse if the transfer is pursuant to a court approved divorce settlement agreement, a trust established by the Participant for the benefit of one or more members of the Participant’s immediate family, or a partnership or company of which the only owners are members of the Participant’s immediate family (the “Transferee(s)”); if, that no portion of the Option may be transferred until such time as it becomes vested and exercisable pursuant to Section 3(b) hereof, and further provided that no more than fifty percent (50%) of the exercisable Option may be transferred by Participant. A “member of the Participant’s immediate family” shall mean the Participant’s spouse, parents, children, grandchildren and the spouses of such parents, children and grandchildren. A Transferee will be subject to all terms and conditions applicable to the Participant under the Option prior to its transfer, except that Transferee may not transfer the Option. In order to transfer the Option, the Participant must notify the Company in the form of a “Notice of Transfer of Nonqualified Stock Option” (which form may be obtained from the Company’s Legal Department) of such transfer and include the name, address and social security number of Transferee, as well as the relationship of Transferee to the Participant.

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With respect to any transfer of the Option, the Participant and/or Transferee will be subject to tax reporting and be responsible for any tax liability due in accordance with the law in effect at the time of the transfer of the Option or the exercise of the transferred Option by Transferee or otherwise, as the case may be.

7.FORFEITURE OF OPTION UPON TERMINATION OF EMPLOYMENT. Unless otherwise provided for in the Plan or in the Agreement, as of the date on which the Participant’s employment with the Company and its subsidiaries terminates, the Option, to the extent unexercised, whether vested or unvested, as of the Participant’s employment termination date, shall be forfeited immediately in its entirety, provided that, if the Participant’s employment with the Company and its subsidiaries terminates without cause, as determined by the Company in its sole discretion (“Cause”), the Option, to the extent vested and unexercised as of the employment termination date, shall be exercisable at any time on or before the ninetieth (90th) day immediately following the employment termination date and, to the extent the Option is unvested as of the employment termination date, the Option shall be forfeited immediately.

8.INVOLUNTARY TERMINATION OF EMPLOYMENT WITH SEVERANCE. In the event that the Participant’s employment with the Company and its subsidiaries is terminated by the Company without Cause and Participant receives severance pay following the Participant’s employment pursuant to a written agreement approved by the Company, vesting of the Option shall continue through the end of the severance period set forth in the written agreement providing for such severance pay. To the extent vested, the Option shall be exercisable at any time during the severance period and on or before the ninetieth (90th) day following the last day of the severance period, as long as no government regulations or rules are violated by such continued vesting or exercise period; provided, however, that in no event will the Option be exercisable beyond its original term. Any portion of the Option not vested as of the last day of the severance period shall be forfeited as of the last day of the severance period. In the event that the Participant returns to comparable employment with the Company or any subsidiary, as determined by the Company in its sole discretion, prior to the expiration of the severance period, the Participant shall be treated as if the Participant’s employment with the Company or any subsidiary of the Company had continued through the severance period for purposes of determining eligibility for continued vesting (if this occurs, the Participant is required to notify the Plan administrator by electronic mail to: equityadministration@cvshealth.com).

QUALIFIED RETIREMENT. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of a Qualified Retirement, Participant (a) shall continue to vest in the Option for a period of three (3) years following the Participant’s retirement date and (b) may exercise the Option, to the extent vested, at any time within the period of three (3) years following the Participant’s retirement date, but not beyond the original term of the Option, in both cases as long as no government regulations or rules are violated by such continued vesting or exercise period. To the extent unvested or unexercised at the end of the three (3) year period following the Participant’s retirement date, the Option shall be forfeited. In the event the Participant’s termination of employment qualifies as a Qualified Retirement and the Participant also enters into a severance agreement with the Company, the terms of this Section 9 shall apply with respect to the vesting and exercise of the Option as of the employment termination date. A “Qualified Retirement” shall mean ALTERNATIVE: [termination of employment on or after attainment of age fifty-five (55) with at least ten (10) years of continuous service or attainment of age sixty (60) with at least five (5) years of continuous service] [specific terms determined in advance by the Management Planning and Development Committee], provided that: (i) if the Participant terminates employment voluntarily, the Participant has provided the Company with at least ninety (90) days advance written notice, in accordance with the provisions of Section 14 below, of the Participant’s retirement date or such other term of advance written notice as is determined by the Chief People Officer of the Company; or (ii) if the Company terminates the Participant’s employment, such termination is without Cause.  The Participant shall also be deemed to have experienced a Qualified Retirement if the Company terminates the Participant’s employment without Cause and the Participant shall meet the age and service or other requirement

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set forth above during the severance period set forth in a written severance agreement with the Company.

9.DISABILITY. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of total and permanent disability (as defined in the Company’s Long-Term Disability Plan, or, if not defined in such plan, as defined by the Social Security Administration), the Option shall vest as of the employment termination date on a pro-rata basis as follows: the Option shall vest with respect to a total number of the Shares equal to (i) the number of the Shares subject to the Option on the Grant Date multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed, as of the employment termination date, since the Grant Date and (B) the denominator shall be the initial number of full months in the period during which vesting is required under the Award , minus (ii) the number of the Shares with respect to which the Option vested prior to the employment termination date (whether or not the Option was previously exercised). For purposes of this calculation, the number of months in the numerator in sub-section (A) above shall include any partial month in which the Participant has been employed. For example, if the time elapsed between the Grant Date and the employment termination date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9). The Option may be exercised to the extent vested at any time within one (1) year of the employment termination date but in no event beyond the original term of the Option.

10.DEATH. In the event of the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of the Participant’s death, the Option to the extent not then vested in accordance with Section 3 shall immediately vest and the Option shall remain exercisable for a period of one (1) year after the Participant’s death, or until the Expiration Date, whichever occurs first, by Participant’s Beneficiary. At the end of said one (1) year time period, or as of the Expiration Date if earlier, all rights with respect to the Option shall terminate and the Option shall be cancelled.

11.CHANGE IN CONTROL. In the event of a Change in Control, the applicable provisions of the Plan with respect to a Change in Control shall apply.

12.TRANSFER OF EMPLOYMENT.     Transfer of the Participant’s employment between the Company and a subsidiary of the Company or between subsidiaries of the Company shall not be treated as a termination of employment.

13.NOTICE.

(a)Any notice required to be provided under Section 8 shall be provided by electronic mail to equityadministration@cvshealth.com and shall include “Notice of Reemployment” in the subject line.

(b)A retirement notice required to be given hereunder to the Company under Section 9 shall be in writing, shall include “Retirement Notice” in the subject line, and shall be provided (i) to the Participant’s leader and (ii) to equityadministration@cvshealth.com (if by electronic mail) or CVS Health Corporation, Attention: Senior Director, Executive Compensation, One CVS Drive, Woonsocket, RI 02895 (if by regular mail).

(c)Any notice required to be given hereunder to the Participant shall be addressed to the Participant at the address shown on the records of the Company.

(d)Either party may hereafter designate an alternate address in writing, which designation shall be sent to the addresses provided in this section.

14.RECOUPMENT OF OPTION AWARD. The Option shall be subject to the terms of the Company’s Recoupment Policy as it exists from time to time, which may require the Participant to immediately repay to the Company the value of any pre-tax economic benefit that the Participant may derive from the grant of the Option hereunder. By accepting the grant of the Option hereunder, the

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Participant acknowledges that a copy of the Company’s Recoupment Policy has been made available for the Participant’s reference.

15.RESTRICTIVE COVENANT AGREEMENT.

(a) The Option granted pursuant to the Agreement is expressly subject to and contingent upon the requirement that the Participant shall have fully executed and delivered to the Company the applicable written agreement containing the restrictive covenants required by the Company in connection with the award hereunder (the “RCA”).

If the Company intends to require the Participant to execute and deliver a new RCA in connection with the grant hereunder, the Company shall provide the new RCA to the Participant and the Participant agrees to execute and deliver the new RCA by the deadline set forth by the Company.  If the Participant is currently subject to an RCA and the Company does not require the Participant to execute and deliver a new RCA, then, by accepting the grant of the Option pursuant to the Agreement, the Participant reaffirms the Participant’s intent to comply with all of the provisions in the Participant’s current RCA.

The Participant agrees that failure to execute and return the new RCA, if required, by the deadline set forth by the Company shall result in the immediate and irrevocable forfeiture of the Option granted hereunder.

(b)    If the Participant violates any provision of the applicable RCA, as determined by the Company in its sole discretion (an “RCA Violation”), (i) the Participant shall immediately and irrevocably forfeit the Option, to the extent unvested, and shall have no right to any payment in connection with such forfeiture; and (ii) with respect to any portion of the Option that vested within the two (2) year period ending on the earlier of (A) the date, as determined in the sole discretion of the Company, of the Participant’s RCA Violation, or (B) the Participant’s termination of employment, the Participant shall forfeit the Option to the extent unexercised and shall be required, upon demand, to repay or otherwise reimburse the Company an amount having a value equal to, with respect to each exercise event, the market value of the Shares subject to the exercise of the Option at the time of exercise minus the Option Price with respect to the Shares subject to the exercise of the Option.

By accepting the grant of the Option under the Agreement, the Participant acknowledges and agrees that the remedy described above does not constitute the exclusive remedy for the Participant’s violation of the RCA and, as the forfeiture and repayment provisions are not adequate remedies at law, the Company may seek any additional legal or equitable remedy, including injunctive relief, for any such violation. The provisions in this section are essential economic conditions to the Company’s grant of the Option to the Participant. By receiving the grant of the Option hereunder, the Participant agrees that the Company and its subsidiaries and affiliates may make deductions from any amounts they may owe the Participant, individually or collectively, from time to time (such as wages or other compensation, deferred compensation credits, vacation pay, severance or other payments owed following a termination of employment, as well as any other amounts owed to the Participant by the Company or its subsidiaries or affiliates) to the extent of any amounts the Participant owes the Company under this section. The provisions of this section and any amounts repayable or reimbursable by the Participant hereunder are intended to be in addition to any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.

16.LAWS AND POLICIES.

(a)By accepting the grant of the Option under the Agreement, (i) the Participant acknowledges that a copy of the Plan has been made available by the Company for the Participant’s reference and agrees to be bound by the terms and conditions set forth in the Agreement and the Plan as in effect from time to time, (ii) the Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict the Participant’s right to trade Shares, including without limitation, sales of the Shares acquired in connection with the

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Option, and (iii) the Participant agrees to comply with such Federal securities law requirements and Company policies, as such laws and policies may be amended from time to time.

(b)Neither the execution and delivery hereof nor the grant of the Option evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its subsidiaries to employ the Participant for any specific period.

17.COMMITTEE AUTHORITY. The Management Planning and Development Committee of the Board of Directors shall have the authority, in its sole discretion, to make any interpretations, determinations, and/or take any administrative actions with respect to the Plan and the Agreement, including without limitation whether any post-termination payments to the Participant shall be deemed severance pay and/or whether a termination was with or without Cause. In the event of any inconsistency between the terms hereof and the provisions of the Plan, the Plan shall govern.

18.GOVERNING LAW. The Agreement and the Option evidenced hereby shall be governed by the laws of Delaware, without giving effect to principles of conflict of laws.

19.ACKNOWLEDGEMENT.     The Agreement shall be effective only upon the Participant’s formal acceptance of the terms and conditions set forth above as required by the Company.

By:	/S/ Laurie P. Havanec
	Executive Vice President, Chief People Officer
	CVS Health Corporation

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EX-10.4

Exhibit 10.4

CVS HEALTH CORPORATION
NONQUALIFIED STOCK OPTION AGREEMENT
	GRANT DATE: %%OPTION_DATE,'Month DD, YYYY'%-%

1.GRANT OF AWARD. Pursuant and subject to the provisions of the 2017 Incentive Compensation Plan of CVS Health Corporation (the “Plan”), on the date set forth above (the “Grant Date”), CVS Health Corporation (the “Company”) has granted and hereby evidences the award to the person named below (the “Participant”), subject to the terms and conditions set forth or incorporated in this Nonqualified Stock Option Agreement (the “Agreement”), the right, and option, to purchase from the Company the aggregate number of shares of common stock ($0.01 par value) of the Company (the “Shares”) set forth below, at the purchase price indicated below (the “Option”), such Option to be exercised as hereinafter provided. The fair market value of the Shares on any date is the closing price of the Company’s common stock on such date (the “FMV”). The Plan is hereby made a part hereof and Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term(s) in the Plan. The Option is a nonqualified option as defined in the Plan.

Participant:	%%FIRST_NAME_MIDDLE_NAME_LAST_NAME%-%
Employee ID:	%%EMPLOYEE_IDENTIFIER%-%
Shares:	%%TOTAL_SHARES_GRANTED%-%
Option Price:	%%OPTION_PRICE,'$999,999,999.99'%-%
Vest Date 1:	%%VEST_DATE_PERIOD1,'Month DD, YYYY'%-%	%%SHARES_PERIOD1%-%
Vest Date 2:	%%VEST_DATE_PERIOD2,'Month DD, YYYY'%-%	%%SHARES_PERIOD2%-%
Vest Date 3:	%%VEST_DATE_PERIOD3,'Month DD, YYYY'%-%	%%SHARES_PERIOD3%-%
Vest Date 4:	%%VEST_DATE_PERIOD4,'Month DD, YYYY'%-%	%%SHARES_PERIOD4%-%

2.TERM OF OPTION. The term of the Option shall be for a period of ten (10) years from the Grant Date, subject to the earlier termination of the Option as set forth in the Plan and in the Agreement, and shall expire on the last day of its term (the “Expiration Date”). No portion of the Option shall be exercisable after the Expiration Date.

3.VESTING AND EXERCISE OF OPTION.

(a)    The Option, subject to the provisions of the Plan, shall be exercised by submitting a request to exercise to the Company’s stock plan administrator, in accordance with the Company’s current exercise policies and procedures, specifying the number of Shares to be purchased, which number may not be less than one hundred (100) Shares (unless the number of Shares purchased is the total balance). An exercise by the Participant of all or part of the Option shall be effected through the Company’s “cashless exercise” procedures. Otherwise, at the time of exercise, Participant shall tender to the Company cash or cash equivalents for the aggregate option price of the Shares, which is the FMV of the Shares as of the Grant Date (the “Option Price”), that the Participant has elected to purchase or certificates for Shares of common stock of the Company owned by the Participant for at

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least six (6) months with a FMV at least equal to the aggregate Option Price of the Shares that the Participant has elected to purchase, or a combination of the foregoing.

(b)    Prior to its expiration or termination and except as otherwise provided herein, the Option will become vested in accordance with the vesting schedule set forth above, each date on which vesting occurs a “Vest Date”, and the Option will be exercisable by the Participant to the extent vested prior to the Expiration Date so long as the Participant has maintained continuous employment with the Company or a subsidiary of the Company from the Grant Date through the exercise date.

(c)    Notwithstanding anything to the contrary in the Agreement or the Plan, the vested and exercisable portion of the Option that remains outstanding on the last business day prior to the Expiration Date (the “Automatic Exercise Date”) shall be deemed to have been automatically exercised by the Participant, without any further action or notice by the Company or the Participant, at such time if: (i) (A) the Participant is employed with the Company or any of its subsidiaries on the Automatic Exercise Date or (B) the Expiration Date would occur while the Option remains exercisable pursuant to Sections 8 and 9 of the Agreement, (ii) the Participant has accepted the Option as required by the Company under Section 4, and (iii) the FMV of a Share on the Automatic Exercise Date exceeds the Option Price. The exercise of the Option pursuant to this Section 3(c) shall be effected through the Company’s “cashless exercise” procedures. Notwithstanding the foregoing, there is no guarantee that an automatic exercise pursuant to this Section 3(c) will be effected on the Participant’s behalf and neither the Company nor any other party will bear any responsibility or liability if such an automatic exercise is not effected and instead the Option expires unexercised. Accordingly, the Participant shall bear sole responsibility for ensuring that the Participant exercises any vested portion of the Option prior to the Expiration Date.For the avoidance of doubt, the Option shall not be deemed automatically exercised pursuant to this Section 3(c) if, on the Automatic Exercise Date, the FMV of a Share is less than or equal to the Option Price.

4.REQUIRED ACCEPTANCE OF AWARD. The Option will not vest or be exercisable unless the Company has received the Participant’s acceptance of the terms and conditions set forth herein prior to the first anniversary of the Grant Date. Acceptance shall be submitted electronically as required by the Company.

5.TAXES. Upon a cashless exercise of the Option the Company shall withhold from the proceeds of the exercise of the Option any required taxes. If the Option is exercised other than through a cashless exercise the Company shall have the right to require the Participant to pay the amount of any withholding taxes immediately, upon notification from the Company, before the proceeds from the exercise of the Option are delivered to the Participant. Furthermore, the Company may elect to deduct such taxes from any other amounts then payable to the Participant by the Company in cash or in Shares or from any other amounts payable any time thereafter to the Participant by the Company to the extent allowed under applicable law.

6.NON-TRANSFERABILITY. The Option shall not be transferable by the Participant other than by will or by the laws of descent and distribution and during the Participant’s lifetime shall be exercised only by the Participant in accordance and subject to the terms and conditions of the Agreement.

7.FORFEITURE OF OPTION UPON TERMINATION OF EMPLOYMENT. Unless otherwise provided for in the Plan or in the Agreement, as of the date on which the Participant’s employment with the Company and its subsidiaries terminates, the Option, to the extent unexercised, whether vested or unvested, as of the Participant’s employment termination date, shall be forfeited immediately in its entirety, provided that, if the Participant’s employment with the Company and its subsidiaries terminates without cause, as determined by the Company in its sole discretion (“Cause”), the Option, to the extent vested and unexercised as of the employment termination date, shall be exercisable at any time on or before the ninetieth (90th) day immediately following the employment termination date and, to the extent the Option is unvested as of the employment termination date, the Option shall be forfeited immediately.

Proprietary 2 Apr_2022_NQ_Award_Agreement

8.INVOLUNTARY TERMINATION OF EMPLOYMENT WITH SEVERANCE. In the event that the Participant’s employment with the Company and its subsidiaries is terminated by the Company without Cause and Participant receives severance pay following the Participant’s employment pursuant to a written agreement approved by the Company, vesting of the Option shall continue through the end of the severance period set forth in the written agreement providing for such severance pay. To the extent vested, the Option shall be exercisable at any time during the severance period and on or before the ninetieth (90th) day following the last day of the severance period, as long as no government regulations or rules are violated by such continued vesting or exercise period; provided, however, that in no event will the Option be exercisable beyond its original term. Any portion of the Option not vested as of the last day of the severance period shall be forfeited as of the last day of the severance period. In the event that the Participant returns to comparable employment with the Company or any subsidiary, as determined by the Company in its sole discretion, prior to the expiration of the severance period, the Participant shall be treated as if the Participant’s employment with the Company or any subsidiary of the Company had continued through the severance period for purposes of determining eligibility for continued vesting (if this occurs, the Participant is required to notify the Plan administrator by electronic mail to: equityadministration@cvshealth.com).

9.QUALIFIED RETIREMENT. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of a Qualified Retirement, Participant (a) shall continue to vest in the Option for a period of three (3) years following the Participant’s retirement date and (b) may exercise the Option, to the extent vested, at any time within the period of three (3) years following the Participant’s retirement date, but not beyond the original term of the Option, in both cases as long as no government regulations or rules are violated by such continued vesting or exercise period. To the extent unvested or unexercised at the end of the three (3) year period following the Participant’s retirement date, the Option shall be forfeited. In the event the Participant’s termination of employment qualifies as a Qualified Retirement and the Participant also enters into a severance agreement with the Company, the terms of this Section 9 shall apply with respect to the vesting and exercise of the Option as of the employment termination date. A “Qualified Retirement” shall mean a termination of employment on or after attainment of age fifty-five (55) with at least ten (10) years of continuous service or attainment of age sixty (60) with at least five (5) years of continuous service, provided that: (i) if the Participant terminates employment voluntarily, the Participant has provided the Company with at least ninety (90) days advance written notice, in accordance with the provisions of Section 14 below, of the Participant’s retirement date or such other term of advance written notice as is determined by the Chief People Officer of the Company; or (ii) if the Company terminates the Participant’s employment, such termination is without Cause.  The Participant shall also be deemed to have experienced a Qualified Retirement if the Company terminates the Participant’s employment without Cause and the Participant shall meet the age and service requirement set forth above during the severance period set forth in a written severance agreement with the Company.

10.DISABILITY. In the event the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of total and permanent disability (as defined in the Company’s Long-Term Disability Plan, or, if not defined in such plan, as defined by the Social Security Administration), the Option shall vest as of the employment termination date on a pro-rata basis as follows: the Option shall vest with respect to a total number of the Shares equal to (i) the number of the Shares subject to the Option on the Grant Date multiplied by the following fraction: (A) the numerator shall be the whole number of months elapsed, as of the employment termination date, since the Grant Date and (B) the denominator shall be the initial number of full months in the period during which vesting is required under the Award , minus (ii) the number of the Shares with respect to which the Option vested prior to the employment termination date (whether or not the Option was previously exercised). For purposes of this calculation, the number of months in the numerator in sub-section (A) above shall include any partial month in which the Participant has been employed. For example, if the time elapsed between the Grant Date and the employment termination date is eight (8) months and five (5) days and the Participant has been employed for such entire period, the numerator in sub-section (A) above shall be nine (9). The Option may be exercised to the extent

Proprietary 3 Apr_2022_NQ_Award_Agreement

vested at any time within one (1) year of the employment termination date but in no event beyond the original term of the Option.

11.DEATH. In the event of the Participant’s employment with the Company and any subsidiary of the Company terminates by reason of the Participant’s death, the Option to the extent not then vested in accordance with Section 3 shall immediately vest and the Option shall remain exercisable for a period of one (1) year after the Participant’s death, or until the Expiration Date, whichever occurs first, by Participant’s Beneficiary. At the end of said one (1) year time period, or as of the Expiration Date if earlier, all rights with respect to the Option shall terminate and the Option shall be cancelled.

12.CHANGE IN CONTROL. In the event of a Change in Control, the applicable provisions of the Plan with respect to a Change in Control shall apply.

13.TRANSFER OF EMPLOYMENT.     Transfer of the Participant’s employment between the Company and a subsidiary of the Company or between subsidiaries of the Company shall not be treated as a termination of employment.

14.NOTICE.

(a)Any notice required to be provided under Section 8 shall be provided by electronic mail to equityadministration@cvshealth.com and shall include “Notice of Reemployment” in the subject line.

(b)A retirement notice required to be given hereunder to the Company under Section 9 shall be in writing, shall include “Retirement Notice” in the subject line, and shall be provided (i) to the Participant’s leader and (ii) to equityadministration@cvshealth.com (if by electronic mail) or CVS Health Corporation, Attention: Senior Director, Executive Compensation, One CVS Drive, Woonsocket, RI 02895 (if by regular mail).

(c)Any notice required to be given hereunder to the Participant shall be addressed to the Participant at the address shown on the records of the Company.

(d)Either party may hereafter designate an alternate address in writing, which designation shall be sent to the addresses provided in this section.

15.RECOUPMENT OF OPTION AWARD. The Option shall be subject to the terms of the Company’s Recoupment Policy as it exists from time to time, which may require the Participant to immediately repay to the Company the value of any pre-tax economic benefit that the Participant may derive from the grant of the Option hereunder. By accepting the grant of the Option hereunder, the Participant acknowledges that a copy of the Company’s Recoupment Policy has been made available for the Participant’s reference.

16.RESTRICTIVE COVENANT AGREEMENT.

(a) The Option granted pursuant to the Agreement is expressly subject to and contingent upon the requirement that the Participant shall have fully executed and delivered to the Company the applicable written agreement containing the restrictive covenants required by the Company in connection with the award hereunder (the “RCA”).

If the Company intends to require the Participant to execute and deliver a new RCA in connection with the grant hereunder, the Company shall provide the new RCA to the Participant and the Participant agrees to execute and deliver the new RCA by the deadline set forth by the Company.  If the Participant is currently subject to an RCA and the Company does not require the Participant to execute and deliver a new RCA, then, by accepting the grant of the Option pursuant to the Agreement, the Participant reaffirms the Participant’s intent to comply with all of the provisions in the Participant’s current RCA.

Proprietary 4 Apr_2022_NQ_Award_Agreement

The Participant agrees that failure to execute and return the new RCA, if required, by the deadline set forth by the Company shall result in the immediate and irrevocable forfeiture of the Option granted hereunder.

(b)    If the Participant violates any provision of the applicable RCA, as determined by the Company in its sole discretion (an “RCA Violation”), (i) the Participant shall immediately and irrevocably forfeit the Option, to the extent unvested, and shall have no right to any payment in connection with such forfeiture; and (ii) with respect to any portion of the Option that vested within the two (2) year period ending on the earlier of (A) the date, as determined in the sole discretion of the Company, of the Participant’s RCA Violation, or (B) the Participant’s termination of employment, the Participant shall forfeit the Option to the extent unexercised and shall be required, upon demand, to repay or otherwise reimburse the Company an amount having a value equal to, with respect to each exercise event, the market value of the Shares subject to the exercise of the Option at the time of exercise minus the Option Price with respect to the Shares subject to the exercise of the Option.

By accepting the grant of the Option under the Agreement, the Participant acknowledges and agrees that the remedy described above does not constitute the exclusive remedy for the Participant’s violation of the RCA and, as the forfeiture and repayment provisions are not adequate remedies at law, the Company may seek any additional legal or equitable remedy, including injunctive relief, for any such violation. The provisions in this section are essential economic conditions to the Company’s grant of the Option to the Participant. By receiving the grant of the Option hereunder, the Participant agrees that the Company and its subsidiaries and affiliates may make deductions from any amounts they may owe the Participant, individually or collectively, from time to time (such as wages or other compensation, deferred compensation credits, vacation pay, severance or other payments owed following a termination of employment, as well as any other amounts owed to the Participant by the Company or its subsidiaries or affiliates) to the extent of any amounts the Participant owes the Company under this section. The provisions of this section and any amounts repayable or reimbursable by the Participant hereunder are intended to be in addition to any rights to repayment the Company may have under Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.

17.LAWS AND POLICIES.

(a)By accepting the grant of the Option under the Agreement, (i) the Participant acknowledges that a copy of the Plan has been made available by the Company for the Participant’s reference and agrees to be bound by the terms and conditions set forth in the Agreement and the Plan as in effect from time to time, (ii) the Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict the Participant’s right to trade Shares, including without limitation, sales of the Shares acquired in connection with the Option, and (iii) the Participant agrees to comply with such Federal securities law requirements and Company policies, as such laws and policies may be amended from time to time.

(b)Neither the execution and delivery hereof nor the grant of the Option evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its subsidiaries to employ the Participant for any specific period.

18.COMMITTEE AUTHORITY. The Management Planning and Development Committee of the Board of Directors shall have the authority, in its sole discretion, to make any interpretations, determinations, and/or take any administrative actions with respect to the Plan and the Agreement, including without limitation whether any post-termination payments to the Participant shall be deemed severance pay and/or whether a termination was with or without Cause. In the event of any inconsistency between the terms hereof and the provisions of the Plan, the Plan shall govern.

19.GOVERNING LAW. The Agreement and the Option evidenced hereby shall be governed by the laws of Delaware, without giving effect to principles of conflict of laws.

Proprietary 5 Apr_2022_NQ_Award_Agreement

20.ACKNOWLEDGEMENT.     The Agreement shall be effective only upon the Participant’s formal acceptance of the terms and conditions set forth above as required by the Company.

By:	/S/ Laurie P. Havanec
	Executive Vice President, Chief People Officer
	CVS Health Corporation

Proprietary 6 Apr_2022_NQ_Award_Agreement

EX-15.1

Exhibit 15.1

Letter re: Unaudited Interim Financial Information

May 4, 2022

To the Shareholders and the Board of Directors of CVS Health Corporation

We are aware of the incorporation by reference in the Registration Statements (Form S-3ASR No. 333-238506 and Form S-8 Nos. 333-238507, 333-230035, 333-228622, 333-167746, 333-217853, 333-208805, 333-141481, 333-139470, 333-63664, 333-91253, 333-49407, 333-34927, and 333-28043) of CVS Health Corporation of our report dated May 4, 2022, relating to the unaudited condensed consolidated interim financial statements of CVS Health Corporation that is included in its Form 10-Q for the quarter ended March 31, 2022.

/s/ Ernst & Young LLP

Boston, Massachusetts

EX-31.1

Exhibit 31.1

Certification

I, Karen S. Lynch, President and Chief Executive Officer of CVS Health Corporation, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of CVS Health Corporation;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2022	/S/     KAREN S. LYNCH
		Karen S. Lynch
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Shawn M. Guertin, Executive Vice President and Chief Financial Officer of CVS Health Corporation, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of CVS Health Corporation;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2022	/S/     SHAWN M. GUERTIN
		Shawn M. Guertin
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

The certification set forth below is being submitted in connection with the Quarterly Report of CVS Health Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2022 (the “Report”) solely for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Karen S. Lynch, President and Chief Executive Officer of the Company, certify that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2022	/S/    KAREN S. LYNCH
		Karen S. Lynch
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION

The certification set forth below is being submitted in connection with the Quarterly Report of CVS Health Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2022 (the “Report”) solely for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Shawn M. Guertin, Executive Vice President and Chief Financial Officer of the Company, certify that, to the best of my knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2022	/S/    SHAWN M. GUERTIN
		Shawn M. Guertin
		Executive Vice President and Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2022	Apr. 27, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
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 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 Common Stock, Shares Outstanding		1,311,309,074
Entity Central Index Key	0000064803
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Premiums	$ 21,631	$ 18,960
Net investment income	168	297
Total revenues	76,826	69,097
Operating costs:
Cost of products sold	45,509	40,894
Benefit costs	17,951	15,704
Operating expenses	9,876	8,922
Total operating costs	73,336	65,520
Operating income	3,490	3,577
Interest expense	586	657
Other income	(42)	(50)
Income before income tax provision	2,946	2,970
Income tax provision	633	746
Net income	2,313	2,224
Net income attributable to noncontrolling interests	(1)	(1)
Net income attributable to CVS Health	$ 2,312	$ 2,223
Net income per share attributable to CVS Health:
Net income per share attributable to CVS Health, basic (in dollars per share)	$ 1.76	$ 1.69
Net income per share attributable to CVS Health, diluted (in dollars per share)	$ 1.74	$ 1.68
Weighted average shares outstanding:
Weighted average basic shares outstanding, basic (in shares)	1,312	1,313
Weighted average diluted shares outstanding, diluted (in shares)	1,328	1,322
Dividends declared per share (in dollars per share)	$ 0.55	$ 0.50
Cost, Product and Service [Extensible List]	Products	Products
Products
Revenues:
Revenues	$ 52,522	$ 47,387
Services
Revenues:
Revenues	$ 2,505	$ 2,453

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 2,313	$ 2,224
Other comprehensive loss, net of tax:
Net unrealized investment losses	(1,155)	(386)
Foreign currency translation adjustments	3	(2)
Net cash flow hedges	(3)	(4)
Other comprehensive loss	(1,155)	(392)
Comprehensive income	1,158	1,832
Comprehensive income attributable to noncontrolling interests	(1)	(1)
Comprehensive income attributable to CVS Health	$ 1,157	$ 1,831

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Assets:
Cash and cash equivalents	$ 8,442	$ 9,408
Investments	2,900	3,117
Accounts receivable, net	26,451	24,431
Inventories	18,160	17,760
Other current assets	5,530	5,292
Total current assets	61,483	60,008
Long-term investments	22,595	23,025
Property and equipment, net	12,844	12,896
Operating lease right-of-use assets	18,801	19,122
Goodwill	79,060	79,121
Intangible assets, net	28,543	29,026
Separate accounts assets	4,670	5,087
Other assets	4,877	4,714
Total assets	232,873	232,999
Liabilities:
Accounts payable	12,738	12,544
Pharmacy claims and discounts payable	18,572	17,330
Health care costs payable	10,260	8,808
Policyholders’ funds	4,138	4,301
Accrued expenses	16,619	17,670
Other insurance liabilities	1,387	1,303
Current portion of operating lease liabilities	1,849	1,646
Current portion of long-term debt	4,217	4,205
Total current liabilities	69,780	67,807
Long-term operating lease liabilities	17,786	18,177
Long-term debt	52,063	51,971
Deferred income taxes	5,829	6,270
Separate accounts liabilities	4,670	5,087
Other long-term insurance liabilities	6,363	6,402
Other long-term liabilities	2,242	1,904
Total liabilities	158,733	157,618
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; 1,747 shares issued and 1,306 shares outstanding at March 31, 2022 and 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and capital surplus	47,677	47,377
Treasury stock, at cost: 441 shares at March 31, 2022 and 422 shares at December 31, 2021	(30,145)	(28,173)
Retained earnings	56,488	54,906
Accumulated other comprehensive income (loss)	(190)	965
Total CVS Health shareholders’ equity	73,830	75,075
Noncontrolling interests	310	306
Total shareholders’ equity	74,140	75,381
Total liabilities and shareholders’ equity	$ 232,873	$ 232,999

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000	100,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	3,200,000,000	3,200,000,000
Common stock, shares issued (in shares)	1,747,000,000	1,744,000,000
Common stock, shares outstanding (in shares)	1,306,000,000	1,322,000,000
Treasury stock (in shares)	441,000,000	422,000,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Cash receipts from customers	$ 74,192	$ 66,487
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(44,365)	(39,171)
Insurance benefits paid	(16,616)	(15,456)
Cash paid to other suppliers and employees	(8,969)	(8,270)
Interest and investment income received	199	222
Interest paid	(782)	(876)
Income taxes paid	(96)	(44)
Net cash provided by operating activities	3,563	2,892
Cash flows from investing activities:
Proceeds from sales and maturities of investments	2,570	2,177
Purchases of investments	(3,474)	(3,131)
Purchases of property and equipment	(1,051)	(829)
Acquisitions (net of cash acquired)	(7)	(84)
Other	(31)	0
Net cash used in investing activities	(1,993)	(1,867)
Cash flows from financing activities:
Net borrowings of short-term debt	0	252
Repayments of long-term debt	(14)	(3,049)
Repurchase of common stock	(2,000)	0
Dividends paid	(722)	(656)
Proceeds from exercise of stock options	297	212
Payments for taxes related to net share settlement of equity awards	(62)	(3)
Other	(149)	59
Net cash used in financing activities	(2,650)	(3,185)
Net decrease in cash, cash equivalents and restricted cash	(1,080)	(2,160)
Cash, cash equivalents and restricted cash at the beginning of the period	12,691	11,043
Cash, cash equivalents and restricted cash at the end of the period	11,611	8,883
Reconciliation of net income to net cash provided by operating activities:
Net income	2,313	2,224
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,055	1,126
Stock-based compensation	89	87
Deferred income taxes and other noncash items	(187)	(166)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(1,967)	(2,093)
Inventories	(400)	879
Other assets	(352)	(286)
Accounts payable and pharmacy claims and discounts payable	1,974	576
Health care costs payable and other insurance liabilities	1,478	294
Other liabilities	(440)	251
Net cash provided by operating activities	$ 3,563	$ 2,892

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions		Total	Total CVS Health Shareholders’ Equity	Common Shares	Treasury Stock		Common Stock and Capital Surplus	[2]	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2020				1,733	(423)	[1]
Balance at beginning of period at Dec. 31, 2020		$ 69,701	$ 69,389		$ (28,178)	[1]	$ 46,513		$ 49,640	$ 1,414	$ 312
Shareholders' Equity [Roll Forward]
Net income		2,224	2,223						2,223		1
Other comprehensive loss		(392)	(392)							(392)
Stock option activity, stock awards and other (in shares)				2
Stock option activity, stock awards and other		214	214				214
ESPP issuances, net of purchase of treasury shares (in shares)	[1]				1
ESPP issuances, net of purchase of treasury shares		76	76		$ 76	[1]
Common stock dividends		(660)	(660)						(660)
Other increases (decreases) in noncontrolling interests		1									1
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2021				1,735	(422)	[1]
Balance at end of period at Mar. 31, 2021		71,164	70,850		$ (28,102)	[1]	46,727		51,203	1,022	314
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021				1,744	(422)	[1]
Balance at beginning of period at Dec. 31, 2021		75,381	75,075		$ (28,173)	[1]	47,377		54,906	965	306
Shareholders' Equity [Roll Forward]
Net income		2,313	2,312						2,312		1
Other comprehensive loss		(1,155)	(1,155)							(1,155)
Stock option activity, stock awards and other (in shares)				3
Stock option activity, stock awards and other		300	300				300
Purchases of treasury shares, net of ESPP issuances (in shares)	[1]				(19)
Purchase of treasury shares, net of ESPP issuances		(1,972)	(1,972)		$ (1,972)	[1]
Common stock dividends		(730)	(730)						(730)
Other increases (decreases) in noncontrolling interests		3									3
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2022				1,747	(441)	[1]
Balance at end of period at Mar. 31, 2022		$ 74,140	$ 73,830		$ (30,145)	[1]	$ 47,677		$ 56,488	$ (190)	$ 310

[1] Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of March 31, 2022 and 2021 and December 31, 2021 and 2020.

[2] Common stock and capital surplus includes the par value of common stock of $17 million as of March 31, 2022 and 2021 and December 31, 2021 and 2020.

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Condensed Consolidated Statements of Shareholders' Equity (Parentheticals) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Statement of Stockholders' Equity [Abstract]
Treasury shares held in trust (in shares)	1	1	1	1
Treasury share held in trust	$ 29	$ 29	$ 29	$ 29
Common stock	$ 17	$ 17	$ 17	$ 17

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Description of Business 

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health” or the “Company”), has more than 9,000 retail locations, more than 1,100 walk-in medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members with expanding specialty pharmacy solutions and a dedicated senior pharmacy care business serving more than one million patients per year. The Company also serves an estimated 35 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.

The coronavirus disease 2019 (“COVID-19”) and its emerging new variants continue to impact the economies of the U.S. and other countries around the world. The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Quarterly Report on Form 10-Q.

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

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. 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 and health information technology products and services. The Health Care Benefits 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.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers.

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 and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. 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 Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. 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 health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of March 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Corporate/Other Segment

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

•Management and administrative expenses to support the Company’s overall operations, 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 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 unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

The unaudited condensed 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.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

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

Restricted Cash

Restricted cash (included in other current assets) on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash (included in other assets) on the unaudited condensed 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 and money market funds.

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	March 31, 2022		December 31, 2021		March 31, 2021
Cash and cash equivalents	$	8,442	$	9,408	$	5,598
Restricted cash (included in other current assets)	2,913		3,065		2,972
Restricted cash (included in other assets)	256		218		313
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	11,611	$	12,691	$	8,883

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net is composed of the following:

In millions	March 31, 2022		December 31, 2021
Trade receivables	$	8,728	$	7,932
Vendor and manufacturer receivables	11,685		10,573
Premium receivables	3,508		2,537
Other receivables	2,530		3,389
Total accounts receivable, net	$	26,451	$	24,431

The Company’s allowance for credit losses was $324 million and $339 million as of March 31, 2022 and December 31, 2021, respectively. When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

Revenue Recognition

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by major source in each segment for the three months ended March 31, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended March 31, 2022
Major goods/services lines:
Pharmacy	$	—	$	39,198	$	19,532	$	—	$	(11,240)	$	47,490
Front Store	—		—		5,313		—		—		5,313
Premiums	21,614		—		—		17		—		21,631
Net investment income (loss)	89		—		(16)		95		—		168
Other	1,406		263		589		14		(48)		2,224
Total	$	23,109	$	39,461	$	25,418	$	126	$	(11,288)	$	76,826
Pharmacy Services distribution channel:
Pharmacy network (1)			$	22,824
Mail choice (2)			16,374
Other			263
Total			$	39,461
Three Months Ended March 31, 2021
Major goods/services lines:
Pharmacy	$	—	$	36,141	$	17,885	$	—	$	(11,074)	$	42,952
Front Store	—		—		4,642		—		—		4,642
Premiums	18,942		—		—		18		—		18,960
Net investment income	148		—		46		103		—		297
Other	1,393		180		701		14		(42)		2,246
Total	$	20,483	$	36,321	$	23,274	$	135	$	(11,116)	$	69,097
Pharmacy Services distribution channel:
Pharmacy network (1)			$	21,893
Mail choice (2)			14,248
Other			180
Total			$	36,321

_____________________________________________

(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.

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 ExtraBucks® Rewards 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:

In millions	March 31, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,728	$	7,932
Contract liabilities (included in accrued expenses)	80		87

During the three months ended March 31, 2022 and 2021, 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:

	Three Months Ended March 31,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	80		93
Redemption and breakage	(87)		(84)
Contract liabilities, end of the period	$	80	$	80

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 $15 million and $9 million in the three months ended March 31, 2022 and 2021, 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, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $21 million and $18 million for pharmaceutical inventory purchases during the three months ended March 31, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

Planned Divestiture of Thailand Health Care Business

In March 2022, the Company reached an agreement to sell its international health care business domiciled in Thailand (“Thailand business”), which is included in the Commercial Business reporting unit within the Health Care Benefits segment. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and, accordingly, the Company recorded a $41 million loss on assets held for sale within the Health Care Benefits segment during the three months ended March 31, 2022. The sale is expected to close in the second quarter of 2022.

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 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. 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, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

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Investments

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Investments

Investments

Total investments at March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,826	$	19,672	$	22,498	$	3,009	$	20,231	$	23,240
Mortgage loans	114		804		918		58		844		902
Other investments	33		2,119		2,152		50		1,950		2,000
Total investments (1)	$	2,973	$	22,595	$	25,568	$	3,117	$	23,025	$	26,142

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(1)Includes current investments of $73 million which have been accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

Debt Securities

Debt securities available for sale at March 31, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Debt securities:
U.S. government securities	$	2,333	$	—	$	2,333	$	21	$	(68)	$	2,286
States, municipalities and political subdivisions	2,526		—		2,526		37		(65)		2,498
U.S. corporate securities	10,005		—		10,005		261		(322)		9,944
Foreign securities	3,049		(42)		3,007		87		(95)		2,999
Residential mortgage-backed securities	910		—		910		5		(48)		867
Commercial mortgage-backed securities	1,284		—		1,284		8		(67)		1,225
Other asset-backed securities	2,706		—		2,706		8		(61)		2,653
Redeemable preferred securities	25		—		25		1		—		26
Total debt securities (1)	$	22,838	$	(42)	$	22,796	$	428	$	(726)	$	22,498
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

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(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At March 31, 2022, debt securities with a fair value of $775 million, gross unrealized capital gains of $38 million and gross unrealized capital losses of $13 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. At March 31, 2022, the Company had debt securities with an allowance for credit losses of $4 million supporting experience-rated products. At December 31, 2021, the Company did not have any debt securities with an allowance for credit losses supporting experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

The net amortized cost and fair value of debt securities at March 31, 2022 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	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,228	$	1,235
One year through five years	7,165		7,038
After five years through ten years	5,128		4,965
Greater than ten years	4,375		4,515
Residential mortgage-backed securities	910		867
Commercial mortgage-backed securities	1,284		1,225
Other asset-backed securities	2,706		2,653
Total	$	22,796	$	22,498

Summarized below are the debt securities the Company held at March 31, 2022 and December 31, 2021 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
March 31, 2022
Debt securities:
U.S. government securities	389	$	1,468	$	65	11	$	49	$	3	400	$	1,517	$	68
States, municipalities and political subdivisions	728	1,159		61		23	44		4		751	1,203		65
U.S. corporate securities	3,907	4,992		278		339	484		44		4,246	5,476		322
Foreign securities	868	1,325		72		114	159		23		982	1,484		95
Residential mortgage-backed securities	239	606		40		26	80		8		265	686		48
Commercial mortgage-backed securities	326	701		50		55	130		17		381	831		67
Other asset-backed securities	1,261	2,246		57		69	97		4		1,330	2,343		61
Redeemable preferred securities	3	4		—		1	3		—		4	7		—
Total debt securities	7,721	$	12,501	$	623	638	$	1,046	$	103	8,359	$	13,547	$	726
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The Company reviewed the securities in the table 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. Unrealized capital losses at March 31, 2022 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of March 31, 2022, 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.

The maturity dates for debt securities in an unrealized capital loss position at March 31, 2022 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	$	2	$	—	$	199	$	1	$	201	$	1
One year through five years	27		1		4,405		193		4,432		194
After five years through ten years	83		6		3,338		217		3,421		223
Greater than ten years	56		4		1,577		128		1,633		132
Residential mortgage-backed securities	4		—		682		48		686		48
Commercial mortgage-backed securities	6		1		825		66		831		67
Other asset-backed securities	14		1		2,329		60		2,343		61
Total	$	192	$	13	$	13,355	$	713	$	13,547	$	726

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three months ended March 31, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended March 31,
In millions	2022		2021
New mortgage loans	$	59	$	47
Mortgage loans fully repaid	35		90
Mortgage loans foreclosed	—		—

The Company assesses mortgage loans on a regular basis for credit impairments, and assigns a credit quality indicator to each loan. The Company’s credit quality indicator is internally developed and categorizes each loan in its portfolio on a scale from 1 to 7. These indicators are based upon several factors, including current loan-to-value ratios, current and future property cash flow, 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 on the Company’s assessments at March 31, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
March 31, 2022
1	$	—	$	—	$	—	$	—	$	—	$	26	$	26
2 to 4	58		255		48		25		66		427		879
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	58	$	255	$	48	$	25	$	69	$	463	$	918
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Net Investment Income

Sources of net investment income for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Debt securities	$	164	$	157
Mortgage loans	11		15
Other investments	77		86
Gross investment income	252		258
Investment expenses	(9)		(8)
Net investment income (excluding net realized capital gains or losses)	243		250
Net realized capital gains (losses) (1)	(75)		47
Net investment income (2)	$	168	$	297

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(1)Net realized capital losses include credit-related and yield-related impairment losses on debt securities of $38 million and $18 million, respectively, in the three months ended March 31, 2022. Net realized capital gains are net of yield-related impairment losses on debt securities of $30 million in the three months ended March 31, 2021. There were no credit-related losses on debt securities in the three months ended March 31, 2021.

(2)Net investment income includes $9 million in each of the three-month periods ended March 31, 2022 and 2021 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 for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Proceeds from sales	$	1,911	$	1,348
Gross realized capital gains	14		22
Gross realized capital losses	35		9

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Fair Value

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

The preparation of the Company’s unaudited condensed 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. The Company’s assets and liabilities carried at fair value have been 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.

For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see Note 4 “Fair Value” in the 2021 Form 10-K.

There were no financial liabilities measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 or December 31, 2021. Financial assets measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
March 31, 2022
Cash and cash equivalents (1)	$	4,601	$	3,872	$	—	$	8,473
Debt securities:
U.S. government securities	2,243		43		—		2,286
States, municipalities and political subdivisions	—		2,498		—		2,498
U.S. corporate securities	—		9,912		32		9,944
Foreign securities	—		2,991		8		2,999
Residential mortgage-backed securities	—		867		—		867
Commercial mortgage-backed securities	—		1,225		—		1,225
Other asset-backed securities	—		2,623		30		2,653
Redeemable preferred securities	—		26		—		26
Total debt securities	2,243		20,185		70		22,498
Equity securities	149		—		60		209
Total	$	6,993	$	24,057	$	130	$	31,180
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

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(1)Includes cash and cash equivalents of $31 million which were accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

During the three months ended March 31, 2022 there were $3 million of transfers out of Level 3. During the three months ended March 31, 2021, there were no transfers into or out of Level 3.

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at March 31, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Mortgage loans	$	918	$	—	$	—	$	892	$	892
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	334		—		—		336		336
Long-term debt	56,280		58,624		—		—		58,624
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

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. Separate Accounts financial assets as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	3	$	193	$	—	$	196	$	2	$	186	$	—	$	188
Debt securities	1,095		2,793		—		3,888		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		500		—		500		—		547		—		547
Total (1)	$	1,098	$	3,487	$	—	$	4,585	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $85 million and $70 million of other receivables at March 31, 2022 and December 31, 2021, respectively.

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Health Care Costs Payable

3 Months Ended

Mar. 31, 2022

Health Care and Other Insurance Liabilities [Abstract]

Health Care Costs Payable

Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	18,536		16,291
Prior years	(676)		(652)
Total incurred health care costs (1)	17,860		15,639
Less: Claims paid
Current year	10,225		9,538
Prior years	6,183		5,767
Total claims paid	16,408		15,305
Add: Premium deficiency reserve	13		7
Other (2)	(13)		—
Health care costs payable, end of the period, net	10,252		8,267
Add: Reinsurance recoverables	8		5
Health care costs payable, end of the period	$	10,260	$	8,272

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(1)Total incurred health care costs for the three months ended March 31, 2022 and 2021 in the table above exclude (i) $13 million and $7 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $19 million and $13 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $59 million and $45 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

(2)As a result of the planned divestiture of the Thailand business, the net assets associated with this business were accounted for as assets held for sale and the associated health care costs payable balance is included in accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022.

The Company’s estimates of prior years’ health care costs payable decreased by $676 million and $652 million, respectively, in the three months ended March 31, 2022 and 2021, 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.

At March 31, 2022, the Company’s liabilities for the ultimate cost of (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 (collectively, “IBNR”) plus expected development on reported claims totaled approximately $7.9 billion. The majority of the Company’s liabilities for IBNR plus expected development on reported claims at March 31, 2022 related to the current year.

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Shareholders' Equity

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Repurchases

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of March 31, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

The 2021 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 2021 Repurchase Program can be modified or terminated by the Board at any time.

During the three months ended March 31, 2022, the Company repurchased approximately 19.1 million shares of common stock for approximately $2.0 billion pursuant to the 2021 Repurchase Program, including share repurchases under the ASR transaction described below. During the three months ended March 31, 2021, the Company did not repurchase any shares of its common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC (“Barclays”). Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022. The ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2022, the Company received approximately 2.7 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $1.5 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in February 2022.

At the time they were received, the initial and final receipt of shares resulted in an immediate reduction of the outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share.

Dividends

The quarterly cash dividend declared by the Board was $0.55 and $0.50 per share in the three months ended March 31, 2022 and 2021, respectively. CVS Health Corporation 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.

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Other Comprehensive Income

3 Months Ended

Mar. 31, 2022

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

Other Comprehensive Income

Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	778	$	1,214
Other comprehensive loss before reclassifications ($(1,405) and $(487) pretax)	(1,230)		(400)
Amounts reclassified from accumulated other comprehensive income ($77 and $17 pretax) (1)	75		14
Other comprehensive loss	(1,155)		(386)
End of period balance	(377)		828
Foreign currency translation adjustments:
Beginning of period balance	—		7
Other comprehensive income (loss) before reclassifications	3		(2)
Other comprehensive income (loss)	3		(2)
End of period balance	3		5
Net cash flow hedges:
Beginning of period balance	222		248
Amounts reclassified from accumulated other comprehensive income ($(4) and $(5) pretax) (2)	(3)		(4)
Other comprehensive loss	(3)		(4)
End of period balance	219		244
Pension and other postretirement benefits:
Beginning of period balance	(35)		(55)
Other comprehensive income	—		—
End of period balance	(35)		(55)
Total beginning of period accumulated other comprehensive income	965		1,414
Total other comprehensive loss	(1,155)		(392)
Total end of period accumulated other comprehensive income (loss)	$	(190)	$	1,022

_____________________________________________

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

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

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Earnings Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Earnings per share is computed using the treasury stock method. Stock options and stock appreciation rights to purchase 2 million and 10 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2022 and 2021, respectively, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

The following is a reconciliation of basic and diluted earnings per share for the respective periods:

	Three Months Ended March 31,
In millions, except per share amounts	2022		2021
Numerator for earnings per share calculation:
Net income attributable to CVS Health	$	2,312	$	2,223
Denominator for earnings per share calculation:
Weighted average shares, basic	1,312		1,313
Restricted stock units and performance stock units	10		6
Stock options and stock appreciation rights	6		3
Weighted average shares, diluted	1,328		1,322
Earnings per share:
Basic	$	1.76	$	1.69
Diluted	$	1.74	$	1.68

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

COVID-19

The COVID-19 pandemic continues to evolve. The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of stimulus legislation as well as other federal, state and local governmental responses to the pandemic. Those primary drivers are beyond the Company’s knowledge and control. As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material. COVID-19 also may result in legal and regulatory proceedings, investigations and claims against the Company.

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, and any significant adverse impact of COVID-19 on such purchasers and/or former subsidiaries increases the risk that the Company will be required to satisfy those obligations. As of March 31, 2022, the Company guaranteed 68 such store leases (excluding the lease guarantees related to Linens ‘n Things, which have been recorded as a liability on the unaudited condensed consolidated balance sheets), 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 and life 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 Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

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 insurance 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, and the risk is heightened by any significant adverse impact of the COVID-19 pandemic on the solvency of other insurers, including long-term care and life insurers. 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.

Litigation and Regulatory Proceedings

The Company has been involved or is currently involved in numerous legal proceedings, including litigation, arbitration, government investigations, audits, reviews and claims. These include routine, regular and special investigations, audits and reviews by the U.S. Centers for Medicare & Medicaid Services (“CMS”), state insurance and health and welfare departments, the U.S. Department of Justice (the “DOJ”), state attorneys general, the U.S. Drug Enforcement Administration (the “DEA”) and other governmental authorities.

Legal proceedings, in general, and securities, class action and multi-district litigation, in particular, and governmental special investigations, audits and reviews can be expensive and disruptive. Some of the litigation matters may purport or be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. The Company also may be named from time to time in qui tam actions initiated by private third parties that could also be separately pursued by a governmental body. The results of legal proceedings, including government investigations, are often uncertain and difficult to predict, and the costs incurred in these matters can be substantial, regardless of the outcome.

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. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s financial position. Substantial unanticipated verdicts, fines and rulings, however, do sometimes occur, which could result in judgments against the Company, entry into settlements or a revision to its expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations. In addition, as a result of governmental investigations or proceedings, the Company may be subject to damages, civil or criminal fines or penalties, or other sanctions including possible suspension or loss of licensure and/or exclusion from

participating in government programs. The outcome of such governmental investigations of proceedings could be material to the Company.

Usual and Customary Pricing Litigation

The Company and certain current and former directors and officers are named as a defendant in a number of lawsuits that allege that the Company’s retail pharmacies overcharged for prescription drugs by not submitting the correct usual and customary price during the claims adjudication process. These actions are brought by a number of different types of plaintiffs, including plan members, private payors, government payors, and shareholders based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. 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.

The Company is facing multiple lawsuits, including by a State Attorney General, governmental subdivisions and several putative class actions, regarding drug pricing and its rebate arrangements with drug manufacturers. These complaints, brought by a number of different types of plaintiffs under a variety of legal theories, generally allege that rebate agreements between the drug manufacturers and PBMs caused inflated prices for certain drug products. The Company is defending itself against these claims. The Company has also received subpoenas, civil investigative demands (“CIDs”) and other requests for documents and information from, and is being investigated by, Attorneys General of several states and the District of Columbia regarding its PBM practices, including pricing and rebates. The Company has been providing documents and information in response to these subpoenas, CIDs and requests for information.

United States ex rel. Behnke v. CVS Caremark Corporation, et al. (U.S. District Court for the Eastern District of Pennsylvania). In April 2018, the Court unsealed a complaint filed in February 2014. The government has declined to intervene in this case. The relator alleges that the Company submitted, or caused to be submitted, to Part D of the Medicare program Prescription Drug Event data and/or Direct and Indirect Remuneration reports that misrepresented true prices paid by the Company’s PBM to pharmacies for drugs dispensed to Part D beneficiaries with prescription benefits administered by the Company’s PBM. The Company is defending itself against these claims.

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 prescription 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 U.S. jurisdictions. The Company has been cooperating with the government with respect to these subpoenas, CIDs and other requests for information. In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; the remedy pursuant to that verdict has not been determined and the Company plans to appeal.

In March 2022, CVS Health Corporation and CVS Pharmacy, Inc. entered into a pending settlement agreement with the State of Florida to resolve claims related to opioid medications dating back more than a decade. Under the terms of the settlement agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, which is to be paid over a period of 18 years. During the three months ended March 31, 2022, the Company recorded a $484 million liability associated with this pending legal settlement.

In January 2020, the DOJ served the Company with a DEA administrative subpoena. The subpoena seeks documents relating to practices with respect to prescription opioids and other controlled substances at CVS pharmacy locations concerning potential

violations of the federal Controlled Substances Act and the federal False Claims Act. In January 2022, the DOJ served the Company with a CID regarding similar subjects. The Company is providing documents and information in response to these matters.

Prescription Processing 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 prescription processing practices, including the following:

U.S. ex rel. Bassan 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 a complaint-in-intervention in this previously sealed qui tam case. The complaint alleges 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.

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 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 out-of-network services and/or otherwise allege that the Company failed to timely or appropriately pay or administer out-of-network 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 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 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 the U.S. Department of Health and Human Services

(“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 or otherwise, including audits of the Company’s minimum medical loss ratio rebates, methodology and/or reports, could be material and could adversely affect the Company’s operating results, cash flows and/or financial condition.

Medicare and Medicaid 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.

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.

Stockholder Matters

Beginning in February 2019, multiple class action complaints, as well as a derivative complaint, were filed by putative plaintiffs against the Company and certain current and former officers and directors. 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. The Company and its current and former officers and directors are defending themselves against these claims. Since filing, several of the cases have been consolidated, and the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), was dismissed with prejudice in February 2021. Plaintiffs have appealed that decision to the First Circuit after their motion for reconsideration was denied. In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford) and In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich) have been stayed pending the outcome of the First Circuit appeal.

In August and September 2020, two class actions under the Employee Retirement Income Security Act of 1974 (“ERISA”) were filed in the U.S. District Court for the District of Connecticut against CVS Health, Aetna Inc. (“Aetna”), and several current and former executives, directors and/or members of Aetna’s Compensation and Talent Management Committee: Radcliffe v. Aetna Inc., et al. and Flaim v. Aetna Inc., et al. The plaintiffs in these cases assert a variety of causes of action premised on allegations that the defendants breached fiduciary duties and engaged in prohibited transactions relating to participants in the Aetna 401(k) Plan’s investment in company stock between December 3, 2017 and February 20, 2019, claiming losses related to the performance of the Company’s LTC business unit. The district court consolidated the actions, and in October 2021, dismissed the consolidated action without prejudice. Plaintiffs filed an amended consolidated complaint, which the Company has moved to dismiss. The Company also received a related document request pursuant to ERISA § 104(b), to which the Company has responded. The Company and its current and former officers and directors are defending themselves against these claims.

In December 2021, the Company received a demand for inspection of books and records pursuant to Delaware Corporation Law Section 220 (the “Demand”). The Demand purports to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids.

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. These other legal proceedings and government actions include claims of or relating to bad faith, medical or professional malpractice, breach of fiduciary duty, claims processing, dispensing of medications, non-compliance with state and federal regulatory regimes, marketing misconduct, denial of or 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 solutions 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.

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Segment Reporting

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has three operating segments, Health Care Benefits, Pharmacy Services and Retail/LTC, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s chief operating decision maker (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, which 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. See the reconciliations of consolidated operating income (GAAP measure) to consolidated 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.

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
March 31, 2022
Revenues from external customers	$	22,997	$	36,196	$	17,434	$	31	$	—	$	76,658
Intersegment revenues	23		3,265		8,000		—		(11,288)		—
Net investment income (loss)	89		—		(16)		95		—		168
Total revenues	23,109		39,461		25,418		126		(11,288)		76,826
Adjusted operating income (loss)	1,751		1,636		1,605		(305)		(204)		4,483
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

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $3.8 billion and $3.4 billion of retail co-payments for the three months ended March 31, 2022 and 2021, 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.

The following are reconciliations of consolidated operating income to adjusted operating income for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Operating income (GAAP measure)	$	3,490	$	3,577
Amortization of intangible assets (1)	468		587
Legal settlement accrual (2)	484		—
Loss on assets held for sale (3)	41		—
Acquisition-related integration costs (4)	—		41
Adjusted operating income	$	4,483	$	4,205

_____________________________________________

(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 unaudited 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, 2022, the legal settlement accrual relates to the pending agreement with the State of Florida, entered into in March 2022, to resolve claims dating back more than a decade related to opioid medications. Under this agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, inclusive of certain legal fees, to be paid over a period of 18 years. The legal settlement accrual is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

(3)During the three months ended March 31, 2022, the loss on assets held for sale relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which is included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded. The sale is expected to close in the second quarter of 2022. The loss on assets held for sale is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Health Care Benefits segment.

(4)During the three months ended March 31, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

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Subsequent Event	3 Months Ended
	Mar. 31, 2022
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventOn April 2, 2022, the Company reached an agreement to sell its Payflex® business, which is reported within the Health Care Benefits segment. Payflex provides services to employers, their employees, and their former employees in the areas of tax-advantaged account reimbursement administration (flexible spending, health reimbursement, health savings, transit and parking), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration and special-member billing administration.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Segment Reporting

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

Health Care Benefits Segment

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers. 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 and health information technology products and services. The Health Care Benefits 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.” In addition, effective January 2022, the Company entered the individual public health insurance exchanges (“Public Exchanges”) in eight states through which it sells Insured plans directly to individual consumers.

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 and mail order pharmacy. In addition, through the Pharmacy Services segment, the Company provides specialty pharmacy and infusion services, clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants. The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers. 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 Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities. 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 health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, COVID-19 and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings. As of March 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

Corporate/Other Segment

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

•Management and administrative expenses to support the Company’s overall operations, 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 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

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of CVS Health and its subsidiaries have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. In accordance with such rules and regulations, certain information and accompanying note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted, although the Company believes the disclosures included herein are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Because of the influence of various factors on the Company’s operations, including business combinations, certain holidays and other seasonal influences, net income for any interim period may not be comparable to the same interim period in previous years or necessarily indicative of income for the full year.

Principles of Consolidation

Principles of Consolidation

The unaudited condensed 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.

The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary beneficiary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a VIE if it is considered to be the primary beneficiary.

Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s unaudited condensed consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.

Reclassifications

Reclassifications

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

Restricted Cash

Restricted CashRestricted cash (included in other current assets) on the unaudited condensed consolidated balance sheets represents funds held on behalf of members, including health savings account funds associated with high deductible health plans. Restricted cash (included in other assets) on the unaudited condensed 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 and money market funds.

Accounts Receivable

Accounts ReceivableAccounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations

Accounts Receivable, Allowance for Credit Losses

When developing an estimate of the Company’s expected credit losses, the Company considers all available relevant information regarding the collectability of cash flows, including historical information, current conditions and reasonable and supportable forecasts of future economic conditions over the contractual life of the receivable. The Company’s accounts receivable are short duration in nature and typically settle in less than 30 days.

Contract Balances

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 ExtraBucks® Rewards 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.

Related Party Transactions

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 $15 million and $9 million in the three months ended March 31, 2022 and 2021, 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, LLC (“Heartland”). Heartland operates several LTC pharmacies in four states. Heartland paid the Company $21 million and $18 million for pharmaceutical inventory purchases during the three months ended March 31, 2022 and 2021, respectively. Additionally, the Company performs certain collection functions for Heartland and then transfers those customer cash collections to Heartland. The Company’s investment in and equity in the earnings of Heartland for all periods presented is immaterial.

New Accounting Pronouncements Not Yet Adopted

New Accounting Pronouncements Not Yet Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued Accounting Standards Update 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. 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, 2022. The Company will adopt the new standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented for changes to the liability for future policy benefits and deferred acquisition costs. While the Company is still evaluating the impact of the new standard on its financial statements, the Company anticipates an increase to its liability for future policy benefits with a corresponding change in accumulated other comprehensive income as a result of updating the rate used to discount the liabilities to reflect the yield for an upper-medium grade fixed-income instrument compared to the Company’s expected investment yield under the existing guidance.

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Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Reconciliation of cash and cash equivalents

The following is a reconciliation of cash and cash equivalents on the unaudited condensed consolidated balance sheets to total cash, cash equivalents and restricted cash on the unaudited condensed consolidated statements of cash flows:

In millions	March 31, 2022		December 31, 2021		March 31, 2021
Cash and cash equivalents	$	8,442	$	9,408	$	5,598
Restricted cash (included in other current assets)	2,913		3,065		2,972
Restricted cash (included in other assets)	256		218		313
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	11,611	$	12,691	$	8,883

Schedule of accounts receivable, net

Accounts receivable, net is composed of the following:

In millions	March 31, 2022		December 31, 2021
Trade receivables	$	8,728	$	7,932
Vendor and manufacturer receivables	11,685		10,573
Premium receivables	3,508		2,537
Other receivables	2,530		3,389
Total accounts receivable, net	$	26,451	$	24,431

Disaggregation of revenue

The following table disaggregates the Company’s revenue by major source in each segment for the three months ended March 31, 2022 and 2021:

In millions	Health Care Benefits		Pharmacy Services		Retail/ LTC		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended March 31, 2022
Major goods/services lines:
Pharmacy	$	—	$	39,198	$	19,532	$	—	$	(11,240)	$	47,490
Front Store	—		—		5,313		—		—		5,313
Premiums	21,614		—		—		17		—		21,631
Net investment income (loss)	89		—		(16)		95		—		168
Other	1,406		263		589		14		(48)		2,224
Total	$	23,109	$	39,461	$	25,418	$	126	$	(11,288)	$	76,826
Pharmacy Services distribution channel:
Pharmacy network (1)			$	22,824
Mail choice (2)			16,374
Other			263
Total			$	39,461
Three Months Ended March 31, 2021
Major goods/services lines:
Pharmacy	$	—	$	36,141	$	17,885	$	—	$	(11,074)	$	42,952
Front Store	—		—		4,642		—		—		4,642
Premiums	18,942		—		—		18		—		18,960
Net investment income	148		—		46		103		—		297
Other	1,393		180		701		14		(42)		2,246
Total	$	20,483	$	36,321	$	23,274	$	135	$	(11,116)	$	69,097
Pharmacy Services distribution channel:
Pharmacy network (1)			$	21,893
Mail choice (2)			14,248
Other			180
Total			$	36,321

_____________________________________________

(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.

Schedule of receivables and contract liabilities from contracts with customers

The following table provides information about receivables and contract liabilities from contracts with customers:

In millions	March 31, 2022		December 31, 2021
Trade receivables (included in accounts receivable, net)	$	8,728	$	7,932
Contract liabilities (included in accrued expenses)	80		87

During the three months ended March 31, 2022 and 2021, 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:

	Three Months Ended March 31,
In millions	2022		2021
Contract liabilities, beginning of the period	$	87	$	71
Rewards earnings and gift card issuances	80		93
Redemption and breakage	(87)		(84)
Contract liabilities, end of the period	$	80	$	80

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Investments (Tables)

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Schedule of Total Investments

Total investments at March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022						December 31, 2021
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	2,826	$	19,672	$	22,498	$	3,009	$	20,231	$	23,240
Mortgage loans	114		804		918		58		844		902
Other investments	33		2,119		2,152		50		1,950		2,000
Total investments (1)	$	2,973	$	22,595	$	25,568	$	3,117	$	23,025	$	26,142

_____________________________________________

(1)Includes current investments of $73 million which have been accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

Schedule of Debt Securities Available For Sale

Debt securities available for sale at March 31, 2022 and December 31, 2021 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2022
Debt securities:
U.S. government securities	$	2,333	$	—	$	2,333	$	21	$	(68)	$	2,286
States, municipalities and political subdivisions	2,526		—		2,526		37		(65)		2,498
U.S. corporate securities	10,005		—		10,005		261		(322)		9,944
Foreign securities	3,049		(42)		3,007		87		(95)		2,999
Residential mortgage-backed securities	910		—		910		5		(48)		867
Commercial mortgage-backed securities	1,284		—		1,284		8		(67)		1,225
Other asset-backed securities	2,706		—		2,706		8		(61)		2,653
Redeemable preferred securities	25		—		25		1		—		26
Total debt securities (1)	$	22,838	$	(42)	$	22,796	$	428	$	(726)	$	22,498
December 31, 2021
Debt securities:
U.S. government securities	$	2,349	$	—	$	2,349	$	70	$	(3)	$	2,416
States, municipalities and political subdivisions	2,947		—		2,947		148		(4)		3,091
U.S. corporate securities	9,093		—		9,093		682		(40)		9,735
Foreign securities	2,821		—		2,821		196		(24)		2,993
Residential mortgage-backed securities	870		—		870		15		(10)		875
Commercial mortgage-backed securities	1,278		—		1,278		44		(12)		1,310
Other asset-backed securities	2,791		—		2,791		14		(13)		2,792
Redeemable preferred securities	25		—		25		3		—		28
Total debt securities (1)	$	22,174	$	—	$	22,174	$	1,172	$	(106)	$	23,240

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At March 31, 2022, debt securities with a fair value of $775 million, gross unrealized capital gains of $38 million and gross unrealized capital losses of $13 million and at December 31, 2021, debt securities with a fair value of $864 million, gross unrealized capital gains of $94 million and gross unrealized capital losses of $2 million were included in total debt securities, but support experience-rated products. At March 31, 2022, the Company had debt securities with an allowance for credit losses of $4 million supporting experience-rated products. At December 31, 2021, the Company did not have any debt securities with an allowance for credit losses supporting experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive income (loss).

Schedule of Net Amortized Cost and Fair Value of Debt Securities by Contractual Maturity

The net amortized cost and fair value of debt securities at March 31, 2022 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	Net Amortized Cost		Fair Value
Due to mature:
Less than one year	$	1,228	$	1,235
One year through five years	7,165		7,038
After five years through ten years	5,128		4,965
Greater than ten years	4,375		4,515
Residential mortgage-backed securities	910		867
Commercial mortgage-backed securities	1,284		1,225
Other asset-backed securities	2,706		2,653
Total	$	22,796	$	22,498

Schedule of Debt Securities In An Unrealized Capital Loss Position

Summarized below are the debt securities the Company held at March 31, 2022 and December 31, 2021 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
March 31, 2022
Debt securities:
U.S. government securities	389	$	1,468	$	65	11	$	49	$	3	400	$	1,517	$	68
States, municipalities and political subdivisions	728	1,159		61		23	44		4		751	1,203		65
U.S. corporate securities	3,907	4,992		278		339	484		44		4,246	5,476		322
Foreign securities	868	1,325		72		114	159		23		982	1,484		95
Residential mortgage-backed securities	239	606		40		26	80		8		265	686		48
Commercial mortgage-backed securities	326	701		50		55	130		17		381	831		67
Other asset-backed securities	1,261	2,246		57		69	97		4		1,330	2,343		61
Redeemable preferred securities	3	4		—		1	3		—		4	7		—
Total debt securities	7,721	$	12,501	$	623	638	$	1,046	$	103	8,359	$	13,547	$	726
December 31, 2021
Debt securities:
U.S. government securities	43	$	242	$	2	10	$	40	$	1	53	$	282	$	3
States, municipalities and political subdivisions	233	428		3		13	33		1		246	461		4
U.S. corporate securities	1,610	2,296		31		165	238		9		1,775	2,534		40
Foreign securities	449	747		20		57	91		4		506	838		24
Residential mortgage-backed securities	165	593		9		10	36		1		175	629		10
Commercial mortgage-backed securities	188	462		7		35	112		5		223	574		12
Other asset-backed securities	1,011	2,030		12		26	31		1		1,037	2,061		13
Redeemable preferred securities	1	2		—		1	3		—		2	5		—
Total debt securities	3,700	$	6,800	$	84	317	$	584	$	22	4,017	$	7,384	$	106

The maturity dates for debt securities in an unrealized capital loss position at March 31, 2022 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	$	2	$	—	$	199	$	1	$	201	$	1
One year through five years	27		1		4,405		193		4,432		194
After five years through ten years	83		6		3,338		217		3,421		223
Greater than ten years	56		4		1,577		128		1,633		132
Residential mortgage-backed securities	4		—		682		48		686		48
Commercial mortgage-backed securities	6		1		825		66		831		67
Other asset-backed securities	14		1		2,329		60		2,343		61
Total	$	192	$	13	$	13,355	$	713	$	13,547	$	726

Schedule of Activity in Mortgage Loan Portfolio

During the three months ended March 31, 2022 and 2021, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended March 31,
In millions	2022		2021
New mortgage loans	$	59	$	47
Mortgage loans fully repaid	35		90
Mortgage loans foreclosed	—		—

Schedule of Mortgage Loan Amortized Cost and Credit Quality Indicator

Based on the Company’s assessments at March 31, 2022 and December 31, 2021, the amortized cost basis of the Company's mortgage loans within each credit quality indicator by year of origination was as follows:

	Amortized Cost Basis by Year of Origination
In millions, except credit quality indicator	2022		2021		2020		2019		2018		Prior		Total
March 31, 2022
1	$	—	$	—	$	—	$	—	$	—	$	26	$	26
2 to 4	58		255		48		25		66		427		879
5 and 6	—		—		—		—		3		10		13
7	—		—		—		—		—		—		—
Total	$	58	$	255	$	48	$	25	$	69	$	463	$	918
December 31, 2021
1			$	—	$	—	$	—	$	—	$	28	$	28
2 to 4			255		48		40		72		446		861
5 and 6			—		—		—		3		10		13
7			—		—		—		—		—		—
Total			$	255	$	48	$	40	$	75	$	484	$	902

Schedule of Net Investment Income

Sources of net investment income for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Debt securities	$	164	$	157
Mortgage loans	11		15
Other investments	77		86
Gross investment income	252		258
Investment expenses	(9)		(8)
Net investment income (excluding net realized capital gains or losses)	243		250
Net realized capital gains (losses) (1)	(75)		47
Net investment income (2)	$	168	$	297

_____________________________________________

(1)Net realized capital losses include credit-related and yield-related impairment losses on debt securities of $38 million and $18 million, respectively, in the three months ended March 31, 2022. Net realized capital gains are net of yield-related impairment losses on debt securities of $30 million in the three months ended March 31, 2021. There were no credit-related losses on debt securities in the three months ended March 31, 2021.

(2)Net investment income includes $9 million in each of the three-month periods ended March 31, 2022 and 2021 related to investments supporting experience-rated products.

Schedule of Proceeds and Related Gross Realized Capital Gains and Losses From the Sale of Debt Securities

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 for the three months ended March 31, 2022 and 2021 were as follows:

	Three Months Ended March 31,
In millions	2022		2021
Proceeds from sales	$	1,911	$	1,348
Gross realized capital gains	14		22
Gross realized capital losses	35		9

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Financial assets measured at fair value on a recurring basis on the condensed consolidated balance sheets at March 31, 2022 and December 31, 2021 were as follows:

In millions	Level 1		Level 2		Level 3		Total
March 31, 2022
Cash and cash equivalents (1)	$	4,601	$	3,872	$	—	$	8,473
Debt securities:
U.S. government securities	2,243		43		—		2,286
States, municipalities and political subdivisions	—		2,498		—		2,498
U.S. corporate securities	—		9,912		32		9,944
Foreign securities	—		2,991		8		2,999
Residential mortgage-backed securities	—		867		—		867
Commercial mortgage-backed securities	—		1,225		—		1,225
Other asset-backed securities	—		2,623		30		2,653
Redeemable preferred securities	—		26		—		26
Total debt securities	2,243		20,185		70		22,498
Equity securities	149		—		60		209
Total	$	6,993	$	24,057	$	130	$	31,180
December 31, 2021
Cash and cash equivalents	$	4,954	$	4,454	$	—	$	9,408
Debt securities:
U.S. government securities	2,372		44		—		2,416
States, municipalities and political subdivisions	—		3,086		5		3,091
U.S. corporate securities	—		9,697		38		9,735
Foreign securities	—		2,983		10		2,993
Residential mortgage-backed securities	—		875		—		875
Commercial mortgage-backed securities	—		1,310		—		1,310
Other asset-backed securities	—		2,789		3		2,792
Redeemable preferred securities	—		28		—		28
Total debt securities	2,372		20,812		56		23,240
Equity securities	114		—		55		169
Total	$	7,440	$	25,266	$	111	$	32,817

_____________________________________________

(1)Includes cash and cash equivalents of $31 million which were accounted for as assets held for sale in connection with the planned divestiture of the Thailand business and are included in other current assets on the unaudited condensed consolidated balance sheet at March 31, 2022.

Fair Value, by Balance Sheet Grouping

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the condensed consolidated balance sheets at adjusted cost or contract value at March 31, 2022 and December 31, 2021 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
Mortgage loans	$	918	$	—	$	—	$	892	$	892
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	334		—		—		336		336
Long-term debt	56,280		58,624		—		—		58,624
December 31, 2021
Assets:
Mortgage loans	$	902	$	—	$	—	$	907	$	907
Equity securities (1)	126		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	5		—		—		5		5
Without a fixed maturity	336		—		—		373		373
Long-term debt	56,176		64,157		—		—		64,157

_____________________________________________

(1)It was not practical to estimate the fair value of these cost-method investments as it represents shares of unlisted companies.

Schedule of Fair Value of Separate Accounts by Major Category of Investment

Separate Accounts financial assets as of March 31, 2022 and December 31, 2021 were as follows:

	March 31, 2022								December 31, 2021
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	3	$	193	$	—	$	196	$	2	$	186	$	—	$	188
Debt securities	1,095		2,793		—		3,888		1,233		3,048		—		4,281
Equity securities	—		1		—		1		—		1		—		1
Common/collective trusts	—		500		—		500		—		547		—		547
Total (1)	$	1,098	$	3,487	$	—	$	4,585	$	1,235	$	3,782	$	—	$	5,017

_____________________________________________

(1)Excludes $85 million and $70 million of other receivables at March 31, 2022 and December 31, 2021, respectively.

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Health Care Costs Payable (Tables)

3 Months Ended

Mar. 31, 2022

Health Care and Other Insurance Liabilities [Abstract]

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following table shows the components of the change in health care costs payable during the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Health care costs payable, beginning of the period	$	8,808	$	7,936
Less: Reinsurance recoverables	8		10
Health care costs payable, beginning of the period, net	8,800		7,926
Add: Components of incurred health care costs
Current year	18,536		16,291
Prior years	(676)		(652)
Total incurred health care costs (1)	17,860		15,639
Less: Claims paid
Current year	10,225		9,538
Prior years	6,183		5,767
Total claims paid	16,408		15,305
Add: Premium deficiency reserve	13		7
Other (2)	(13)		—
Health care costs payable, end of the period, net	10,252		8,267
Add: Reinsurance recoverables	8		5
Health care costs payable, end of the period	$	10,260	$	8,272

_____________________________________________

(1)Total incurred health care costs for the three months ended March 31, 2022 and 2021 in the table above exclude (i) $13 million and $7 million, respectively, for a premium deficiency reserve related to the Company’s Medicaid products, (ii) $19 million and $13 million, respectively, of benefit costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and (iii) $59 million and $45 million, respectively, of benefit costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets.

(2)As a result of the planned divestiture of the Thailand business, the net assets associated with this business were accounted for as assets held for sale and the associated health care costs payable balance is included in accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022.

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Shareholders' Equity (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Share repurchase programs

The following share repurchase program has been authorized by CVS Health Corporation’s Board of Directors (the “Board”):

In billions Authorization Date	Authorized		Remaining as of March 31, 2022
December 9, 2021 (“2021 Repurchase Program”)	$	10.0	$	8.0

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Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2022

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

Schedule of Accumulated Other Comprehensive Income

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Net unrealized investment gains (losses):
Beginning of period balance	$	778	$	1,214
Other comprehensive loss before reclassifications ($(1,405) and $(487) pretax)	(1,230)		(400)
Amounts reclassified from accumulated other comprehensive income ($77 and $17 pretax) (1)	75		14
Other comprehensive loss	(1,155)		(386)
End of period balance	(377)		828
Foreign currency translation adjustments:
Beginning of period balance	—		7
Other comprehensive income (loss) before reclassifications	3		(2)
Other comprehensive income (loss)	3		(2)
End of period balance	3		5
Net cash flow hedges:
Beginning of period balance	222		248
Amounts reclassified from accumulated other comprehensive income ($(4) and $(5) pretax) (2)	(3)		(4)
Other comprehensive loss	(3)		(4)
End of period balance	219		244
Pension and other postretirement benefits:
Beginning of period balance	(35)		(55)
Other comprehensive income	—		—
End of period balance	(35)		(55)
Total beginning of period accumulated other comprehensive income	965		1,414
Total other comprehensive loss	(1,155)		(392)
Total end of period accumulated other comprehensive income (loss)	$	(190)	$	1,022

_____________________________________________

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

(2)Amounts reclassified from accumulated other comprehensive income for specifically identified cash flow hedges are included in interest expense in the unaudited condensed consolidated statements of operations. The Company expects to reclassify approximately $11 million, net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

The following is a reconciliation of basic and diluted earnings per share for the respective periods:

	Three Months Ended March 31,
In millions, except per share amounts	2022		2021
Numerator for earnings per share calculation:
Net income attributable to CVS Health	$	2,312	$	2,223
Denominator for earnings per share calculation:
Weighted average shares, basic	1,312		1,313
Restricted stock units and performance stock units	10		6
Stock options and stock appreciation rights	6		3
Weighted average shares, diluted	1,328		1,322
Earnings per share:
Basic	$	1.76	$	1.69
Diluted	$	1.74	$	1.68

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

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
March 31, 2022
Revenues from external customers	$	22,997	$	36,196	$	17,434	$	31	$	—	$	76,658
Intersegment revenues	23		3,265		8,000		—		(11,288)		—
Net investment income (loss)	89		—		(16)		95		—		168
Total revenues	23,109		39,461		25,418		126		(11,288)		76,826
Adjusted operating income (loss)	1,751		1,636		1,605		(305)		(204)		4,483
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

_____________________________________________

(1)Total revenues of the Pharmacy Services segment include approximately $3.8 billion and $3.4 billion of retail co-payments for the three months ended March 31, 2022 and 2021, 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 months ended March 31, 2022 and 2021:

	Three Months Ended March 31,
In millions	2022		2021
Operating income (GAAP measure)	$	3,490	$	3,577
Amortization of intangible assets (1)	468		587
Legal settlement accrual (2)	484		—
Loss on assets held for sale (3)	41		—
Acquisition-related integration costs (4)	—		41
Adjusted operating income	$	4,483	$	4,205

_____________________________________________

(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 unaudited 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, 2022, the legal settlement accrual relates to the pending agreement with the State of Florida, entered into in March 2022, to resolve claims dating back more than a decade related to opioid medications. Under this agreement, CVS Health Corporation will settle all opioid claims against it and its subsidiaries by the State of Florida for $484 million, inclusive of certain legal fees, to be paid over a period of 18 years. The legal settlement accrual is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

(3)During the three months ended March 31, 2022, the loss on assets held for sale relates to the Commercial Business reporting unit within the Health Care Benefits segment. In March 2022, the Company reached an agreement to sell its Thailand business, which is included in the Commercial Business reporting unit. At that time, a portion of the Commercial Business goodwill was specifically allocated to the Thailand business. The net assets of the Thailand business were accounted for as assets held for sale and included in other current assets and accrued expenses on the unaudited condensed consolidated balance sheet at March 31, 2022. The carrying value of the Thailand business was determined to be greater than its fair value and a loss on assets held for sale was recorded. The sale is expected to close in the second quarter of 2022. The loss on assets held for sale is reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Health Care Benefits segment.

(4)During the three months ended March 31, 2021, acquisition-related integration costs relate to the acquisition of Aetna. The acquisition-related integration costs are reflected in the unaudited condensed consolidated statement of operations in operating expenses within the Corporate/Other segment.

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Significant Accounting Policies - Narrative (Details) people in Millions, patient in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($) people Segment store clinic state patient	Mar. 31, 2021 USD ($)
Significant Accounting Policies [Line Items]
Number of pharmacy plan members | people	110
Number of patients served per year | patient	1
Number of reportable segments | Segment	4
Expenses from transactions with related party	$ 15	$ 9
Other revenues from transactions with related party	21	18
Loss on assets held for sale	$ 41	$ 0
Heartland Healthcare Services
Significant Accounting Policies [Line Items]
Number of states in which entity operates | state	4
Retail/ LTC
Significant Accounting Policies [Line Items]
Number of retail locations (more than) | store	9,000
Number of walk in medical clinics | clinic	1,100
Health Care Benefits
Significant Accounting Policies [Line Items]
Number of people served | people	35
Number of states in which the Company has entered the individual public health insurance exchange | state	8
Loss on assets held for sale	$ 41

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Significant Accounting Policies - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Cash and cash equivalents	$ 8,442	$ 9,408	$ 5,598
Restricted cash (included in other current assets)	2,913	3,065	2,972
Restricted cash (included in other assets)	256	218	313
Total cash, cash equivalents and restricted cash in the statements of cash flows	$ 11,611	$ 12,691	$ 8,883	$ 11,043

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Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Trade receivables	$ 8,728	$ 7,932
Vendor and manufacturer receivables	11,685	10,573
Premium receivables	3,508	2,537
Other receivables	2,530	3,389
Total accounts receivable, net	26,451	24,431
Allowance for credit losses	$ 324	$ 339

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Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 76,658	$ 68,800
Net investment income (loss)	168	297
Total revenues	76,826	69,097
Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	47,490	42,952
Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,313	4,642
Premiums
Disaggregation of Revenue [Line Items]
Revenues	21,631	18,960
Other
Disaggregation of Revenue [Line Items]
Revenues	2,224	2,246
Health Care Benefits
Disaggregation of Revenue [Line Items]
Total revenues	23,109	20,483
Pharmacy Services
Disaggregation of Revenue [Line Items]
Total revenues	39,461	36,321
Retail/ LTC
Disaggregation of Revenue [Line Items]
Total revenues	25,418	23,274
Operating Segments | Health Care Benefits
Disaggregation of Revenue [Line Items]
Revenues	22,997	20,315
Net investment income (loss)	89	148
Total revenues	23,109	20,483
Operating Segments | Health Care Benefits | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	0	0
Operating Segments | Health Care Benefits | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0
Operating Segments | Health Care Benefits | Premiums
Disaggregation of Revenue [Line Items]
Revenues	21,614	18,942
Operating Segments | Health Care Benefits | Other
Disaggregation of Revenue [Line Items]
Revenues	1,406	1,393
Operating Segments | Pharmacy Services
Disaggregation of Revenue [Line Items]
Revenues	36,196	33,313
Net investment income (loss)	0	0
Total revenues	39,461	36,321
Operating Segments | Pharmacy Services | Pharmacy network
Disaggregation of Revenue [Line Items]
Total revenues	22,824	21,893
Operating Segments | Pharmacy Services | Mail choice
Disaggregation of Revenue [Line Items]
Total revenues	16,374	14,248
Operating Segments | Pharmacy Services | Other
Disaggregation of Revenue [Line Items]
Total revenues	263	180
Operating Segments | Pharmacy Services | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	39,198	36,141
Operating Segments | Pharmacy Services | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0
Operating Segments | Pharmacy Services | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0
Operating Segments | Pharmacy Services | Other
Disaggregation of Revenue [Line Items]
Revenues	263	180
Operating Segments | Retail/ LTC
Disaggregation of Revenue [Line Items]
Revenues	17,434	15,140
Net investment income (loss)	(16)	46
Total revenues	25,418	23,274
Operating Segments | Retail/ LTC | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	19,532	17,885
Operating Segments | Retail/ LTC | Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,313	4,642
Operating Segments | Retail/ LTC | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0
Operating Segments | Retail/ LTC | Other
Disaggregation of Revenue [Line Items]
Revenues	589	701
Corporate/ Other
Disaggregation of Revenue [Line Items]
Revenues	31	32
Net investment income (loss)	95	103
Total revenues	126	135
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	17	18
Corporate/ Other | Other
Disaggregation of Revenue [Line Items]
Revenues	14	14
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Net investment income (loss)	0	0
Total revenues	(11,288)	(11,116)
Intersegment Eliminations | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	(11,240)	(11,074)
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	$ (48)	$ (42)

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Significant Accounting Policies - Receivables and Contracted Balances (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Trade receivables (included in accounts receivable, net)	$ 8,728	$ 7,932
Contract liabilities (included in accrued expenses)	$ 80	$ 87	$ 80	$ 71

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Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Change in Contract with Customer, Liability [Roll Forward]
Contract liabilities, beginning of the period	$ 87	$ 71
Rewards earnings and gift card issuances	80	93
Redemption and breakage	(87)	(84)
Contract liabilities, end of the period	$ 80	$ 80

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Investments - Total Investment Schedule (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Total Investments [Line Items]
Current	$ 2,973	$ 3,117
Long-term	22,595	23,025
Total	25,568	26,142
Thailand Business
Total Investments [Line Items]
Current investments accounted for as assets held for sale	73
Debt securities available for sale
Total Investments [Line Items]
Current	2,826	3,009
Long-term	19,672	20,231
Total	22,498	23,240
Mortgage loans
Total Investments [Line Items]
Current	114	58
Long-term	804	844
Total	918	902
Other investments
Total Investments [Line Items]
Current	33	50
Long-term	2,119	1,950
Total	$ 2,152	$ 2,000

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Investments - Debt Securities (Details) - USD ($)	Mar. 31, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	$ 22,838,000,000	$ 22,174,000,000
Allowance for Credit Losses	(42,000,000)	0
Net Amortized Cost	22,796,000,000	22,174,000,000
Gross Unrealized Gains	428,000,000	1,172,000,000
Gross Unrealized Losses	(726,000,000)	(106,000,000)
Fair Value	22,498,000,000	23,240,000,000
Supporting experience-rated products
Debt Securities, Available-for-sale [Line Items]
Allowance for Credit Losses	(4,000,000)	0
Gross Unrealized Gains	38,000,000	94,000,000
Gross Unrealized Losses	(13,000,000)	(2,000,000)
Fair Value	775,000,000	864,000,000
U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,333,000,000	2,349,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	2,333,000,000	2,349,000,000
Gross Unrealized Gains	21,000,000	70,000,000
Gross Unrealized Losses	(68,000,000)	(3,000,000)
Fair Value	2,286,000,000	2,416,000,000
States, municipalities and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,526,000,000	2,947,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	2,526,000,000	2,947,000,000
Gross Unrealized Gains	37,000,000	148,000,000
Gross Unrealized Losses	(65,000,000)	(4,000,000)
Fair Value	2,498,000,000	3,091,000,000
U.S. corporate securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	10,005,000,000	9,093,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	10,005,000,000	9,093,000,000
Gross Unrealized Gains	261,000,000	682,000,000
Gross Unrealized Losses	(322,000,000)	(40,000,000)
Fair Value	9,944,000,000	9,735,000,000
Foreign securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	3,049,000,000	2,821,000,000
Allowance for Credit Losses	(42,000,000)	0
Net Amortized Cost	3,007,000,000	2,821,000,000
Gross Unrealized Gains	87,000,000	196,000,000
Gross Unrealized Losses	(95,000,000)	(24,000,000)
Fair Value	2,999,000,000	2,993,000,000
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	910,000,000	870,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	910,000,000	870,000,000
Gross Unrealized Gains	5,000,000	15,000,000
Gross Unrealized Losses	(48,000,000)	(10,000,000)
Fair Value	867,000,000	875,000,000
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	1,284,000,000	1,278,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	1,284,000,000	1,278,000,000
Gross Unrealized Gains	8,000,000	44,000,000
Gross Unrealized Losses	(67,000,000)	(12,000,000)
Fair Value	1,225,000,000	1,310,000,000
Other asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,706,000,000	2,791,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	2,706,000,000	2,791,000,000
Gross Unrealized Gains	8,000,000	14,000,000
Gross Unrealized Losses	(61,000,000)	(13,000,000)
Fair Value	2,653,000,000	2,792,000,000
Redeemable preferred securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	25,000,000	25,000,000
Allowance for Credit Losses	0	0
Net Amortized Cost	25,000,000	25,000,000
Gross Unrealized Gains	1,000,000	3,000,000
Gross Unrealized Losses	0	0
Fair Value	$ 26,000,000	$ 28,000,000

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Investments - Debt Securities by Maturity (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Net Amortized Cost
Less than one year	$ 1,228
One year through five years	7,165
After five years through ten years	5,128
Greater than ten years	4,375
Net Amortized Cost	22,796	$ 22,174
Fair Value
Less than one year	1,235
One year through five years	7,038
After five years through ten years	4,965
Greater than ten years	4,515
Total	22,498	23,240
Residential mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	910
Net Amortized Cost	910	870
Fair Value
Debt securities, maturity, without single maturity date	867
Total	867	875
Commercial mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	1,284
Net Amortized Cost	1,284	1,278
Fair Value
Debt securities, maturity, without single maturity date	1,225
Total	1,225	1,310
Other asset-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	2,706
Net Amortized Cost	2,706	2,791
Fair Value
Debt securities, maturity, without single maturity date	2,653
Total	$ 2,653	$ 2,792

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Investments - Unrealized Loss Position (Details) $ in Millions	Mar. 31, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Number of Securities
Number of Securities, Less than 12 months | security	7,721	3,700
Number of Securities, Greater than 12 months | security	638	317
Number of Securities | security	8,359	4,017
Fair Value
Fair Value, Less than 12 months	$ 12,501	$ 6,800
Fair Value, Greater than 12 months	1,046	584
Fair Value	13,547	7,384
Unrealized Losses
Unrealized Losses, Less than 12 months	623	84
Unrealized Losses, Greater than 12 months	103	22
Unrealized Losses	$ 726	$ 106
U.S. government securities
Number of Securities
Number of Securities, Less than 12 months | security	389	43
Number of Securities, Greater than 12 months | security	11	10
Number of Securities | security	400	53
Fair Value
Fair Value, Less than 12 months	$ 1,468	$ 242
Fair Value, Greater than 12 months	49	40
Fair Value	1,517	282
Unrealized Losses
Unrealized Losses, Less than 12 months	65	2
Unrealized Losses, Greater than 12 months	3	1
Unrealized Losses	$ 68	$ 3
States, municipalities and political subdivisions
Number of Securities
Number of Securities, Less than 12 months | security	728	233
Number of Securities, Greater than 12 months | security	23	13
Number of Securities | security	751	246
Fair Value
Fair Value, Less than 12 months	$ 1,159	$ 428
Fair Value, Greater than 12 months	44	33
Fair Value	1,203	461
Unrealized Losses
Unrealized Losses, Less than 12 months	61	3
Unrealized Losses, Greater than 12 months	4	1
Unrealized Losses	$ 65	$ 4
U.S. corporate securities
Number of Securities
Number of Securities, Less than 12 months | security	3,907	1,610
Number of Securities, Greater than 12 months | security	339	165
Number of Securities | security	4,246	1,775
Fair Value
Fair Value, Less than 12 months	$ 4,992	$ 2,296
Fair Value, Greater than 12 months	484	238
Fair Value	5,476	2,534
Unrealized Losses
Unrealized Losses, Less than 12 months	278	31
Unrealized Losses, Greater than 12 months	44	9
Unrealized Losses	$ 322	$ 40
Foreign securities
Number of Securities
Number of Securities, Less than 12 months | security	868	449
Number of Securities, Greater than 12 months | security	114	57
Number of Securities | security	982	506
Fair Value
Fair Value, Less than 12 months	$ 1,325	$ 747
Fair Value, Greater than 12 months	159	91
Fair Value	1,484	838
Unrealized Losses
Unrealized Losses, Less than 12 months	72	20
Unrealized Losses, Greater than 12 months	23	4
Unrealized Losses	$ 95	$ 24
Residential mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	239	165
Number of Securities, Greater than 12 months | security	26	10
Number of Securities | security	265	175
Fair Value
Fair Value, Less than 12 months	$ 606	$ 593
Fair Value, Greater than 12 months	80	36
Fair Value	686	629
Unrealized Losses
Unrealized Losses, Less than 12 months	40	9
Unrealized Losses, Greater than 12 months	8	1
Unrealized Losses	$ 48	$ 10
Commercial mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	326	188
Number of Securities, Greater than 12 months | security	55	35
Number of Securities | security	381	223
Fair Value
Fair Value, Less than 12 months	$ 701	$ 462
Fair Value, Greater than 12 months	130	112
Fair Value	831	574
Unrealized Losses
Unrealized Losses, Less than 12 months	50	7
Unrealized Losses, Greater than 12 months	17	5
Unrealized Losses	$ 67	$ 12
Other asset-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	1,261	1,011
Number of Securities, Greater than 12 months | security	69	26
Number of Securities | security	1,330	1,037
Fair Value
Fair Value, Less than 12 months	$ 2,246	$ 2,030
Fair Value, Greater than 12 months	97	31
Fair Value	2,343	2,061
Unrealized Losses
Unrealized Losses, Less than 12 months	57	12
Unrealized Losses, Greater than 12 months	4	1
Unrealized Losses	$ 61	$ 13
Redeemable preferred securities
Number of Securities
Number of Securities, Less than 12 months | security	3	1
Number of Securities, Greater than 12 months | security	1	1
Number of Securities | security	4	2
Fair Value
Fair Value, Less than 12 months	$ 4	$ 2
Fair Value, Greater than 12 months	3	3
Fair Value	7	5
Unrealized Losses
Unrealized Losses, Less than 12 months	0	0
Unrealized Losses, Greater than 12 months	0	0
Unrealized Losses	$ 0	$ 0

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Investments - Unrealized Loss Position Maturities (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value
Less than one year	$ 201
One year through five years	4,432
After five years through ten years	3,421
Greater than ten years	1,633
Fair Value	13,547	$ 7,384
Unrealized Losses
Less than one year	1
One year through five years	194
After five years through ten years	223
Greater than ten years	132
Unrealized Losses	726	106
Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	686
Fair Value	686	629
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	48
Unrealized Losses	48	10
Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	831
Fair Value	831	574
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	67
Unrealized Losses	67	12
Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,343
Fair Value	2,343	2,061
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	61
Unrealized Losses	61	$ 13
Supporting experience-rated products
Fair Value
Less than one year	2
One year through five years	27
After five years through ten years	83
Greater than ten years	56
Fair Value	192
Unrealized Losses
Less than one year	0
One year through five years	1
After five years through ten years	6
Greater than ten years	4
Unrealized Losses	13
Supporting experience-rated products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	4
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	6
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	1
Supporting experience-rated products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	14
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	1
Supporting remaining products
Fair Value
Less than one year	199
One year through five years	4,405
After five years through ten years	3,338
Greater than ten years	1,577
Fair Value	13,355
Unrealized Losses
Less than one year	1
One year through five years	193
After five years through ten years	217
Greater than ten years	128
Unrealized Losses	713
Supporting remaining products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	682
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	48
Supporting remaining products | Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	825
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	66
Supporting remaining products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,329
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	$ 60

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Investments - Mortgage Loans (Details) - Commercial Real Estate - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Mortgage Loans on Real Estate [Line Items]
New mortgage loans	$ 59	$ 47
Mortgage loans fully repaid	35	90
Mortgage loans foreclosed	$ 0	$ 0

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Investments - Mortgage Loans Credit Ratings Indicator (Details) - Commercial Real Estate - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 918	$ 902
1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	26	28
2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	879	861
5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	13	13
7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2022
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	58
2022 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2022 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	58
2022 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2022 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2021
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	255	255
2021 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2021 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	255	255
2021 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2021 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	48	48
2020 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	48	48
2020 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	25	40
2019 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	25	40
2019 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2019 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2018
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	69	75
2018 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2018 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	66	72
2018 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	3	3
2018 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
Prior
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	463	484
Prior | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	26	28
Prior | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	427	446
Prior | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	10	10
Prior | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 0	$ 0

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Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 252	$ 258
Investment expenses	(9)	(8)
Net investment income (excluding net realized capital gains or losses)	243	250
Net realized capital gains (losses)	(75)	47
Net investment income	168	297
Yield-related impairment loss	18	30
Credit-related impairment loss	38	0
Supporting experience-rated products
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income	9	9
Debt securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	164	157
Mortgage loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	11	15
Other investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 77	$ 86

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Investments - Realized Gains (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Investments [Abstract]
Proceeds from sales	$ 1,911	$ 1,348
Gross realized capital gains	14	22
Gross realized capital losses	$ 35	$ 9

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Fair Value - Measurement on a Recurring Basis (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 22,498	$ 23,240
Thailand Business
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents accounted for as assets held for sale	31
U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,286	2,416
States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,498	3,091
U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	9,944	9,735
Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,999	2,993
Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	867	875
Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,225	1,310
Other asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,653	2,792
Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	26	28
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities measured at fair value on a recurring basis	0	0
Cash and cash equivalents	8,473	9,408
Debt securities	22,498	23,240
Equity securities	209	169
Total	31,180	32,817
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	4,601	4,954
Debt securities	2,243	2,372
Equity securities	149	114
Total	6,993	7,440
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	3,872	4,454
Debt securities	20,185	20,812
Equity securities	0	0
Total	24,057	25,266
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Debt securities	70	56
Equity securities	60	55
Total	130	111
Recurring | U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,286	2,416
Recurring | U.S. government securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,243	2,372
Recurring | U.S. government securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	43	44
Recurring | U.S. government securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,498	3,091
Recurring | States, municipalities and political subdivisions | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | States, municipalities and political subdivisions | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,498	3,086
Recurring | States, municipalities and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	5
Recurring | U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	9,944	9,735
Recurring | U.S. corporate securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | U.S. corporate securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	9,912	9,697
Recurring | U.S. corporate securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	32	38
Recurring | Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,999	2,993
Recurring | Foreign securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Foreign securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,991	2,983
Recurring | Foreign securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8	10
Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	867	875
Recurring | Residential mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Residential mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	867	875
Recurring | Residential mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,225	1,310
Recurring | Commercial mortgage-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Commercial mortgage-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,225	1,310
Recurring | Commercial mortgage-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Other asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,653	2,792
Recurring | Other asset-backed securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Other asset-backed securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,623	2,789
Recurring | Other asset-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	30	3
Recurring | Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	26	28
Recurring | Redeemable preferred securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Redeemable preferred securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	26	28
Recurring | Redeemable preferred securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 0	$ 0

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Fair Value - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Financial Position [Abstract]
Transfers out of Level 3	$ 3,000,000	$ 0

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Fair Value - Carrying Value and Fair Value Classified by Level (Details) - Nonrecurring - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Carrying Value
Assets:
Mortgage loans	$ 918	$ 902
Equity securities	126	126
Liabilities:
Investment contracts liabilities with a fixed maturity	5	5
Investment contracts liabilities without a fixed maturity	334	336
Long-term debt	56,280	56,176
Estimated Fair Value
Assets:
Mortgage loans	892	907
Liabilities:
Investment contracts liabilities with a fixed maturity	5	5
Investment contracts liabilities without a fixed maturity	336	373
Long-term debt	58,624	64,157
Level 1 | Estimated Fair Value
Assets:
Mortgage loans	0	0
Liabilities:
Investment contracts liabilities with a fixed maturity	0	0
Investment contracts liabilities without a fixed maturity	0	0
Long-term debt	58,624	64,157
Level 2 | Estimated Fair Value
Assets:
Mortgage loans	0	0
Liabilities:
Investment contracts liabilities with a fixed maturity	0	0
Investment contracts liabilities without a fixed maturity	0	0
Long-term debt	0	0
Level 3 | Estimated Fair Value
Assets:
Mortgage loans	892	907
Liabilities:
Investment contracts liabilities with a fixed maturity	5	5
Investment contracts liabilities without a fixed maturity	336	373
Long-term debt	$ 0	$ 0

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Fair Value - Separate Accounts Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 4,670	$ 5,087
Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	4,585	5,017
Recurring | Other Receivables
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	85	70
Recurring | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	196	188
Recurring | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3,888	4,281
Recurring | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1	1
Recurring | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	500	547
Recurring | Level 1
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,098	1,235
Recurring | Level 1 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3	2
Recurring | Level 1 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,095	1,233
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	3,487	3,782
Recurring | Level 2 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	193	186
Recurring | Level 2 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,793	3,048
Recurring | Level 2 | Equity securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1	1
Recurring | Level 2 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	500	547
Recurring | Level 3
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	0	0
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	0
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

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Health Care Costs Payable - Components of Change in Health Care Costs Payable (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period, net	$ 8,808
Less: Claims paid
Health care costs payable, end of the period, net	10,260
Health Care Benefits
Less: Claims paid
Benefit costs recorded in other insurance liabilities	19	$ 13
Corporate / Other
Less: Claims paid
Benefit costs recorded in other insurance liabilities	59	45
Health Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period	8,808	7,936
Less: Reinsurance recoverables	8	10
Health care costs payable, beginning of the period, net	8,800	7,926
Add: Components of incurred health care costs
Current year	18,536	16,291
Prior years	(676)	(652)
Total incurred health care costs	17,860	15,639
Less: Claims paid
Current year	10,225	9,538
Prior years	6,183	5,767
Total claims paid	16,408	15,305
Add: Premium deficiency reserve	13	7
Health care costs payable, end of the period, net	10,252	8,267
Add: Reinsurance recoverables	8	5
Health care costs payable, end of the period	10,260	8,272
Premium deficiency reserve	13	7
Health Insurance Product Line | Thailand Business
Less: Claims paid
Other	$ (13)	$ 0

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Health Care Costs Payable - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred but not reported (IBNR) claims liability, net	$ 7,900
Health Insurance Product Line
Liability for Claims and Claims Adjustment Expense [Line Items]
Decrease in prior years' healthcare costs payable	$ (676)	$ (652)

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Shareholders' Equity - Share Repurchases (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 09, 2021
Equity, Class of Treasury Stock [Line Items]
Stock repurchased during period (in shares)		0
2021 Repurchase Program
Equity, Class of Treasury Stock [Line Items]
Stock repurchase program, authorized amount			$ 10,000,000,000.0
Stock repurchase program, remaining authorized repurchase amount	$ 8,000,000,000.0
Stock repurchased during period (in shares)	19,100,000
Stock repurchased during period, value	$ 2,000,000,000

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Shareholders' Equity - Accelerated Share Repurchases (Details) - 2021 ASR - Barclays Bank - USD ($) $ / shares in Units, shares in Millions, $ in Billions	Jan. 04, 2022	Feb. 28, 2022
Equity, Class of Treasury Stock [Line Items]
ASR agreement, amount	$ 1.5	$ 1.5
Payments for ASR, amount	$ 1.5
ASR percent of notional amount received in shares	80.00%
Shares repurchased under ASR agreement (in shares)	11.6	2.7
Share price (in dollars per share)	$ 103.34
Transfer of shares to treasury stock value	$ 1.2
ASR, shares to be received at the end of program as a percent of notional amount		20.00%
Forward contract
Equity, Class of Treasury Stock [Line Items]
Forward contract, notional amount	$ 0.3

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Shareholders' Equity - Dividends (Details) - $ / shares	Mar. 31, 2022	Mar. 31, 2021
Equity [Abstract]
Cash dividend declared (USD per share)	$ 0.55	$ 0.50

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Other Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	$ 75,381	$ 69,701
Other comprehensive loss	(1,155)	(392)
Balance at end of period	74,140	71,164
Net unrealized investment gains (losses)
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	778	1,214
Other comprehensive income (loss) before reclassifications, net of tax	(1,230)	(400)
Amounts reclassified from accumulated other comprehensive income, net of tax	75	14
Other comprehensive loss	(1,155)	(386)
Balance at end of period	(377)	828
OCI before reclassifications, pre-tax	(1,405)	(487)
Amounts reclassified, pre-tax	77	17
Foreign currency translation adjustments
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	0	7
Other comprehensive income (loss) before reclassifications, net of tax	3	(2)
Other comprehensive loss	3	(2)
Balance at end of period	3	5
Net cash flow hedges
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	222	248
Amounts reclassified from accumulated other comprehensive income, net of tax	(3)	(4)
Other comprehensive loss	(3)	(4)
Balance at end of period	219	244
Amounts reclassified, pre-tax	(4)	(5)
Amount expected to be reclassified	11
Pension and other postretirement benefits
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(35)	(55)
Other comprehensive loss	0	0
Balance at end of period	(35)	(55)
AOCI Including Portion Attributable to Noncontrolling Interest
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	965	1,414
Balance at end of period	$ (190)	$ 1,022

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator for earnings per share calculation:
Net income attributable to CVS Health	$ 2,312	$ 2,223
Denominator for earnings per share calculation:
Weighted average shares, basic (in shares)	1,312	1,313
Weighted average diluted shares outstanding (in shares)	1,328	1,322
Earnings per share:
Earnings per share, basic (in dollars per share)	$ 1.76	$ 1.69
Earnings per share, diluted (in dollars per share)	$ 1.74	$ 1.68
Restricted stock units and performance stock units
Denominator for earnings per share calculation:
Effect of dilutive securities (in shares)	10	6
Stock options and stock appreciation rights
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)	2	10
Denominator for earnings per share calculation:
Effect of dilutive securities (in shares)	6	3

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Commitments and Contingencies (Details) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022 USD ($) lease	Mar. 31, 2021 USD ($)	Dec. 31, 2012 member	Sep. 30, 2020 claim
Commitments and Contingencies Disclosure [Abstract]
Guarantor obligations, number of leases | lease	68
Sample size | member			200
Loss Contingencies [Line Items]
Legal settlement accrual	$ 484	$ 0
State of Florida Settlement
Loss Contingencies [Line Items]
Legal settlement accrual	$ 484
Legal settlement, period of payment	18 years
Liability recorded in association with pending legal settlement	$ 484
Radcliffe and Flaim v. Aetna Inc., et al | Pending Litigation
Loss Contingencies [Line Items]
Number of claims | claim				2

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Segment Reporting - Narrative (Details)	3 Months Ended
	Mar. 31, 2022 Segment
Segment Reporting [Abstract]
Number of operating segments	3

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Segment Reporting - Reconciliation of Financial Measures of Segments to Consolidated Totals (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Revenues from external customers	$ 76,658	$ 68,800
Net investment income (loss)	168	297
Total revenues	76,826	69,097
Adjusted operating income (loss)	4,483	4,205
Health Care Benefits
Segment Reporting Information [Line Items]
Total revenues	23,109	20,483
Pharmacy Services
Segment Reporting Information [Line Items]
Total revenues	39,461	36,321
Retail/ LTC
Segment Reporting Information [Line Items]
Total revenues	25,418	23,274
Operating Segments | Health Care Benefits
Segment Reporting Information [Line Items]
Revenues from external customers	22,997	20,315
Net investment income (loss)	89	148
Total revenues	23,109	20,483
Adjusted operating income (loss)	1,751	1,782
Operating Segments | Pharmacy Services
Segment Reporting Information [Line Items]
Revenues from external customers	36,196	33,313
Net investment income (loss)	0	0
Total revenues	39,461	36,321
Adjusted operating income (loss)	1,636	1,507
Copayments	3,800	3,400
Operating Segments | Retail/ LTC
Segment Reporting Information [Line Items]
Revenues from external customers	17,434	15,140
Net investment income (loss)	(16)	46
Total revenues	25,418	23,274
Adjusted operating income (loss)	1,605	1,394
Intersegment Eliminations
Segment Reporting Information [Line Items]
Revenues	(11,288)	(11,116)
Net investment income (loss)	0	0
Total revenues	(11,288)	(11,116)
Adjusted operating income (loss)	(204)	(175)
Intersegment Eliminations | Health Care Benefits
Segment Reporting Information [Line Items]
Revenues	23	20
Intersegment Eliminations | Pharmacy Services
Segment Reporting Information [Line Items]
Revenues	3,265	3,008
Intersegment Eliminations | Retail/ LTC
Segment Reporting Information [Line Items]
Revenues	8,000	8,088
Corporate/ Other
Segment Reporting Information [Line Items]
Revenues from external customers	31	32
Net investment income (loss)	95	103
Total revenues	126	135
Adjusted operating income (loss)	$ (305)	$ (303)

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Segment Reporting - Reconciliation from Operating Income to Adjusted Operating Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting, Other Significant Reconciling Item [Line Items]
Operating income (GAAP measure)	$ 3,490	$ 3,577
Amortization of intangible assets	468	587
Legal settlement accrual	484	0
Loss on assets held for sale	41	0
Acquisition-related integration costs	0	41
Adjusted operating income	4,483	$ 4,205
State of Florida Settlement
Segment Reporting, Other Significant Reconciling Item [Line Items]
Legal settlement accrual	$ 484
Legal settlement, period of payment	18 years