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 September 30, 2023

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 October 25, 2023, the registrant had 1,286,896,582 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	56
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	79
Item 4.	Controls and Procedures	79
Part II	Other Information
Item 1.	Legal Proceedings	80
Item 1A.	Risk Factors	80
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3	Defaults Upon Senior Securities	80
Item 4.	Mine Safety Disclosures	80
Item 5.	Other Information	80
Item 6.	Exhibits	81
Signatures		82

Part I.Financial Information

Item 1.Financial Statements

Index to Condensed Consolidated Financial Statements

	Page
Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2023 and 2022	2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and nine months ended September 30, 2023 and 2022	3
Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2023 and December 31, 2022	4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2023 and 2022	5
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended September 30, 2023 and 2022, the three months ended June 30, 2023 and 2022 and the three months ended March 31, 2023 and 2022	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Report of Independent Registered Public Accounting Firm	55

1

CVS Health Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2023		2022		2023		2022
Revenues:
Products	$	61,298	$	57,643	$	179,984	$	166,959
Premiums	24,657		21,003		74,117		63,894
Services	3,532		2,312		8,977		7,253
Net investment income	277		201		885		515
Total revenues	89,764		81,159		263,963		238,621
Operating costs:
Cost of products sold	54,688		50,365		159,679		145,164
Health care costs	21,499		17,401		63,729		52,814
Restructuring charges	11		—		507		—
Opioid litigation charges	—		5,220		—		5,704
Loss on assets held for sale	—		2,480		349		2,521
Operating expenses	9,876		9,612		29,329		28,123
Total operating costs	86,074		85,078		253,593		234,326
Operating income (loss)	3,690		(3,919)		10,370		4,295
Interest expense	693		566		1,968		1,735
Other income	(22)		(41)		(66)		(126)
Income (loss) before income tax provision (benefit)	3,019		(4,444)		8,468		2,686
Income tax provision (benefit)	754		(1,045)		2,147		691
Net income (loss)	2,265		(3,399)		6,321		1,995
Net income attributable to noncontrolling interests	(4)		(7)		(23)		(18)
Net income (loss) attributable to CVS Health	$	2,261	$	(3,406)	$	6,298	$	1,977
Net income (loss) per share attributable to CVS Health:
Basic	$	1.76	$	(2.59)	$	4.90	$	1.51
Diluted	$	1.75	$	(2.59)	$	4.88	$	1.49
Weighted average shares outstanding:
Basic	1,287		1,315		1,284		1,313
Diluted	1,290		1,315		1,289		1,324
Dividends declared per share	$	0.605	$	0.55	$	1.815	$	1.65

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

2

CVS Health Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Net income (loss)	$	2,265	$	(3,399)	$	6,321	$	1,995
Other comprehensive income (loss), net of tax:
Net unrealized investment gains (losses)	(321)		(637)		85		(2,634)
Change in discount rate on long-duration insurance reserves	181		250		167		929
Foreign currency translation adjustments	(2)		(7)		(1)		(5)
Net cash flow hedges	(4)		8		9		20
Pension and other postretirement benefits	—		1		—		2
Other comprehensive income (loss)	(146)		(385)		260		(1,688)
Comprehensive income (loss)	2,119		(3,784)		6,581		307
Comprehensive income attributable to noncontrolling interests	(4)		(7)		(23)		(18)
Comprehensive income (loss) attributable to CVS Health	$	2,115	$	(3,791)	$	6,558	$	289

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

3

CVS Health Corporation

Condensed Consolidated Balance Sheets

(Unaudited)

In millions, except per share amounts	September 30, 2023		December 31, 2022
Assets:
Cash and cash equivalents	$	13,043	$	12,945
Investments	3,145		2,778
Accounts receivable, net	32,927		27,276
Inventories	17,954		19,090
Assets held for sale	—		908
Other current assets	3,074		2,636
Total current assets	70,143		65,633
Long-term investments	21,667		21,096
Property and equipment, net	13,022		12,873
Operating lease right-of-use assets	17,564		17,872
Goodwill	91,261		78,150
Intangible assets, net	29,624		24,803
Separate accounts assets	3,200		3,228
Other assets	4,825		4,620
Total assets	$	251,306	$	228,275
Liabilities:
Accounts payable	$	14,874	$	14,838
Pharmacy claims and discounts payable	21,497		19,423
Health care costs payable	12,550		10,142
Policyholders’ funds	1,440		1,500
Accrued expenses	22,571		18,745
Other insurance liabilities	4,748		1,089
Current portion of operating lease liabilities	1,741		1,678
Current portion of long-term debt	2,132		1,778
Liabilities held for sale	—		228
Total current liabilities	81,553		69,421
Long-term operating lease liabilities	16,441		16,800
Long-term debt	59,782		50,476
Deferred income taxes	4,250		4,016
Separate accounts liabilities	3,200		3,228
Other long-term insurance liabilities	5,333		5,835
Other long-term liabilities	6,237		6,730
Total liabilities	176,796		156,506
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; 1,767 shares issued and 1,287 shares outstanding at September 30, 2023 and 1,758 shares issued and 1,300 shares outstanding at December 31, 2022 and capital surplus	48,829		48,193
Treasury stock, at cost: 480 shares at September 30, 2023 and 458 shares at December 31, 2022	(33,831)		(31,858)
Retained earnings	60,343		56,398
Accumulated other comprehensive loss	(1,004)		(1,264)
Total CVS Health shareholders’ equity	74,337		71,469
Noncontrolling interests	173		300
Total shareholders’ equity	74,510		71,769
Total liabilities and shareholders’ equity	$	251,306	$	228,275

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

4

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
In millions	2023		2022
Cash flows from operating activities:
Cash receipts from customers	$	260,300	$	235,395
Cash paid for inventory, prescriptions dispensed and health services rendered	(153,051)		(138,785)
Insurance benefits paid	(61,658)		(51,434)
Cash paid to other suppliers and employees	(26,038)		(22,728)
Interest and investment income received	1,174		687
Interest paid	(2,049)		(1,936)
Income taxes paid	(2,616)		(3,070)
Net cash provided by operating activities	16,062		18,129
Cash flows from investing activities:
Proceeds from sales and maturities of investments	5,547		5,535
Purchases of investments	(6,625)		(6,439)
Purchases of property and equipment	(2,120)		(2,039)
Acquisitions (net of cash and restricted cash acquired)	(16,492)		(131)
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,808 in 2022)	—		(1,928)
Other	43		74
Net cash used in investing activities	(19,647)		(4,928)
Cash flows from financing activities:
Proceeds from issuance of short-term loan	5,000		—
Repayment of short-term loan	(5,000)		—
Proceeds from issuance of long-term debt	10,898		—
Repayments of long-term debt	(2,734)		(4,195)
Repurchase of common stock	(2,013)		(2,000)
Dividends paid	(2,353)		(2,188)
Proceeds from exercise of stock options	242		510
Payments for taxes related to net share settlement of equity awards	(175)		(337)
Other	(210)		(119)
Net cash provided by (used in) financing activities	3,655		(8,329)
Net increase in cash, cash equivalents and restricted cash	70		4,872
Cash, cash equivalents and restricted cash at the beginning of the period	13,305		12,691
Cash, cash equivalents and restricted cash at the end of the period	$	13,375	$	17,563

5

CVS Health Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
In millions	2023		2022
Reconciliation of net income to net cash provided by operating activities:
Net income	$	6,321	$	1,995
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,232		3,181
Loss on assets held for sale	349		2,521
Stock-based compensation	461		341
Gain on sale of subsidiary	—		(225)
Deferred income taxes and other noncash items	(360)		(2,213)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(3,920)		(2,009)
Inventories	1,305		(415)
Other assets	(518)		(244)
Accounts payable and pharmacy claims and discounts payable	2,466		3,350
Health care costs payable and other insurance liabilities	4,679		4,476
Other liabilities	2,047		7,371
Net cash provided by operating activities	$	16,062	$	18,129

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 Loss		Total CVS Health Shareholders’  Equity		Noncontrolling Interests		Total Shareholders’ Equity
	Common Shares	Treasury Shares (1)
In millions
Balance at December 31, 2022	1,758	(458)	$	48,193	$	(31,858)	$	56,398	$	(1,264)	$	71,469	$	300	$	71,769
Net income	—	—	—		—		2,136		—		2,136		6		2,142
Other comprehensive income	—	—	—		—		—		389		389		—		389
Stock option activity, stock awards and other	1	—	122		—		—		—		122		—		122
Purchase of treasury shares, net of ESPP issuances	—	(22)	(18)		(1,944)		—		—		(1,962)		—		(1,962)
Common stock dividends	—	—	—		—		(781)		—		(781)		—		(781)
Other increases (decreases) in noncontrolling interests	—	—	9		—		—		—		9		(108)		(99)
Balance at March 31, 2023	1,759	(480)	48,306		(33,802)		57,753		$	(875)	71,382		198		71,580
Net income	—	—	—		—		1,901		—		1,901		13		1,914
Other comprehensive income	—	—	—		—		—		17		17		—		17
Stock option activity, stock awards and other	5	—	345		—		—		—		345		—		345
Purchase of treasury shares, net of ESPP issuances	—	(2)	2		(131)		—		—		(129)		—		(129)
Common stock dividends	—	—	—		—		(786)		—		(786)		—		(786)
Acquisition of noncontrolling interests	—	—	—		—		—		—		—		66		66
Other decreases in noncontrolling interests	—	—	(4)		—		—		—		(4)		(1)		(5)
Balance at June 30, 2023	1,764	(482)	48,649		(33,933)		58,868		(858)		72,726		276		73,002
Net income	—	—	—		—		2,261		—		2,261		4		2,265
Other comprehensive loss (Note 10)	—	—	—		—		—		(146)		(146)		—		(146)
Stock option activity, stock awards and other	3	—	165		—		—		—		165		—		165
ESPP issuances, net of purchase of treasury shares	—	2	3		102		—		—		105		—		105
Common stock dividends	—	—	—		—		(786)		—		(786)		—		(786)
Other increases (decreases) in noncontrolling interests	—	—	12		—		—		—		12		(107)		(95)
Balance at September 30, 2023	1,767	(480)	$	48,829	$	(33,831)	$	60,343	$	(1,004)	$	74,337	$	173	$	74,510

_____________________________________________

(1)Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022.

(2)Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022.

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

7

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
Adoption of new accounting standard (Note 1) (3)	—	—	—		—		91		(631)		(540)		—		(540)
Net income	—	—	—		—		2,354		—		2,354		1		2,355
Other comprehensive loss	—	—	—		—		—		(763)		(763)		—		(763)
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)		56,621		(429)		73,724		310		74,034
Net income	—	—	—		—		3,029		—		3,029		10		3,039
Other comprehensive loss	—	—	—		—		—		(540)		(540)		—		(540)
Stock option activity, stock awards and other	8	—	197		—		—		—		197		—		197
Purchase of treasury shares, net of ESPP issuances	—	(2)	—		(267)		—		—		(267)		—		(267)
Common stock dividends	—	—	—		—		(729)		—		(729)		—		(729)
Other increases in noncontrolling interests	—	—	—		—		—		—		—		2		2
Balance at June 30, 2022	1,755	(443)	47,874		(30,412)		58,921		(969)		75,414		322		75,736
Net income (loss)	—	—	—		—		(3,406)		—		(3,406)		7		(3,399)
Other comprehensive loss (Note 10)	—	—	—		—		—		(385)		(385)		—		(385)
Stock option activity, stock awards and other	2	—	173		—		—		—		173		—		173
ESPP issuances, net of purchase of treasury shares	—	1	—		86		—		—		86		—		86
Common stock dividends	—	—	—		—		(723)		—		(723)		—		(723)
Other decreases in noncontrolling interests	—	—	—		—		—		—		—		(1)		(1)
Balance at September 30, 2022	1,757	(442)	$	48,047	$	(30,326)	$	54,792	$	(1,354)	$	71,159	$	328	$	71,487

_____________________________________________

(1)Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021.

(2)Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2022 and June 30, 2022 and $17 million as of March 31, 2022 and December 31, 2021.

(3)Reflects the adoption of Accounting Standards Update (“ASU”) 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the three months ended March 31, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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

8

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 1,000 walk-in medical clinics, 192 primary care medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members and 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 more than 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 is a leader in key segments of health care through its foundational businesses and is creating new sources of value by expanding into next generation care delivery and health services, with a goal of improving satisfaction levels for both providers and consumers. The Company believes its integrated health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

In August 2023, the Company announced the launch of CordavisTM, a wholly owned subsidiary that will work directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products. Through Cordavis, the Company will help to ensure the consistent long-term supply of FDA approved, affordable biosimilars for the U.S. pharmaceutical market.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations. This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. Prior period segment financial information has been recast to conform with the current period presentation.

Following the segment realignment described above, the Company’s four reportable segments are as follows: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness 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 and Medicaid health care management 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. The Company entered Public Exchanges in four additional states effective January 2023 and will enter an additional five states effective January 2024.

Health Services Segment

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides 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 and provides various administrative, management and reporting services to pharmaceutical manufacturers. The Health Services segment’s clients are primarily employers,

9

insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, the U.S. Centers for Medicare & Medicaid Services (“CMS”), plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities.

Pharmacy & Consumer Wellness Segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of September 30, 2023, the Pharmacy & Consumer Wellness segment operated more than 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.

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 transaction and 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 for the year ended December 31, 2022, which were revised to conform with current year financial statement changes as described in Note 13 “Segment Reporting,” and are included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 25, 2023 (the “May 2023 8-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.

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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 primarily represents funds held on behalf of members and funds held in escrow in connection with agreements with accountable care organizations.

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 demand deposits, 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	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	13,043	$	12,945
Restricted cash (included in other current assets)	96		144
Restricted cash (included in other assets)	236		216
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	13,375	$	13,305

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net at September 30, 2023 and December 31, 2022 was composed of the following:

In millions	September 30, 2023		December 31, 2022
Trade receivables	$	10,424	$	8,983
Vendor and manufacturer receivables	16,646		12,395
Premium receivables	3,254		2,676
Other receivables	2,603		3,449
Total accounts receivable, net (1)	$	32,927	$	27,503

_____________________________________________

(1)Includes accounts receivable of $227 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

The Company’s allowance for credit losses was $357 million and $333 million as of September 30, 2023 and December 31, 2022, 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.

Health Care Contract Acquisition Costs

Insurance products included in the Health Care Benefits segment are cancellable by either the customer or the member monthly upon written notice. Acquisition costs related to prepaid health care and health indemnity contracts are generally expensed as incurred. For certain long-duration insurance contracts, acquisition costs directly related to the successful acquisition of a new or renewal insurance contract, including commissions, are deferred and are recorded as other current assets or other assets on

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the unaudited condensed consolidated balance sheets. Contracts are grouped by product and issue year into cohorts consistent with the grouping used in estimating the associated liability and are amortized on a constant level basis based on the remaining in-force policies over the estimated term of the contracts to approximate straight-line amortization. Changes to the Company’s assumptions, including assumptions related to persistency, are reflected at the cohort level at the time of change and are recognized prospectively over the estimated terms of the contract. The amortization of deferred acquisition costs is recorded in operating expenses in the unaudited condensed consolidated statements of operations.

The following is a roll forward of deferred acquisition costs for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Deferred acquisition costs, beginning of the period	$	1,219	$	879
Capitalizations	414		423
Amortization expense	(196)		(163)
Deferred acquisition costs, end of the period	$	1,437	$	1,139

Goodwill

The Company accounts for business combinations using the acquisition method of accounting, which requires the excess cost of an acquisition over the fair value of net assets acquired and identifiable intangible assets to be recorded as goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently, if necessary.

Effective for the 2023 annual goodwill impairment test, the Company elected to change its annual goodwill impairment test date from August 31st to October 31st to better align with its annual budgeting processes, as this previous election predates large acquisitions such as Caremark Rx, Inc. and Aetna Inc.

The Company’s most recent goodwill impairment test was performed as of January 1, 2023, in connection with the segment realignment previously described in the “Description of Business” section. The results of that impairment test indicated that there was no impairment of goodwill as of the testing date, with the fair values of all reporting units with goodwill exceeding their respective carrying values by significant margins.

Intangible Assets

The Company’s identifiable intangible assets consist primarily of trademarks, trade names, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired (“VOBA”). These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.

The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset. Definite-lived intangible assets are amortized using the straight-line method. VOBA is subject to loss recognition testing annually, or more frequently, if necessary.

Indefinite lived intangible assets are not amortized but are tested for impairment annually, or more frequently, if necessary.

Separate Accounts

Separate Accounts assets and liabilities related to large case pensions products represent funds maintained to meet specific objectives of contract holders who bear the investment risk. These assets and liabilities are carried at fair value. Net investment income (including net realized capital gains and losses) accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals and net investment income (including net realized and net unrealized capital gains and losses) on Separate Accounts assets are not reflected in the unaudited condensed consolidated statements of operations or cash flows. Management fees charged to contract holders are included in services revenue and recognized over the period earned.

See Note 5 ‘‘Fair Value’’ and Note 7 ‘‘Other Insurance Liabilities and Separate Accounts’’ for additional information about separate accounts.

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Future Policy Benefits

Future policy benefits consist primarily of reserves for products for which the Company no longer solicits or accepts new customers, including limited payment pension and annuity contracts and long-term care insurance contracts and are recorded in other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. Contracts are grouped into cohorts by contract type and issue year. The liability for future policy benefits is adjusted for differences between actual and expected experience.

Reserves for limited payment pension and annuity contracts represent the Company’s estimate of the present value of future benefits to be paid to or on behalf of policyholders and are computed using actuarial principles that consider, among other things, assumptions reflecting anticipated mortality and retirement experience. On an annual basis, or more frequently if necessary, the Company reviews mortality assumptions against both industry standards and its experience.

Reserves for long-term care insurance contracts represent the Company’s estimate of the present value of future benefits and settlement costs to be paid to or on behalf of policyholders less the present value of future net premiums. The Company’s estimate of the present value of future benefits under such contracts is based upon mortality, morbidity, lapse and interest rate assumptions. On an annual basis, or more frequently if necessary, the Company reviews its mortality, morbidity and lapse assumptions against its experience. Annually, or each time the assumptions are changed, the net premium ratio used to calculate the future policy benefit liability is updated to reflect actual experience, as well as the impact of any change in assumptions on the Company’s future cash flows.

The Company discounts its future policy benefit liability using a curve of spot rates derived from an upper-medium grade fixed-income investment. At each reporting date, the Company will measure its liability for future policy benefits using both the current spot rate curve and the locked-in discount rate at each cohort’s inception. Any difference between the measured liabilities is recorded in other comprehensive income (loss). In subsequent periods, the current period amount recorded in other comprehensive income (loss) will be adjusted for amounts previously recorded in accumulated other comprehensive loss.

As of September 30, 2023, future policy benefits balances of $366 million and $4.4 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively. As of December 31, 2022, future policy benefits balances of $334 million and $4.7 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively.

See Note 7 ‘‘Other Insurance Liabilities and Separate Accounts’’ for additional information about future policy benefits.

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Revenue Recognition

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2023 and 2022:

In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	44,985	$	22,977	$	—	$	(11,764)	$	56,198
Front Store	—		—		5,371		—		—		5,371
Premiums	24,645		—		—		12		—		24,657
Net investment income (loss)	187		—		(2)		92		—		277
Other	1,464		1,906		526		1		(636)		3,261
Total	$	26,296	$	46,891	$	28,872	$	105	$	(12,400)	$	89,764
Health Services distribution channel:
Pharmacy network (1)			$	27,981
Mail & specialty (2)			17,004
Other			1,906
Total			$	46,891
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,652	$	21,084	$	—	$	(11,361)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,406		602		582		18		(609)		1,999
Total	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Health Services distribution channel:
Pharmacy network (1)			$	26,334
Mail & specialty (2)			16,318
Other			602
Total			$	43,254

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In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	133,428	$	67,371	$	—	$	(36,754)	$	164,045
Front Store	—		—		16,597		—		—		16,597
Premiums	74,079		—		—		38		—		74,117
Net investment income (loss)	556		—		(4)		333		—		885
Other	4,285		4,269		1,614		5		(1,854)		8,319
Total	$	78,920	$	137,697	$	85,578	$	376	$	(38,608)	$	263,963
Health Services distribution channel:
Pharmacy network (1)			$	83,050
Mail & specialty (2)			50,378
Other			4,269
Total			$	137,697
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	123,627	$	61,496	$	—	$	(33,932)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,205		2,180		1,799		51		(1,844)		6,391
Total	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Health Services distribution channel:
Pharmacy network (1)			$	76,358
Mail & specialty (2)			47,269
Other			2,180
Total			$	125,807

_____________________________________________

(1)Health Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies. Effective January 1, 2023, pharmacy network also includes activity associated with Maintenance Choice®, which 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. Maintenance Choice activity was previously reflected in mail & specialty. Prior period financial information has been revised to conform with current period presentation.

(2)Health Services mail & specialty is defined as specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as mail order and specialty claims fulfilled by the Pharmacy & Consumer Wellness segment. Effective January 1, 2023, mail & specialty excludes Maintenance Choice activity, which is now reflected within pharmacy network. Prior period financial information has been revised to conform with current period presentation.

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 primarily 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.

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

In millions	September 30, 2023		December 31, 2022
Trade receivables (included in accounts receivable, net)	$	10,424	$	8,983
Contract liabilities (included in accrued expenses)	167		71

During the nine months ended September 30, 2023 and 2022, 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. During the nine months ended September 30, 2023, the contract liabilities balance also reflects the addition of contract liabilities acquired in connection with the Company’s acquisitions of Signify Health, Inc. (“Signify Health”) and Oak Street Health, Inc. (“Oak Street Health”) on March 29, 2023 and May 2, 2023, respectively. Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2023		2022
Contract liabilities, beginning of the period	$	71	$	87
Rewards earnings and gift card issuances	250		250
Redemption and breakage	(267)		(263)
Acquired contract liabilities	109		—
Other	4		—
Contract liabilities, end of the period	$	167	$	74

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 $12 million and $16 million in the three months ended September 30, 2023 and 2022, respectively, and expensed fees for the use of this network of $44 million and $47 million in the nine months ended September 30, 2023 and 2022, 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”), which operates an LTC pharmacy. Heartland paid the Company $5 million and $22 million for pharmaceutical inventory purchases during the three months ended September 30, 2023 and 2022, respectively, and $34 million and $66 million for pharmaceutical inventory purchases during the nine months ended September 30, 2023 and 2022, 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 Recently Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) (the “long-duration insurance standard”). 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 Company adopted this accounting standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the “transition date”, for changes to its liabilities for future policy benefits, deferred acquisition costs and value of business acquired intangible asset. Upon adoption, the Company recorded a transition date net adjustment to reduce accumulated other comprehensive income (loss) by $986 million ($766 million after-

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tax) with a corresponding increase to its liability for future policy benefits, the majority of which is included within other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. The transition date net adjustment was 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 historical guidance. The Company was not required to record an adjustment to retained earnings on the transition date. Prior period financial information has been revised to reflect the adoption of the long-duration insurance standard.

The following summarizes changes in the balances of long-duration insurance liabilities as a result of the adoption of the long-duration insurance standard effective January 1, 2021:

In millions	Large Case Pensions		Long-Term Care		Other
Balance at December 31, 2020, net of reinsurance	$	3,224	$	1,142	$	480
Add: Reinsurance recoverable	—		—		274
Balance at December 31, 2020	3,224		1,142		754
Change in discount rate assumptions	604		553		44
Removal of shadow adjustments in accumulated other comprehensive income	(181)		—		—
Adjusted balance at January 1, 2021	3,647		1,695		798
Less: Reinsurance recoverable	—		—		308
Adjusted balance at January 1, 2021, net of reinsurance	$	3,647	$	1,695	$	490

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Impact of Long-Duration Insurance Standard Adoption on Financial Statement Line Items

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Three Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	17,419	$	(18)	$	17,401
Operating expenses	9,606		6		9,612
Total operating costs	85,090		(12)		85,078
Operating loss	(3,931)		12		(3,919)
Loss before income tax benefit	(4,456)		12		(4,444)
Income tax benefit	(1,047)		2		(1,045)
Net loss	(3,409)		10		(3,399)
Net loss attributable to CVS Health	(3,416)		10		(3,406)
Net loss per share attributable to CVS Health:
Basic	$	(2.60)	$	0.01	$	(2.59)
Diluted	$	(2.60)	$	0.01	$	(2.59)
Nine Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	52,976	$	(162)	$	52,814
Operating expenses	28,128		(5)		28,123
Total operating costs	234,493		(167)		234,326
Operating income	4,128		167		4,295
Income before income tax provision	2,519		167		2,686
Income tax provision	654		37		691
Net income	1,865		130		1,995
Net income attributable to CVS Health	1,847		130		1,977
Net income per share attributable to CVS Health:
Basic	$	1.41	$	0.10	$	1.51
Diluted	$	1.40	$	0.09	$	1.49

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As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated balance sheet as of December 31, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2022		Adjustments		Adjusted December 31, 2022
Condensed Consolidated Balance Sheet:
Other current assets	$	2,685	$	(49)	$	2,636
Total current assets	65,682		(49)		65,633
Intangible assets, net	24,754		49		24,803
Total assets	228,275		—		228,275
Health care costs payable	10,406		(264)		10,142
Other insurance liabilities	1,140		(51)		1,089
Total current liabilities	69,736		(315)		69,421
Deferred income taxes	3,880		136		4,016
Other long-term insurance liabilities	6,108		(273)		5,835
Other long-term liabilities	6,732		(2)		6,730
Total liabilities	156,960		(454)		156,506
Retained earnings	56,145		253		56,398
Accumulated other comprehensive loss	(1,465)		201		(1,264)
Total CVS Health shareholders’ equity	71,015		454		71,469
Total shareholders’ equity	71,315		454		71,769
Total liabilities and shareholders’ equity	228,275		—		228,275

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Condensed Consolidated Statement of Cash Flows:
Reconciliation of net income to net cash provided by operating activities:
Net income	$	1,865	$	130	$	1,995
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,198		(17)		3,181
Deferred income taxes and other noncash items	(2,250)		37		(2,213)
Change in operating assets and liabilities, net of effects from acquisitions:
Other assets	(311)		67		(244)
Health care costs payable and other insurance liabilities	4,687		(211)		4,476
Other liabilities	7,377		(6)		7,371

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2.Acquisitions and Assets Held for Sale

Oak Street Health Acquisition

On May 2, 2023 (the “Oak Street Health Acquisition Date”), the Company acquired 100% of the outstanding shares and voting interest of Oak Street Health for cash (“Oak Street Health Acquisition”). Under the terms of the merger agreement, Oak Street Health stockholders received $39.00 per share in cash. The Company financed the transaction with borrowings of $5.0 billion from a term loan agreement entered into on May 1, 2023 as described in Note 8 ‘‘Borrowings’’ and cash on hand. Oak Street Health is a leading multi-payor, senior focused value-based primary care company. Oak Street Health is included within the Health Services segment. The Company acquired Oak Street Health to advance its value-based care strategy and broaden its platform into primary care.

The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	9,579
Fair value of replacement equity awards for pre-combination services (3.9 million shares) (1)	118
Effective settlement of pre-existing relationship (2)	(29)
Total consideration transferred	$	9,668

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Oak Street Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $118 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $165 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $29 million of effectively settled liabilities the Company owed to Oak Street Health from their pre-existing relationship.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values at the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	201
Investments	168
Accounts receivable	1,143
Other current assets	46
Property and equipment	180
Operating lease right-of-use assets	316
Goodwill	7,189
Intangible assets	4,233
Other long-term assets	7
Total assets acquired	13,483
Health care costs payable	1,098
Other current liabilities	443
Operating lease liabilities (current and long-term)	378
Debt (current and long-term)	1,028
Deferred income taxes	773
Other long-term liabilities	29
Total liabilities assumed	3,749
Noncontrolling interests	66
Total consideration transferred	$	9,668

The assessment of fair value is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The most significant open items included the accounting for income taxes and the accounting for contingencies as management is awaiting additional information to complete its assessment of these matters. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

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Goodwill

Goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the health services industry, the assembled workforce acquired, expected revenue and medical cost synergies, as well as operating efficiencies and cost savings. The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	6,912
Pharmacy & Consumer Wellness	156
Health Care Benefits	121
Total goodwill	$	7,189

The amount of goodwill deductible for income tax purposes was not material.

Intangible Assets

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Oak Street Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships (1)	$	3,620	19.9
Technology	143		3.0
Trademark (definite-lived)	470		8.0
Total intangible assets	$	4,233	18.0

_____________________________________________

(1) The substantial majority of the customer relationships intangible asset relates to relationships with health plan payers.

Deferred Income Taxes

The purchase price allocation includes net deferred tax liabilities of $773 million, primarily related to deferred tax liabilities established on the identifiable acquired intangible assets.

Consolidated Results of Operations

During the period from the Oak Street Health Acquisition Date through September 30, 2023, the Company’s consolidated results of operations included $1.3 billion of revenues and $304 million of operating losses, including $121 million of intangible asset amortization and $51 million of stock-based compensation, associated with the results of operations of Oak Street Health.

During the nine months ended September 30, 2023, the Company incurred transaction costs of $77 million associated with the Oak Street Health Acquisition, which were recorded in operating expenses.

Signify Health Acquisition

On March 29, 2023 (the “Signify Health Acquisition Date”), the Company acquired 100% of the outstanding shares and voting interest of Signify Health for cash (“Signify Health Acquisition”). Under the terms of the merger agreement, Signify Health stockholders received $30.50 per share in cash. The Company financed the transaction with cash on hand, which included approximately $6 billion of proceeds from the issuance of senior unsecured notes in February 2023. Signify Health is a leader in health risk assessments, value-based care and provider enablement services. Signify Health is included within the Health Services segment. The Company acquired Signify Health to advance its health care services strategy, growth in value-based care and new product offerings for other payers.

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The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	7,450
Fair value of replacement equity awards for pre-combination services (3.2 million shares) (1)	14
Effective settlement of pre-existing relationship (2)	(111)
Total consideration transferred	$	7,353

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Signify Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $14 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $167 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $111 million of effectively settled liabilities the Company owed to Signify Health from their pre-existing relationship.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values at the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	376
Accounts receivable	190
Other current assets (including restricted cash of $28)	147
Property and equipment	25
Goodwill	5,922
Intangible assets	1,920
Other long-term assets	23
Total assets acquired	8,603
Other current liabilities	606
Debt (current and long-term)	346
Deferred income taxes	272
Other long-term liabilities	26
Total liabilities assumed	1,250
Total consideration transferred	$	7,353

The assessment of fair value is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The most significant open items included the estimation of certain contract assets and contract liabilities, the accounting for income taxes and the accounting for contingencies as management is awaiting additional information to complete its assessment of these matters. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

Goodwill

Goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the health services industry, the assembled workforce acquired, expected revenue and medical cost synergies, as well as operating efficiencies and cost savings. The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	3,419
Health Care Benefits	2,473
Pharmacy & Consumer Wellness	30
Total goodwill	$	5,922

Approximately $1.7 billion of goodwill is deductible for income tax purposes.

22

Intangible Assets

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Signify Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships	$	1,810	16.7
Technology	50		3.0
Trademark (definite-lived)	60		5.0
Total intangible assets	$	1,920	16.0

Deferred Income Taxes

The purchase price allocation includes net deferred tax liabilities of $272 million, primarily related to deferred tax liabilities established on the identifiable acquired intangible assets.

Consolidated Results of Operations

During the period from the Signify Health Acquisition Date through September 30, 2023, the Company’s consolidated results of operations included $528 million of revenues associated with the results of operations of Signify Health, while its impact on consolidated operating income was not material.

During the nine months ended September 30, 2023, the Company incurred transaction costs of $37 million associated with the Signify Health Acquisition, which were recorded in operating expenses.

Assets Held For Sale

The Company continually evaluates its portfolio for non-strategic assets. During 2022, the Company determined that its Omnicare® long-term care business (“LTC business”), which is included within the Pharmacy & Consumer Wellness segment, was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. At that time, the LTC business met the criteria to be classified as held for sale.

During 2022, the carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell. Accordingly, the Company recorded total losses on assets held for sale of $2.5 billion during the year ended December 31, 2022. During the first quarter of 2023, a loss on assets held for sale of $349 million was recorded to write-down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. The loss on assets held for sale represents the write-down of long-lived assets and was recorded in the Company’s unaudited condensed consolidated statement of operations within the Pharmacy & Consumer Wellness segment.

While the Company continues to evaluate strategic alternatives for the LTC business, during the third quarter of 2023, the Company determined it was no longer probable that a sale would be completed in the near term. At that time, the Company concluded that the LTC business no longer met the criteria to be classified as held for sale. Accordingly, the assets and liabilities associated with this business have been reclassified to held and used at their respective fair values on the unaudited condensed consolidated balance sheet as of September 30, 2023.

23

3.Restructuring Program

During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives, including providing clinical trials services. In connection with the restructuring plan, during the second quarter of 2023, the Company recorded a $496 million pre-tax restructuring charge, comprised of $344 million of severance and employee-related costs associated with corporate workforce optimization and $152 million of asset impairment charges, and during the third quarter of 2023, the Company recorded an $11 million stock-based compensation charge associated with the impacted employees. These restructuring charges are reflected in the Corporate/Other segment. The severance and employee-related costs were recorded in accrued expenses and the asset impairments were recorded as a reduction of property and equipment, net, while the stock-based compensation charge was reflected as an adjustment to common stock and capital surplus on the unaudited condensed consolidated balance sheet. During the three months ended September 30, 2023, the Company made payments of $58 million related to the severance and employee-related costs.

Severance and employee-related costs consist primarily of salary continuation benefits, prorated annual incentive compensation, continuation of health care benefits and outplacement services. Severance and employee-related benefits are determined pursuant to the Company’s written severance plans and are recognized when the benefits are determined to be probable of being paid and are reasonably estimable.

The restructuring program is expected to be substantially complete by the end of 2023.

24

4.Investments

Total investments at September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023						December 31, 2022
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	3,027	$	17,374	$	20,401	$	2,718	$	17,562	$	20,280
Mortgage loans	116		1,157		1,273		55		989		1,044
Other investments	2		3,136		3,138		5		2,562		2,567
Total investments (1)	$	3,145	$	21,667	$	24,812	$	2,778	$	21,113	$	23,891

_____________________________________________

(1)Includes long-term investments of $17 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Debt Securities

Debt securities available for sale at September 30, 2023 and December 31, 2022 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2023
Debt securities:
U.S. government securities	$	2,092	$	—	$	2,092	$	—	$	(171)	$	1,921
States, municipalities and political subdivisions	2,277		—		2,277		1		(151)		2,127
U.S. corporate securities	10,062		—		10,062		12		(879)		9,195
Foreign securities	2,621		(1)		2,620		9		(233)		2,396
Residential mortgage-backed securities	833		—		833		—		(103)		730
Commercial mortgage-backed securities	1,128		—		1,128		—		(151)		977
Other asset-backed securities	3,069		—		3,069		13		(46)		3,036
Redeemable preferred securities	20		—		20		—		(1)		19
Total debt securities (1)	$	22,102	$	(1)	$	22,101	$	35	$	(1,735)	$	20,401
December 31, 2022
Debt securities:
U.S. government securities	$	2,074	$	—	$	2,074	$	—	$	(182)	$	1,892
States, municipalities and political subdivisions	2,393		—		2,393		8		(129)		2,272
U.S. corporate securities	9,838		(3)		9,835		26		(903)		8,958
Foreign securities	2,780		(1)		2,779		15		(244)		2,550
Residential mortgage-backed securities	845		—		845		1		(89)		757
Commercial mortgage-backed securities	1,172		—		1,172		1		(155)		1,018
Other asset-backed securities	2,940		—		2,940		6		(136)		2,810
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,067	$	(4)	$	22,063	$	57	$	(1,840)	$	20,280

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2023, debt securities with a fair value of $560 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $63 million and at December 31, 2022, debt securities with a fair value of $609 million, gross unrealized capital gains of $3 million and gross unrealized capital losses of $59 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive loss.

25

The net amortized cost and fair value of debt securities at September 30, 2023 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	$	1,273	$	1,254
One year through five years	7,413		6,995
After five years through ten years	4,279		3,891
Greater than ten years	4,106		3,518
Residential mortgage-backed securities	833		730
Commercial mortgage-backed securities	1,128		977
Other asset-backed securities	3,069		3,036
Total	$	22,101	$	20,401

26

Summarized below are the debt securities the Company held at September 30, 2023 and December 31, 2022 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
September 30, 2023
Debt securities:
U.S. government securities	143	$	393	$	12	370	$	1,250	$	159	513	$	1,643	$	171
States, municipalities and political subdivisions	614	1,003		36		634	939		115		1,248	1,942		151
U.S. corporate securities	2,619	2,903		127		4,427	5,688		752		7,046	8,591		879
Foreign securities	565	749		28		1,064	1,473		205		1,629	2,222		233
Residential mortgage-backed securities	88	234		9		460	496		94		548	730		103
Commercial mortgage-backed securities	83	207		11		340	668		140		423	875		151
Other asset-backed securities	399	1,010		11		597	1,144		35		996	2,154		46
Redeemable preferred securities	4	2		—		8	17		1		12	19		1
Total debt securities	4,515	$	6,501	$	234	7,900	$	11,675	$	1,501	12,415	$	18,176	$	1,735
December 31, 2022
Debt securities:
U.S. government securities	519	$	1,620	$	164	35	$	191	$	18	554	$	1,811	$	182
States, municipalities and political subdivisions	859	1,370		95		196	322		34		1,055	1,692		129
U.S. corporate securities	5,193	6,537		622		1,479	1,822		281		6,672	8,359		903
Foreign securities	1,168	1,715		147		403	592		97		1,571	2,307		244
Residential mortgage-backed securities	452	464		39		91	257		50		543	721		89
Commercial mortgage-backed securities	288	611		69		187	381		86		475	992		155
Other asset-backed securities	1,008	1,893		88		391	694		48		1,399	2,587		136
Redeemable preferred securities	13	18		2		2	5		—		15	23		2
Total debt securities	9,500	$	14,228	$	1,226	2,784	$	4,264	$	614	12,284	$	18,492	$	1,840

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 September 30, 2023 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2023, 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.

27

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2023 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	$	16	$	1	$	1,032	$	19	$	1,048	$	20
One year through five years	151		7		6,356		416		6,507		423
After five years through ten years	113		14		3,439		381		3,552		395
Greater than ten years	206		37		3,104		560		3,310		597
Residential mortgage-backed securities	8		1		722		102		730		103
Commercial mortgage-backed securities	16		2		859		149		875		151
Other asset-backed securities	18		1		2,136		45		2,154		46
Total	$	528	$	63	$	17,648	$	1,672	$	18,176	$	1,735

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2023 and 2022, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
New mortgage loans	$	63	$	125	$	286	$	305
Mortgage loans fully repaid	17		62		34		136
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.

28

Based on the Company’s assessments at September 30, 2023 and December 31, 2022, 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	2023		2022		2021		2020		2019		Prior		Total
September 30, 2023
1	$	—	$	—	$	—	$	—	$	—	$	12	$	12
2 to 4	259		344		239		35		11		347		1,235
5 and 6	—		—		6		—		—		20		26
7	—		—		—		—		—		—		—
Total	$	259	$	344	$	245	$	35	$	11	$	379	$	1,273
December 31, 2022
1			$	—	$	—	$	—	$	—	$	15	$	15
2 to 4			326		247		36		11		402		1,022
5 and 6			—		—		—		—		7		7
7			—		—		—		—		—		—
Total			$	326	$	247	$	36	$	11	$	424	$	1,044

Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Debt securities	$	217	$	174	$	612	$	510
Mortgage loans	16		14		43		38
Other investments	199		134		609		279
Gross investment income	432		322		1,264		827
Investment expenses	(13)		(11)		(34)		(29)
Net investment income (excluding net realized capital losses)	419		311		1,230		798
Net realized capital losses (1)	(142)		(110)		(345)		(283)
Net investment income (2)	$	277	$	201	$	885	$	515

_____________________________________________

(1)Net realized capital losses include yield-related impairment losses on debt securities of $47 million in the three months ended September 30, 2023. There were no credit-related losses on debt securities in the three months ended September 30, 2023. Net realized capital losses include yield-related impairment losses on debt securities of $108 million and are net of the reversal of previously recorded credit-related impairment losses on debt securities of $3 million in the nine months ended September 30, 2023. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $73 million and $1 million, respectively, in the three months ended September 30, 2022. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $121 million and $17 million, respectively, in the nine months ended September 30, 2022.

(2)Net investment income includes $8 million and $25 million for the three and nine months ended September 30, 2023, respectively, and $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, 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 and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Proceeds from sales	$	1,171	$	593	$	3,503	$	3,556
Gross realized capital gains	2		3		7		20
Gross realized capital losses	110		28		294		135

29

5.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 Exhibit 99.1 to the May 2023 8-K.

30

There were no financial liabilities measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2023 or December 31, 2022. Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2023 and December 31, 2022 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2023
Cash and cash equivalents	$	5,159	$	7,884	$	—	$	13,043
Debt securities:
U.S. government securities	1,899		22		—		1,921
States, municipalities and political subdivisions	—		2,127		—		2,127
U.S. corporate securities	—		9,166		29		9,195
Foreign securities	—		2,388		8		2,396
Residential mortgage-backed securities	—		730		—		730
Commercial mortgage-backed securities	—		977		—		977
Other asset-backed securities	—		3,036		—		3,036
Redeemable preferred securities	—		19		—		19
Total debt securities	1,899		18,465		37		20,401
Equity securities	187		—		83		270
Total	$	7,245	$	26,349	$	120	$	33,714
December 31, 2022
Cash and cash equivalents (1)	$	6,902	$	6,049	$	—	$	12,951
Debt securities:
U.S. government securities	1,860		32		—		1,892
States, municipalities and political subdivisions	—		2,272		—		2,272
U.S. corporate securities	—		8,897		61		8,958
Foreign securities	—		2,542		8		2,550
Residential mortgage-backed securities	—		757		—		757
Commercial mortgage-backed securities	—		1,018		—		1,018
Other asset-backed securities	—		2,810		—		2,810
Redeemable preferred securities	—		23		—		23
Total debt securities	1,860		18,351		69		20,280
Equity securities	116		—		60		176
Total	$	8,878	$	24,400	$	129	$	33,407

_____________________________________________

(1)Includes cash and cash equivalents of $6 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

During the three months ended September 30, 2023 and 2022 there were no transfers into or out of Level 3. During the nine months ended September 30, 2023 and 2022, there were $42 million and $29 million, respectively, of transfers out of Level 3.

31

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2023 and December 31, 2022 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2023
Assets:
Mortgage loans	$	1,273	$	—	$	—	$	1,203	$	1,203
Equity securities (1)	519		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	1		—		—		1		1
Without a fixed maturity	324		—		—		277		277
Long-term debt	61,914		54,807		—		—		54,807
December 31, 2022
Assets:
Mortgage loans	$	1,044	$	—	$	—	$	978	$	978
Equity securities (1)	411		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	3		—		—		3		3
Without a fixed maturity	332		—		—		305		305
Long-term debt (2)	52,257		47,653		—		—		47,653

_____________________________________________

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

(2)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

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 September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023								December 31, 2022
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1	$	152	$	—	$	153	$	2	$	154	$	—	$	156
Debt securities	667		1,896		—		2,563		712		1,965		—		2,677
Common/collective trusts	—		443		—		443		—		480		—		480
Total (1)	$	668	$	2,491	$	—	$	3,159	$	714	$	2,599	$	—	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

32

6.Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Health care costs payable, beginning of the period	$	10,142	$	8,678
Less: Reinsurance recoverables	5		8
Less: Impact of discount rate on long-duration insurance reserves (1)	8		—
Health care costs payable, beginning of the period, net	10,129		8,670
Acquisitions, net	1,098		—
Add: Components of incurred health care costs
Current year	64,183		53,216
Prior years	(679)		(670)
Total incurred health care costs (2)	63,504		52,546
Less: Claims paid
Current year	52,952		43,632
Prior years	9,207		7,468
Total claims paid	62,159		51,100
Add: Premium deficiency reserve	—		5
Health care costs payable, end of the period, net	12,572		10,121
Add: Reinsurance recoverables	4		5
Add: Impact of discount rate on long-duration insurance reserves (1)	(26)		5
Health care costs payable, end of the period	$	12,550	$	10,131

_____________________________________________

(1)Reflects the difference between the current discount rate and the locked-in discount rate on long-duration insurance reserves which is recorded within accumulated other comprehensive loss on the unaudited condensed consolidated balance sheets. Refer to Note 1 ‘‘Significant Accounting Policies’’ for further information related to the adoption of the long-duration insurance contracts accounting standard.

(2)Total incurred health care costs for the nine months ended September 30, 2023 and 2022 in the table above exclude $62 million and $59 million, respectively, of health care costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and $163 million and $204 million, respectively, of health care costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets. The incurred health care costs for the nine months ended September 30, 2022 also exclude $5 million for a premium deficiency reserve related to the Company’s Medicaid products.

The Company’s estimates of prior years’ health care costs payable decreased by $679 million and $670 million, respectively, in the nine months ended September 30, 2023 and 2022, 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 September 30, 2023, 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 $8.9 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2023 related to the current year.

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7.Other Insurance Liabilities and Separate Accounts

Future Policy Benefits

The following tables show the components of the change in the liability for future policy benefits, which is included in other insurance liabilities and other long-term insurance liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30, 2023
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of period - current discount rate			$	300
Beginning liability for future policy benefits at original (locked-in) discount rate			$	302
Effect of changes in cash flow assumptions			—
Effect of actual variances from expected experience			7
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			309
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(29)
Ending liability for future policy benefits at original (locked-in) discount rate			291
Effect of changes in discount rate assumptions			(12)
Liability for future policy benefits, end of period - current discount rate			$	279
Present value of expected future policy benefits
Liability for future policy benefits, beginning of period - current discount rate	$	2,253	$	1,566
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,425	$	1,613
Effect of changes in cash flow assumptions	—		—
Effect of actual variances from expected experience	1		9
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,426		1,622
Issuances	8		—
Interest accrual (using locked-in discount rate)	74		61
Benefit payments (actual)	(210)		(53)
Ending liability for future policy benefits at original (locked-in) discount rate	2,298		1,630
Effect of changes in discount rate assumptions	(247)		(146)
Liability for future policy benefits, end of period - current discount rate	$	2,051	$	1,484
Net liability for future policy benefits	$	2,051	$	1,205
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,051	$	1,205

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

34

	Nine Months Ended September 30, 2022
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of the period - current discount rate			$	389
Beginning liability for future policy benefits at original (locked-in) discount rate			$	323
Effect of changes in cash flow assumptions			(14)
Effect of actual variances from expected experience			13
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			322
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(30)
Ending liability for future policy benefits at original (locked-in) discount rate			303
Effect of changes in discount rate assumptions			(5)
Liability for future policy benefits, end of the period - current discount rate			$	298
Present value of expected future policy benefits
Liability for future policy benefits, beginning of the period - current discount rate	$	3,034	$	1,991
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,650	$	1,480
Effect of changes in cash flow assumptions	—		99
Effect of actual variances from expected experience	(26)		15
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,624		1,594
Issuances	4		—
Interest accrual (using locked-in discount rate)	80		60
Benefit payments (actual)	(220)		(48)
Ending liability for future policy benefits at original (locked-in) discount rate	2,488		1,606
Effect of changes in discount rate assumptions	(205)		(78)
Liability for future policy benefits, end of the period - current discount rate	$	2,283	$	1,528
Net liability for future policy benefits	$	2,283	$	1,230
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,283	$	1,230

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

The Company did not have any material differences between the actual experience and expected experience for the significant assumptions used in the computation of the liability for future policy benefits.

35

The amount of undiscounted expected gross premiums and expected future benefit payments for long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

In millions	September 30, 2023		September 30, 2022
Large case pensions
Expected future benefit payments	$	3,337	$	3,622
Expected gross premiums	—		—
Long-term care
Expected future benefit payments	$	3,237	$	3,269
Expected gross premiums	419		439

The weighted-average interest rate used in the measurement of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions
Interest accretion rate	4.20%	4.20%
Current discount rate	5.86%	5.42%
Long-term care
Interest accretion rate	5.11%	5.11%
Current discount rate	5.99%	5.65%

The weighted-average durations (in years) of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions	7.4	7.4
Long-term care	12.2	12.8

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Policyholders’ Funds

The following table shows the components of the change in policyholders’ funds related to long-duration insurance contracts, which are included in policyholders’ funds and other long-term liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions, except weighted average crediting rate	2023		2022
Policyholders’ funds, beginning of the period	$	345	$	522
Deposits received	1		10
Policy charges	(2)		(1)
Surrenders and withdrawals	(23)		(27)
Interest credited	9		10
Change in net unrealized losses	(4)		(163)
Other	(23)		(18)
Policyholders’ funds, end of the period	$	303	$	333
Weighted average crediting rate	4.40%		4.80%
Net amount at risk	$	—	$	—
Cash surrender value	$	324	$	337

Separate Accounts

The following table shows the fair value of assets, by major investment category, supporting Separate Accounts as of September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	153	$	156
Debt securities:
U.S. government securities	671		717
States, municipalities and political subdivisions	26		27
U.S. corporate securities	1,610		1,667
Foreign securities	198		201
Residential mortgage-backed securities	37		41
Commercial mortgage-backed securities	6		6
Other asset-backed securities	15		18
Total debt securities	2,563		2,677
Common/collective trusts	443		480
Total (1)	$	3,159	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

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The following table shows the components of the change in Separate Accounts liabilities during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Separate Accounts liability, beginning of the period	$	3,228	$	5,087
Premiums and deposits	657		636
Surrenders and withdrawals	(7)		(576)
Benefit payments	(714)		(711)
Investment (earnings) losses	42		(1,057)
Net transfers from general account	4		7
Other	(10)		(68)
Separate Accounts liability, end of the period	$	3,200	$	3,318
Cash surrender value, end of the period	$	2,136	$	2,153

The Company did not recognize any gains or losses on assets transferred to Separate Accounts during the nine months ended September 30, 2023 and 2022.

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8.Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Long-term debt
2.8% senior notes due June 2023	$	—	$	1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
5% senior notes due February 2026	1,500		—
0% convertible senior notes due March 2026	3		—
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
5% senior notes due January 2029	1,000		—
3.25% senior notes due August 2029	1,750		1,750
5.125% senior notes due February 2030	1,500		—
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
5.25% senior notes due January 2031	750		—
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
5.25% senior notes due February 2033	1,750		—
5.3% senior notes due June 2033	1,250		—
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
5.625% senior notes due February 2053	1,250		—
5.875% senior notes due June 2053	1,250		—

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6% senior notes due June 2063	750		—
Finance lease liabilities	1,493		1,465
Other	309		314
Total debt principal	62,479		52,753
Debt premiums	190		200
Debt discounts and deferred financing costs	(755)		(696)
	61,914		52,257
Less:
Current portion of long-term debt	(2,132)		(1,778)
Long-term debt (1)	$	59,782	$	50,479

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Short-term Borrowings

Term Loan Agreement

On May 1, 2023, the Company entered into a 364-day $5.0 billion term loan agreement. The term loan agreement allows for borrowings at various rates that are dependent, in part, on the Company’s debt ratings. On May 2, 2023, the Company borrowed $5.0 billion at an interest rate of approximately 6.2% under the term loan agreement to fund a portion of the Oak Street Health acquisition purchase price. On June 2, 2023, the Company repaid the outstanding balance under the term loan agreement.

Long-term Borrowings

2023 Notes

On June 2, 2023, the Company issued $1.0 billion aggregate principal amount of 5.0% senior notes due January 2029, $750 million aggregate principal amount of 5.25% senior notes due January 2031, $1.25 billion aggregate principal amount of 5.3% senior notes due June 2033, $1.25 billion aggregate principal amount of 5.875% senior notes due June 2053 and $750 million aggregate principal amount of 6.0% senior notes due June 2063 for total proceeds of approximately $4.9 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used, along with cash on hand, to repay the outstanding balance under the term loan agreement described above.

On February 21, 2023, the Company issued $1.5 billion aggregate principal amount of 5.0% senior notes due February 2026, $1.5 billion aggregate principal amount of 5.125% senior notes due February 2030, $1.75 billion aggregate principal amount of 5.25% senior notes due February 2033 and $1.25 billion aggregate principal amount of 5.625% senior notes due February 2053 for total proceeds of approximately $6.0 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used to fund general corporate purposes, including a portion of the Signify Health Acquisition purchase price.

Oak Street Health Convertible Notes

Prior to the Oak Street Health Acquisition, Oak Street Health held 0% convertible senior notes with an aggregate principal amount of $920 million (the “Convertible Notes”), which were assumed by the Company in connection with the Oak Street Health Acquisition. The Oak Street Health Acquisition constituted a fundamental change in the Convertible Notes giving the holders the right to require the Company to repurchase the Convertible Notes. The repurchase price was an amount in cash equal to 100% of the principal amount of the Convertible Notes. On May 31, 2023, the Company issued a notice of repurchase to the holders of the Convertible Notes. In connection with this notice, $917 million of the Convertible Notes were submitted for repurchase and settled on July 21, 2023, with $3 million remaining outstanding.

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9.Shareholders’ Equity

Share Repurchases

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

In billions Authorization Date	Authorized		Remaining as of September 30, 2023
November 17, 2022 (“2022 Repurchase Program”)	$	10.0	$	10.0
December 9, 2021 (“2021 Repurchase Program”)	10.0		4.5

Each of the share Repurchase Programs was effective immediately and permit 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. Both the 2022 and 2021 Repurchase Programs can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2023 and 2022, the Company repurchased an aggregate of 22.8 million shares of common stock for approximately $2.0 billion and an aggregate of 19.1 million shares of common stock for approximately $2.0 billion, respectively, both pursuant to the 2021 Repurchase Program. This activity includes the share repurchases under the ASR transactions described below.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $2.0 billion fixed dollar ASR with Citibank, N.A.. Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $2.0 billion notional amount of the ASR or approximately 17.4 million shares at a price of $92.19 per share, which were placed into treasury stock in January 2023. The ASR was accounted for as an initial treasury stock transaction for $1.6 billion and a forward contract for $0.4 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2023, the Company received approximately 5.4 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $2.0 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury and the forward contract was reclassified from capital surplus to treasury stock in February 2023.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC. 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 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 $0.605 and $0.55 per share in the three months ended September 30, 2023 and 2022, respectively. Cash dividends declared by the Board were $1.815 and $1.65 per share in the nine months ended September 30, 2023 and 2022, 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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10.Other Comprehensive Income (Loss)

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,113)	$	(1,199)	$	(1,519)	$	778
Adoption of new accounting standard ($0, $0, $0, $26 pretax) (1)	—		—		—		20
Other comprehensive loss before reclassifications ($(475), $(814), $(310), $(3,361) pretax)	(478)		(725)		(313)		(2,852)
Amounts reclassified from accumulated other comprehensive income (loss) ($157, $99, $398, $253 pretax) (2)	157		88		398		218
Other comprehensive income (loss)	(321)		(637)		85		(2,634)
End of period balance	(1,434)		(1,836)		(1,434)		(1,836)
Change in discount rate on long-duration insurance reserves:
Beginning of period balance	205		28		219		—
Adoption of new accounting standard ($0, $0, $0, $(838) pretax) (1)	—		—		—		(651)
Other comprehensive income before reclassifications ($233, $321, $210, $1,195 pretax)	181		250		167		929
Other comprehensive income	181		250		167		929
End of period balance	386		278		386		278
Foreign currency translation adjustments:
Beginning of period balance	1		2		—		—
Other comprehensive loss before reclassifications	(2)		(7)		(1)		(5)
Other comprehensive loss	(2)		(7)		(1)		(5)
End of period balance	(1)		(5)		(1)		(5)
Net cash flow hedges:
Beginning of period balance	252		234		239		222
Other comprehensive income before reclassifications ($0, $13, $25, $37 pretax)	—		10		19		28
Amounts reclassified from accumulated other comprehensive income ($(5), $(2), $(13), $(10) pretax) (3)	(4)		(2)		(10)		(8)
Other comprehensive income (loss)	(4)		8		9		20
End of period balance	248		242		248		242
Pension and other postretirement benefits:
Beginning of period balance	(203)		(34)		(203)		(35)
Amounts reclassified from accumulated other comprehensive loss ($0, $1, $0, $2 pretax) (4)	—		1		—		2
Other comprehensive income	—		1		—		2
End of period balance	(203)		(33)		(203)		(33)
Total beginning of period accumulated other comprehensive income (loss)	(858)		(969)		(1,264)		965
Adoption of new accounting standard (1)	—		—		—		(631)
Total other comprehensive income (loss)	(146)		(385)		260		(1,688)
Total end of period accumulated other comprehensive loss	$	(1,004)	$	(1,354)	$	(1,004)	$	(1,354)

42

_____________________________________________

(1)Reflects the adoption of ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the nine months ended September 30, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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

(3)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 $15 million net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(4)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

11.Earnings (Loss) Per Share

Earnings (loss) per share is computed using the treasury stock method. For periods in which the Company reports net income, diluted earnings per share is determined using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. Stock options and stock appreciation rights to purchase 9 million and 7 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2023, respectively, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, stock options and stock appreciation rights to purchase 4 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings (loss) per share for each of the three and nine-month periods ended September 30, 2022. In addition, due to the net loss attributable to CVS Health in the three months ended September 30, 2022, 8 million potentially dilutive common equivalent shares were excluded from the calculation of diluted loss per share, as the impact of these shares was antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2023		2022		2023		2022
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	2,261	$	(3,406)	$	6,298	$	1,977
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,287		1,315		1,284		1,313
Restricted stock units and performance stock units	2		—		3		6
Stock options and stock appreciation rights	1		—		2		5
Weighted average shares, diluted	1,290		1,315		1,289		1,324
Earnings (loss) per share:
Basic	$	1.76	$	(2.59)	$	4.90	$	1.51
Diluted	$	1.75	$	(2.59)	$	4.88	$	1.49

12.Commitments and Contingencies

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. As of September 30, 2023, the Company guaranteed 63 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 2035.

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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 the coronavirus disease 2019 (“COVID-19”) pandemic had 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 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”), the U.S. Federal Trade Commission (the “FTC”) 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. Other than the controlled substances litigation accruals described below, none of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s unaudited condensed consolidated balance sheets.

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

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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 is 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 and government payors, and are based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. In October 2022, one of the litigating shareholders made a litigation demand to the Board related to these and other issues after his amended derivative complaint was dismissed for failing to demonstrate demand futility. 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 state Attorneys 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 majority of these cases have now been transferred into a multi-district litigation in the U.S. District Court for the District of New Jersey. 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, the FTC and 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 2022, the Company agreed to a formal settlement agreement, the financial amounts of which were agreed to in principle in October 2022, with a leadership group of a number of state Attorneys General and the Plaintiffs’ Executive Committee. Upon finalization, the agreement resolves substantially all opioid claims against Company entities by participating states and political subdivisions but not private plaintiffs, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The maximum amount payable by the Company under the settlement is approximately $4.3 billion in opioid remediation and $625 million in attorneys’ fees and costs and additional remediation. The amounts are payable over 10 years, beginning in 2023. The agreement also contains injunctive terms relating to the dispensing of opioid medications. The settlement agreement is available at nationalopioidsettlement.com.

Upon reaching an agreement in principle in October 2022, the Company concluded that settlement of opioid claims by governmental entities and tribes was probable, and the loss related thereto could be reasonably estimated. As a result of that conclusion, and its assessment of certain other opioid-related claims including those for which the Company reached agreement in August and September 2022, the Company recorded pre-tax charges of $5.3 billion during the year ended December 31, 2022. Settlement accruals expected to be paid within twelve months from the balance sheet date are classified as accrued expenses on the unaudited condensed consolidated balance sheets and settlement accruals expected to be paid greater than

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twelve months from the balance sheet date are classified as other long-term liabilities on the unaudited condensed consolidated balance sheets.

In June 2023, the Company elected to move forward with a final settlement agreement, the financial amounts of which were agreed to in principle in October 2022, to resolve claims brought by participating states and political subdivisions such as counties, cities, and towns, but not by private plaintiffs, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The agreement became effective in June 2023.

Forty-five states, the District of Columbia, and all eligible United States territories are participating in the settlement. A high percentage of eligible subdivisions within the participating states also have elected to join the settlement. The Company has separately entered into settlement agreements with four states – Florida, West Virginia, New Mexico, and Nevada – and a high percentage of eligible subdivisions within those states also have elected to participate.

The final settlement agreement contains certain contingencies related to payment obligations. Because these contingencies are inherently unpredictable, the assessment requires judgments about future events. The amount of ultimate loss may differ from the amount accrued by the Company.

The State of Maryland has not elected to participate in the settlement. Subdivisions within the State of Maryland thus may not participate in the settlement. The State of Maryland has issued a civil subpoena for information from the Company.

In December 2022, the Company also agreed to a formal settlement agreement with a leadership group representing tribes throughout the United States. The agreement resolves substantially all opioid claims against Company entities by such tribes. The maximum amount payable by the Company under the settlement is $113 million in opioid remediation and $16 million in attorneys’ fees and costs, payable over 10 years. The Company also entered into a separate settlement with the Cherokee Nation.

These settlements resolve a majority of the cases against the Company that had been pending in the consolidated multidistrict litigation captioned In re National Prescription Opiate Litigation (MDL No. 2804) pending in the U.S. District Court for the Northern District of Ohio. However, certain opioid-related cases against the Company remain pending in the multidistrict litigation and in various state courts, including those brought by non-participating subdivisions and private parties such as hospitals and third-party payors. The Company continues to defend those cases.

In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; in August 2022, the court issued a judgment jointly against the three defendants in the amount of $651 million to be paid over 15 years and also ordered certain injunctive relief. The Company is appealing the judgment and has not accrued a liability for this matter.

Because of the many uncertainties associated with any settlement arrangement or other resolution of opioid-related litigation matters, and because the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time. The outcome of these legal matters could have a material effect on the Company’s business, financial condition, operating results and/or cash flows.

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. The DOJ subsequently served additional DEA administrative subpoenas relating to controlled substances. The DOJ also served the Company with additional CIDs relating to controlled substances. 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,

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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.

U.S. ex rel. Gill et al. v. CVS Health Corp. et al. (U.S. District Court for the Northern District of Illinois). In July 2022, the Delaware Attorney General’s Office moved for partial intervention as to allegations under the Delaware false claims act related to not escheating alleged overpayments in this previously sealed qui tam case. The federal government and the remaining states declined to intervene on other additional theories in the relator’s complaint. The Company is defending itself against all of the 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.

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 (including COVID-19 testing) and/or otherwise allege that the Company failed to timely or appropriately pay or administer claims and benefits (including the Company’s post payment audit and collection practices). 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 claims payments, 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, in the “Notice of Final Payment Error Calculation for Part C Medicare Advantage Risk Adjustment Validation Data (RADV) Contract-Level Audits,” CMS revised its audit methodology for RADV contract-level audits to determine refunds payable by Medicare Advantage plans for contract year 2011 and forward. Under the revised methodology, among other things, CMS announced extrapolation of the error rate identified in the audit sample along with the application of a process to account for errors in the government’s traditional fee-for-service Medicare program (“FFS Adjuster”). For contract years prior to 2011, CMS did not extrapolate sample error rates to the entire contract, nor did CMS propose to apply a FFS adjuster. By applying the FFS Adjuster, Medicare Advantage organizations would have been liable for repayments only to the extent that their extrapolated payment errors exceeded the error rate in Original Medicare, which could have impacted the extrapolated repayments to which Medicare Advantage organizations are subject. This revised contract-level audit methodology increased

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the Company’s exposure to premium refunds to CMS based on incomplete medical records maintained by providers. In the RADV audit methodology CMS used from 2011-2013, CMS selected only a few of the Company’s Medicare Advantage contracts for various contract years for contract-level RADV audits. In October 2018, CMS in the proposed rule (“Proposed Rule”) announced a new methodology for RADV audits targeting certain health conditions and members with many diagnostic conditions along with extrapolation for the error rates identified without use of a FFS Adjuster. While the rule was under proposal, CMS initiated contract-level RADV audits for the years 2014 and 2015 with this new RADV methodology without a final rule.

On January 30, 2023, CMS released the final rule (“RADV Audit Rule”), announcing it may use extrapolation for payment years 2018 forward, for both RADV audits and OIG audits, and eliminated the application of a FFS Adjuster in Part C contract-level RADV audits of Medicare Advantage organizations. In the RADV Audit Rule, CMS indicated that it will use more than one audit methodology going forward and indicated CMS will audit contracts it believes are at the highest risk for overpayments based on its statistical modeling, citing a 2016 Governmental Accountability Office report that recommended selection of contract-level RADV audits with a focus on contracts likely to have high rates of improper payment, the highest coding intensity scores, and contracts with high levels of unsupported diagnoses from prior RADV audits.

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 for years prior to 2018 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 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.

The RADV Audit Rule does not apply to the CMS Part C Improper Payment Measures audits nor the HHS-RADV programs.

Medicare and Medicaid Litigation and Investigations

The Company has received CIDs from the Civil Division of the DOJ in connection with investigations of the Company’s identification and/or submission of diagnosis codes related to risk adjustment payments, including patient chart review processes, under Parts C and D of the Medicare program. The Company is cooperating with the government and providing documents and information in response to these CIDs.

In May 2017, the Company received a CID from the U.S. Attorney’s Office for the Southern District of New York 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.

In November 2021, prior to its acquisition by the Company, Oak Street Health received a CID from the DOJ in connection with an investigation of possible false claims submitted to Medicare related to Oak Street Health’s relationships with third-party marketing agents and Oak Street Health’s provision of free transportation to federal health care beneficiaries. The Company has been cooperating with the government and has provided documents and information in response to the CID.

In January 2022, the U.S. Attorney’s Office for the District of Massachusetts issued a subpoena to Aetna Life Insurance Company seeking, among other things, information in connection with its relationship with certain brokers, and the Company may receive similar inquiries in the future. The Company is cooperating with the subpoena.

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. Since filing, several of the cases have been consolidated, and two have resolved, including the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), the dismissal of which the First Circuit affirmed in August 2022. The Company and its current and former officers and directors are defending themselves against remaining claims. The Company

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has moved to dismiss the amended complaint in In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford). In In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich), the court granted the Company’s motion to dismiss in February 2023 and the plaintiffs have filed a notice of appeal.

Beginning in December 2021, the Company has received three demands for inspection of books and records pursuant to Delaware Corporation Law Section 220, as well as a derivative complaint (Vladimir Gusinsky Revocable Trust v. Lynch, et al.) that was filed in January 2023. The demands and the complaint purport to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids. The Company and its current and former officers and directors are defending themselves against these matters.

In January 2022, a shareholder class action complaint was filed in the Northern District of Illinois, Allison v. Oak Street Health, Inc., et al. Defendants include Oak Street Health and certain of its pre-acquisition officers and directors. The putative plaintiffs assert causes of action under various securities laws premised on allegations that defendants made omissions and misrepresentations to investors relating to marketing conduct they allege may violate the False Claims Act. The Company and the individual defendants are defending themselves against these claims.

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, discrimination 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

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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.

13.Segment Reporting

The Company has three operating segments, Health Care Benefits, Health Services and Pharmacy & Consumer Wellness, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and 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. Adjusted operating income is defined as operating income (loss) (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. Effective for the first quarter of 2023, adjusted operating income also excludes the impact of net realized capital gains or losses. See the reconciliations of consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income below for further context regarding the items excluded from operating income (loss) 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.

Segment financial information for the three and nine months ended September 30, 2022 has been revised to conform with current period presentation for the following items:

•The realignment of the Company’s segments to correspond with changes made to its operating model as described in Note 1 “Significant Accounting Policies,” including the discontinuance of the former Maintenance Choice segment reporting practice as described in Note (1) of the table included on the next page.

•The impact of the adoption of the long-duration insurance accounting standard, which the Company adopted on January 1, 2023 using a modified retrospective transition method, as described in Note 1 “Significant Accounting Policies.”

•The exclusion of the impact of net realized capital gains or losses from adjusted operating income, as described above.

The impact of these items on segment financial information for the three and nine months ended September 30, 2022 is reflected in the “Adjustments” lines of the table included on the next page.

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	Three Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Adjustments	(15)		38		531		—		(554)		—
Total revenues, as adjusted	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Adjusted operating income (loss), as previously reported	$	1,544	$	1,877	$	1,398	$	(417)	$	(169)	$	4,233
Adjustments	97		(182)		3		29		169		116
Adjusted operating income (loss), as adjusted	$	1,641	$	1,695	$	1,401	$	(388)	$	—	$	4,349
	Nine Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Adjustments	(45)		318		1,471		—		(1,744)		—
Total revenues, as adjusted	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Adjusted operating income (loss), as previously reported	$	5,126	$	5,368	$	4,865	$	(1,277)	$	(556)	$	13,526
Adjustments	299		(372)		(181)		130		556		432
Adjusted operating income (loss), as adjusted	$	5,425	$	4,996	$	4,684	$	(1,147)	$	—	$	13,958

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(1)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment. Prior to January 1, 2023, intersegment adjusted operating income eliminations occurred when members of the Health Services segment’s clients enrolled in Maintenance Choice elected to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurred, both the Health Services and Pharmacy & Consumer Wellness segments recorded the adjusted operating income on a stand-alone basis. Effective January 1, 2023, the adjusted operating income associated with such transactions is reported only in the Pharmacy & Consumer Wellness segment, therefore no adjusted operating income elimination is required. Prior period financial information has been recast to conform with current period presentation.

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

In millions	Health Care Benefits		Health  Services (1)		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2023
Revenues from external customers	$	26,089	$	44,064	$	19,321	$	13	$	—	$	89,487
Intersegment revenues	20		2,827		9,553		—		(12,400)		—
Net investment income (loss)	187		—		(2)		92		—		277
Total revenues	26,296		46,891		28,872		105		(12,400)		89,764
Adjusted operating income (loss)	1,536		1,878		1,389		(347)		—		4,456
September 30, 2022
Revenues from external customers	$	22,375	$	40,544	$	18,007	$	32	$	—	$	80,958
Intersegment revenues	20		2,710		9,240		—		(11,970)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,496		43,254		27,237		142		(11,970)		81,159
Adjusted operating income (loss)	1,641		1,695		1,401		(388)		—		4,349
Nine Months Ended
September 30, 2023
Revenues from external customers	$	78,302	$	127,907	$	56,826	$	43	$	—	$	263,078
Intersegment revenues	62		9,790		28,756		—		(38,608)		—
Net investment income (loss)	556		—		(4)		333		—		885
Total revenues	78,920		137,697		85,578		376		(38,608)		263,963
Adjusted operating income (loss)	4,901		5,452		3,936		(982)		—		13,307
September 30, 2022
Revenues from external customers	$	67,993	$	116,801	$	53,215	$	97	$	—	$	238,106
Intersegment revenues	60		9,006		26,710		—		(35,776)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,331		125,807		79,881		378		(35,776)		238,621
Adjusted operating income (loss)	5,425		4,996		4,684		(1,147)		—		13,958

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(1)Total revenues of the Health Services segment include approximately $3.2 billion and $2.9 billion of retail co-payments for the three months ended September 30, 2023 and 2022, respectively. Total revenues of the Health Services segment include approximately $10.7 billion and $9.8 billion of retail co-payments for the nine months ended September 30, 2023 and 2022, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment.

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The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Operating income (loss) (GAAP measure)	$	3,690	$	(3,919)	$	10,370	$	4,295
Amortization of intangible assets (1)	509		458		1,396		1,380
Net realized capital losses (2)	142		110		345		283
Acquisition-related transaction and integration costs (3)	94		—		294		—
Restructuring charges (4)	11		—		507		—
Office real estate optimization charges (5)	10		—		46		—
Loss on assets held for sale (6)	—		2,480		349		2,521
Opioid litigation charges (7)	—		5,220		—		5,704
Gain on divestiture of subsidiary (8)	—		—		—		(225)
Adjusted operating income	$	4,456	$	4,349	$	13,307	$	13,958

_____________________________________________

(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)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in the unaudited condensed consolidated statements of operations in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do 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. Accordingly, the Company believes excluding net realized capital gains and losses 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.

(3)During the three and nine months ended September 30, 2023, the acquisition-related transaction and integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related transaction and integration costs are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(4)During the three months ended September 30, 2023, the restructuring charges are comprised of a stock-based compensation charge. During the nine months ended September 30, 2023, the restructuring charges also include severance and employee-related costs and asset impairment charges. During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives. The restructuring charges are reflected within the Corporate/Other segment.

(5)During the three and nine months ended September 30, 2023, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the planned reduction of corporate office real estate space in response to the Company’s new flexible work arrangement. The office real estate optimization charges are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Health Care Benefits, Health Services and Corporate/Other segments.

(6)During the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the Company’s LTC reporting unit within the Pharmacy & Consumer Wellness segment. During 2022, the Company determined that its LTC business was no longer a strategic asset and committed to a plan to sell it, at which time the LTC business met the criteria for held-for-sale accounting and its net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell, and, accordingly the Company recorded a loss on assets held for sale during the third quarter of 2022. During the first quarter of 2023, a loss on assets held for sale was recorded to write down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. As of September 30, 2023, the Company determined the LTC business no longer met the criteria for held-for-sale accounting and accordingly the net assets associated with the LTC business were reclassified to held and used at their respective fair values. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Company’s international health care business domiciled in Thailand (“Thailand business”), which was included in the Commercial Business reporting unit in the Health Care Benefits segment. The sale of the Thailand business closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(7)During the three and nine months ended September 30, 2022, the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and government entities. The opioid litigation charges are reflected within the Corporate/Other segment.

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(8)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex Holdings, Inc., which the Company sold on June 1, 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

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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 September 30, 2023, the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2023 and 2022, the related condensed consolidated statements of shareholders’ equity for the three-month periods ended March 31, 2023 and 2022, June 30, 2023 and 2022 and September 30, 2023 and 2022, the related condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2023 and 2022, 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, 2022, the related consolidated statements of operations, comprehensive income, shareholders’ equity and cash flows for the year then ended, and the related notes (not presented herein); and in our report dated February 8, 2023, except for Note 8 and Note 18, as to which the date is May 25, 2023, we expressed an unqualified audit opinion on those consolidated financial statements.

As described in Note 1 to the Company’s condensed consolidated interim financial statements, on January 1, 2023, the Company adopted ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts.

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

November 1, 2023

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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 leading diversified health solutions company reshaping health care to help make healthier happen for more Americans. In an increasingly connected and digital world, CVS Health is meeting people wherever they are and changing health care to meet their needs. The Company has more than 9,000 retail locations, more than 1,000 walk-in medical clinics, 192 primary care 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 more than 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 is a leader in key segments of health care through its foundational businesses and is creating new sources of value by expanding into next generation care delivery and health services, with a goal of improving satisfaction levels for both providers and consumers. The Company believes its integrated health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

In August 2023, the Company announced the launch of CordavisTM, a wholly owned subsidiary that will work directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products. Through Cordavis, the Company will help to ensure the consistent long-term supply of FDA approved, affordable biosimilars for the U.S. pharmaceutical market.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations. This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. Prior period segment financial information has been recast to conform with the current period presentation.

Following the segment realignment described above, the Company’s four reportable segments are as follows: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness 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 and Medicaid health care management 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. The Company entered Public Exchanges in four additional states effective January 2023 and will enter an additional five states effective January 2024.

Overview of the Health Services Segment

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides 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 and provides various administrative, management

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and reporting services to pharmaceutical manufacturers. The Health Services segment’s clients are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, the U.S. Centers for Medicare & Medicaid Services (“CMS”), plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities.

Overview of the Pharmacy & Consumer Wellness Segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of September 30, 2023, the Pharmacy & Consumer Wellness segment operated more than 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.

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 transaction and 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 experience higher than previously expected medical cost trend in Medicare Advantage for the remainder of 2023 and is expected to be impacted by higher-than-expected Public Exchange growth. Medical cost trends remain consistent with pricing in Commercial and Medicaid.

•The Health Services segment is expected to continue to benefit from the Company’s ability to drive further improvements in purchasing economics, which leads to lower pharmacy costs for our customers, and pharmacy network volume. These increases are expected to be partially offset by continued client price improvements and the evolving regulation of pharmacy pricing, as well as pharmaceutical manufacturer policies restricting 340B discounts. The dilutive impact of the acquisition of Oak Street Health, Inc. (“Oak Street Health”) is expected to be partially offset by the accretive impact of the acquisition of Signify Health, Inc. (“Signify Health”) during the remainder of the year.

•The Pharmacy & Consumer Wellness segment is expected to benefit from higher than previously expected contributions from seasonal immunizations. The segment anticipates lower-than-expected prescription volume in the remainder of 2023, primarily attributable to Medicaid redeterminations.

•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, including the enterprise-wide restructuring program initiated in the second quarter of 2023, 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.

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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.

Operating Results

The following discussion explains the material changes in the Company’s operating results for the three and nine months ended September 30, 2023 and 2022, and the significant developments affecting the Company’s financial condition since December 31, 2022. 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 for the year ended December 31, 2022, which were revised to reflect the impact of the changes discussed in “Segment Analysis” below and are included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 25, 2023 (the “May 2023 8-K”).

Summary of Consolidated Financial Results

									Change
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30, 2023 vs 2022				Nine Months Ended September 30, 2023 vs 2022
In millions	2023		2022		2023		2022		$		%		$		%
Revenues:
Products	$	61,298	$	57,643	$	179,984	$	166,959	$	3,655	6.3	%	$	13,025	7.8	%
Premiums	24,657		21,003		74,117		63,894		3,654		17.4	%	10,223		16.0	%
Services	3,532		2,312		8,977		7,253		1,220		52.8	%	1,724		23.8	%
Net investment income	277		201		885		515		76		37.8	%	370		71.8	%
Total revenues	89,764		81,159		263,963		238,621		8,605		10.6	%	25,342		10.6	%
Operating costs:
Cost of products sold	54,688		50,365		159,679		145,164		4,323		8.6	%	14,515		10.0	%
Health care costs	21,499		17,401		63,729		52,814		4,098		23.6	%	10,915		20.7	%
Restructuring charges	11		—		507		—		11		100.0	%	507		100.0	%
Opioid litigation charges	—		5,220		—		5,704		(5,220)		(100.0)	%	(5,704)		(100.0)	%
Loss on assets held for sale	—		2,480		349		2,521		(2,480)		(100.0)	%	(2,172)		(86.2)	%
Operating expenses	9,876		9,612		29,329		28,123		264		2.7	%	1,206		4.3	%
Total operating costs	86,074		85,078		253,593		234,326		996		1.2	%	19,267		8.2	%
Operating income (loss)	3,690		(3,919)		10,370		4,295		7,609		194.2	%	6,075		141.4	%
Interest expense	693		566		1,968		1,735		127		22.4	%	233		13.4	%
Other income	(22)		(41)		(66)		(126)		19		46.3	%	60		47.6	%
Income (loss) before income tax provision (benefit)	3,019		(4,444)		8,468		2,686		7,463		167.9	%	5,782		215.3	%
Income tax provision (benefit)	754		(1,045)		2,147		691		1,799		172.2	%	1,456		210.7	%
Net income (loss)	2,265		(3,399)		6,321		1,995		5,664		166.6	%	4,326		216.8	%
Net income attributable to noncontrolling interests	(4)		(7)		(23)		(18)		3		42.9	%	(5)		(27.8)	%
Net income (loss) attributable to CVS Health	$	2,261	$	(3,406)	$	6,298	$	1,977	$	5,667	166.4	%	$	4,321	218.6	%

Commentary - Three Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues increased $8.6 billion, or 10.6%, in the three months ended September 30, 2023 compared to the prior year driven by growth across all segments.

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

Operating expenses

•Operating expenses increased $264 million, or 2.7%, in the three months ended September 30, 2023 compared to the prior year. The increase in operating expenses was primarily due to increased operating expenses to support growth in the business, operating expenses associated with Oak Street Health and Signify Health, as well as acquisition-related transaction and integration costs recorded in the current year. These increases were partially offset by gains from anti-trust legal settlements recorded in the three months ended September 30, 2023.

•Operating expenses as a percentage of total revenues were 11.0% in the three months ended September 30, 2023, a decrease of 80 basis points compared to the prior year. The decrease in operating expenses as a percentage of total revenues was primarily due to the increases in total revenues described above.

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

Operating income (loss)

•During the three months ended September 30, 2023, the Company generated operating income of $3.7 billion compared to a $3.9 billion operating loss in the prior year. The change was primarily driven by the absence of a $5.2 billion opioid litigation charge and a $2.5 billion loss on assets held for sale related to the write-down of the Company’s Omnicare® long-term care business (“LTC business”), both of which were recorded in the 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 increased $127 million, or 22.4%, due to higher debt in the three months ended September 30, 2023 to fund the acquisitions of Signify Health and Oak Street Health. See “Liquidity and Capital Resources” later in this report for additional information.

Income tax provision (benefit)

•The Company recorded income tax expense at an effective income tax rate of 25.0% for the three months ended September 30, 2023, compared to an income tax benefit at an effective tax rate of 23.5% during the prior year due to the pre-tax loss incurred in the three months ended September 30, 2022. The difference in the effective income tax rate was primarily due to certain nondeductible legal charges recorded in the prior year.

Commentary - Nine Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues increased $25.3 billion, or 10.6%, in the nine months ended September 30, 2023 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 $1.2 billion, or 4.3%, in the nine months ended September 30, 2023 compared to the prior year. The increase in operating expenses was primarily due to increased operating expenses to support growth in the business, operating expenses associated with Oak Street Health and Signify Health, incremental investments in business operations, acquisition-related transaction and integration costs recorded in the current year and the absence of a $225 million pre-tax gain on the sale of PayFlex Holdings, Inc. (“PayFlex”) recorded in the prior year. These increases were partially offset by gains from anti-trust legal settlements as well as the favorable impact of business initiatives in the current year.

•Operating expenses as a percentage of total revenues were 11.1% in the nine months ended September 30, 2023, a decrease of 70 basis points compared to the prior year. The decrease in operating expenses as a percentage of total revenues was primarily due to the increases in total revenues described above.

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

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Operating income

•Operating income increased $6.1 billion, or 141.4%, in the nine months ended September 30, 2023 compared to the prior year. The increase in operating income was primarily driven by the absence of $5.7 billion in opioid litigation charges recorded in the prior year and increases in the Pharmacy and Consumer Wellness segment, primarily driven by the absence of the $2.5 billion loss on assets held for sale recorded in the prior year related to the write-down of the LTC business which was partially offset by continued pharmacy reimbursement pressure and decreased COVID-19 vaccinations and diagnostic testing compared to the prior year. These increases in operating income were partially offset by declines in the Health Care Benefits segment, including the absence of the $225 million pre-tax gain on the sale of PayFlex recorded in the prior year, as well as the restructuring charges and acquisition-related transaction and integration costs recorded in the current 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 increased $233 million, or 13.4%, due to higher debt in the nine months ended September 30, 2023 to fund the acquisitions of Signify Health and Oak Street Health. See “Liquidity and Capital Resources” later in this report for additional information.

Income tax provision

•The effective income tax rate was 25.4% for the nine months ended September 30, 2023 compared to 25.7% for the nine months ended September 30, 2022. The decrease in the effective income tax rate was primarily due to certain nondeductible legal charges and basis differences on the sale of PayFlex in the prior year, partially offset by the absence of the impact of certain discrete tax items concluded in the first and third quarters 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 13 ‘‘Segment Reporting’’ to the unaudited condensed consolidated financial statements.

The Company has three operating segments, Health Care Benefits, Health Services and Pharmacy & Consumer Wellness, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and the Company’s 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. Adjusted operating income is defined as operating income (loss) as measured by accounting principles generally accepted in the United States of America (“GAAP”) 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. Effective for the first quarter of 2023, adjusted operating income also excludes the impact of net realized capital gains or losses. See the reconciliations of operating income (loss) (GAAP measure) to adjusted operating income below for further context regarding the items excluded from operating income (loss) 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.

Segment financial information for the three and nine months ended September 30, 2022 has been revised to conform with current period presentation for the following items:

•The realignment of the Company’s segments to correspond with changes made to its operating model as described in Note 1 ‘‘Significant Accounting Policies’’ to the unaudited condensed consolidated financial statements, including the discontinuance of the former Maintenance Choice segment reporting practice as described in Note (2) of the table included on the next page.

•The impact of the adoption of the long-duration insurance accounting standard, which the Company adopted on January 1, 2023 using a modified retrospective transition method, as described in Note 1 ‘‘Significant Accounting Policies’’ to the unaudited condensed consolidated financial statements.

•The exclusion of the impact of net realized capital gains or losses from adjusted operating income, as described above.

The impact of these items on segment financial information for the three and nine months ended September 30, 2022 is reflected in the “Adjustments” lines of the table included on the next page.

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

In millions	Health Care Benefits		Health Services (1)		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2023
Total revenues	$	26,296	$	46,891	$	28,872	$	105	$	(12,400)	$	89,764
Adjusted operating income (loss)	1,536		1,878		1,389		(347)		—		4,456
September 30, 2022
Total revenues, as previously reported	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Adjustments	(15)		38		531		—		(554)		—
Total revenues, as adjusted	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Adjusted operating income (loss), as previously reported	$	1,544	$	1,877	$	1,398	$	(417)	$	(169)	$	4,233
Adjustments	97		(182)		3		29		169		116
Adjusted operating income (loss), as adjusted	$	1,641	$	1,695	$	1,401	$	(388)	$	—	$	4,349
Nine Months Ended
September 30, 2023
Total revenues	$	78,920	$	137,697	$	85,578	$	376	$	(38,608)	$	263,963
Adjusted operating income (loss)	4,901		5,452		3,936		(982)		—		13,307
September 30, 2022
Total revenues, as previously reported	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Adjustments	(45)		318		1,471		—		(1,744)		—
Total revenues, as adjusted	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Adjusted operating income (loss), as previously reported	$	5,126	$	5,368	$	4,865	$	(1,277)	$	(556)	$	13,526
Adjustments	299		(372)		(181)		130		556		432
Adjusted operating income (loss), as adjusted	$	5,425	$	4,996	$	4,684	$	(1,147)	$	—	$	13,958

_____________________________________________

(1)Total revenues of the Health Services segment include approximately $3.2 billion and $2.9 billion of retail co-payments for the three months ended September 30, 2023 and 2022, respectively, and $10.7 billion and $9.8 billion of retail co-payments for the nine months ended September 30, 2023 and 2022, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment. Prior to January 1, 2023, intersegment adjusted operating income eliminations occurred when members of the Health Services segment’s clients enrolled in Maintenance Choice elected to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurred, both the Health Services and Pharmacy & Consumer Wellness segments recorded the adjusted operating income on a stand-alone basis. Effective January 1, 2023, the adjusted operating income associated with such transactions is reported only in the Pharmacy & Consumer Wellness segment, therefore no adjusted operating income elimination is required.

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

	Three Months Ended September 30, 2023
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Consolidated Totals
Operating income (loss) (GAAP measure)	$	1,115	$	1,727	$	1,322	$	(474)	$	3,690
Amortization of intangible assets (1)	294		150		65		—		509
Net realized capital losses (2)	119		—		2		21		142
Acquisition-related transaction and integration costs (3)	—		—		—		94		94
Restructuring charge (4)	—		—		—		11		11
Office real estate optimization charges (5)	8		1		—		1		10
Adjusted operating income (loss)	$	1,536	$	1,878	$	1,389	$	(347)	$	4,456

	Three Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Consolidated Totals
Operating income (loss) (GAAP measure)	$	1,260	$	1,654	$	(1,212)	$	(5,621)	$	(3,919)
Amortization of intangible assets (1)	294		41		123		—		458
Net realized capital losses (2)	87		—		10		13		110
Loss on assets held for sale (6)	—		—		2,480		—		2,480
Opioid litigation charges (7)	—		—		—		5,220		5,220
Adjusted operating income (loss)	$	1,641	$	1,695	$	1,401	$	(388)	$	4,349

	Nine Months Ended September 30, 2023
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Consolidated Totals
Operating income (loss) (GAAP measure)	$	3,683	$	5,132	$	3,388	$	(1,833)	$	10,370
Amortization of intangible assets (1)	883		316		195		2		1,396
Net realized capital losses (2)	296		—		4		45		345
Acquisition-related transaction and integration costs (3)	—		—		—		294		294
Restructuring charges (4)	—		—		—		507		507
Office real estate optimization charges (5)	39		4		—		3		46
Loss on assets held for sale (6)	—		—		349		—		349
Adjusted operating income (loss)	$	4,901	$	5,452	$	3,936	$	(982)	$	13,307

	Nine Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Consolidated Totals
Operating income (loss) (GAAP measure)	$	4,512	$	4,870	$	1,793	$	(6,880)	$	4,295
Amortization of intangible assets (1)	885		126		367		2		1,380
Net realized capital losses (2)	212		—		44		27		283
Loss on assets held for sale (6)	41		—		2,480		—		2,521
Opioid litigation charges (7)	—		—		—		5,704		5,704
Gain on divestiture of subsidiary (8)	(225)		—		—		—		(225)
Adjusted operating income (loss)	$	5,425	$	4,996	$	4,684	$	(1,147)	$	13,958

_____________________________________________

(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

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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)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in the unaudited condensed consolidated statements of operations in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do 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. Accordingly, the Company believes excluding net realized capital gains and losses 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.

(3)During the three and nine months ended September 30, 2023, the acquisition-related transaction and integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related transaction and integration costs are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(4)During the three months ended September 30, 2023, the restructuring charges are comprised of a stock-based compensation charge. During the nine months ended September 30, 2023, the restructuring charges also include severance and employee-related costs and asset impairment charges. During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives. The restructuring charges are reflected within the Corporate/Other segment.

(5)During the three and nine months ended September 30, 2023, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the planned reduction of corporate office real estate space in response to the Company’s new flexible work arrangement. The office real estate optimization charges are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Health Care Benefits, Health Services and Corporate/Other segments.

(6)During the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the Company’s LTC reporting unit within the Pharmacy & Consumer Wellness segment. During 2022, the Company determined that its LTC business was no longer a strategic asset and committed to a plan to sell it, at which time the LTC business met the criteria for held-for-sale accounting and its net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell, and, accordingly the Company recorded a loss on assets held for sale during the third quarter of 2022. During the first quarter of 2023, a loss on assets held for sale was recorded to write down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. As of September 30, 2023, the Company determined the LTC business no longer met the criteria for held-for-sale accounting and accordingly the net assets associated with the LTC business were reclassified to held and used at their respective fair values. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Company’s international health care business domiciled in Thailand (“Thailand business”), which was included in the Commercial Business reporting unit in the Health Care Benefits segment. The sale of the Thailand business closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(7)During the three and nine months ended September 30, 2022, the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and governmental entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(8)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex, which the Company sold on June 1, 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

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Health Care Benefits Segment

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

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2023 vs 2022					Nine Months Ended September 30, 2023 vs 2022
In millions, except percentages and basis points (“bps”)	2023			2022			2023			2022			$			%		$			%
Revenues:
Premiums	$	24,645		$	20,989		$	74,079		$	63,848		$	3,656		17.4	%	$	10,231		16.0	%
Services	1,464			1,406			4,285			4,205			58			4.1	%	80			1.9	%
Net investment income	187			101			556			278			86			85.1	%	278			100.0	%
Total revenues	26,296			22,496			78,920			68,331			3,800			16.9	%	10,589			15.5	%
Health care costs	21,114			17,512			63,329			53,100			3,602			20.6	%	10,229			19.3	%
MBR	85.7		%	83.4		%	85.5		%	83.2		%	230		bps			230		bps
Loss on assets held for sale	$	—		$	—		$	—		$	41		$	—		—	%	$	(41)		(100.0)	%
Operating expenses	4,067			3,724			11,908			10,678			343			9.2	%	1,230			11.5	%
Operating expenses as a % of total revenues	15.5		%	16.6		%	15.1		%	15.6		%
Operating income	$	1,115		$	1,260		$	3,683		$	4,512		$	(145)		(11.5)	%	$	(829)		(18.4)	%
Operating income as a % of total revenues	4.2		%	5.6		%	4.7		%	6.6		%
Adjusted operating income (1)	$	1,536		$	1,641		$	4,901		$	5,425		$	(105)		(6.4)	%	$	(524)		(9.7)	%
Adjusted operating income as a % of total revenues	5.8		%	7.3		%	6.2		%	7.9		%
Premium revenues (by business):
Government	$	17,208		$	15,433		$	52,680		$	47,379		$	1,775		11.5	%	$	5,301		11.2	%
Commercial	7,437			5,556			21,399			16,469			1,881			33.9	%	4,930			29.9	%

_____________________________________________

(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 September 30, 2023 vs. 2022

Revenues

•Total revenues increased $3.8 billion, or 16.9%, to $26.3 billion in the three months ended September 30, 2023 compared to the prior year driven by growth across all product lines.

Medical Benefit Ratio (“MBR”)

•Medical benefit ratio is calculated by dividing the Health Care Benefits segment’s health care costs by premium revenues and represents the percentage of premium revenues spent on medical benefits for the segment’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 segment’s Insured Health Care Benefits products.

•The MBR increased to 85.7% in the three months ended September 30, 2023 compared to 83.4% in the prior year driven by the impact of lower year-over-year prior period development and increased utilization in Medicare Advantage, including outpatient and supplemental benefits such as dental and behavioral health, as well as over-the-counter (“OTC”) and flex cards, compared to the prior year.

Operating expenses

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

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•Operating expenses increased $343 million, or 9.2%, in the three months ended September 30, 2023 compared to the prior year primarily driven by increased operating expenses to support the growth across all product lines described above, as well as incremental investments in the business, including investments in service capabilities and member experience.

•Operating expenses as a percentage of total revenues decreased to 15.5% in the three months ended September 30, 2023 compared to 16.6% in the prior year. The decrease in operating expenses as a percentage of total revenues was driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income decreased $105 million, or 6.4%, in the three months ended September 30, 2023 compared to the prior year reflecting increased utilization in Medicare Advantage, including the impact of lower year-over-year prior period development, partially offset by higher net investment income in the three months ended September 30, 2023 compared to the prior year.

Commentary - Nine Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues increased $10.6 billion, or 15.5%, to $78.9 billion in the nine months ended September 30, 2023 compared to the prior year driven by growth across all product lines.

Medical Benefit Ratio

•The MBR increased to 85.5% in the nine months ended September 30, 2023 compared to 83.2% in the prior year driven by increased outpatient utilization in Medicare Advantage when compared with pandemic influenced utilization levels in the prior year.

Loss on assets held for sale

•During the nine months ended September 30, 2022, the Company recorded a $41 million loss on assets held for sale on its Thailand business, which was included in the Commercial Business reporting unit within the Health Care Benefits segment.

Operating expenses

•Operating expenses increased $1.2 billion, or 11.5%, in the nine months ended September 30, 2023 compared to the prior year primarily driven by increased operating expenses to support the growth across all product lines described above, incremental investments in the business, including investments in service capabilities and member experience, as well as the absence of the $225 million pre-tax gain on the sale of Payflex recorded in the prior year.

•Operating expenses as a percentage of total revenues decreased to 15.1% in the nine months ended September 30, 2023 compared to 15.6% in the prior year. The decrease in operating expenses as a percentage of total revenues was driven by the increases in total revenues described above.

Adjusted operating income

•Adjusted operating income decreased $524 million, or 9.7%, in the nine months ended September 30, 2023 compared to the prior year, reflecting increased utilization in Medicare Advantage when compared with pandemic influenced utilization levels in the prior year, as well as incremental investments in the business, including investments in service capabilities and member experience. These decreases were partially offset by higher net investment income and membership growth in the nine months ended September 30, 2023.

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

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022
In thousands	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total	Insured	ASC	Total
Medical membership:
Commercial	4,198	14,075	18,273	4,033	14,114	18,147	3,136	13,896	17,032	3,159	13,852	17,011
Medicare Advantage	3,438	—	3,438	3,408	—	3,408	3,270	—	3,270	3,260	—	3,260
Medicare Supplement	1,352	—	1,352	1,351	—	1,351	1,363	—	1,363	1,345	—	1,345
Medicaid	2,173	452	2,625	2,261	467	2,728	2,234	497	2,731	2,181	490	2,671
Total medical membership	11,161	14,527	25,688	11,053	14,581	25,634	10,003	14,393	24,396	9,945	14,342	24,287
Supplemental membership information:
Medicare Prescription Drug Plan (standalone)			6,092			6,094			6,128			6,090

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Medical Membership

•Medical membership represents the number of members covered by the Health Care Benefits segment’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 the Health Care Benefits segment’s total revenues and operating results.

•Medical membership as of September 30, 2023 of 25.7 million increased 54 thousand members compared with June 30, 2023, reflecting increases in the Commercial and Medicare product lines. These increases were partially offset by a decline in the Medicaid product line, primarily attributable to the resumption of Medicaid redeterminations following the expiration of the public health emergency (“PHE”).

•Medical membership as of September 30, 2023 of 25.7 million increased 1.4 million members compared with September 30, 2022, reflecting increases in the Commercial and Medicare product lines, including an increase of approximately 1.2 million members related to the individual exchange business within the Commercial product line. These increases were partially offset by a decline in the Medicaid product line, primarily attributable to the resumption of Medicaid redeterminations following the expiration of the PHE.

Medicare Update

On March 31, 2023, CMS issued its final notice detailing final 2024 Medicare Advantage payment rates. Final 2024 Medicare Advantage rates resulted in an expected average decrease in revenue for the Medicare Advantage industry of 1.12%, excluding the CMS estimate of Medicare Advantage risk score trend.

The ACA ties a portion of each Medicare Advantage plan’s reimbursement to the plan’s “star ratings.” Plans must have a star rating of four or higher (out of five) to qualify for bonus payments. CMS released the Company’s 2024 star ratings in October 2023. The Company’s 2024 star ratings will be used to determine which of the Company’s Medicare Advantage plans have ratings of four stars or higher and qualify for bonus payments in 2025.

On October 13, 2023, CMS released its 2024 star ratings for Medicare Advantage and Medicare Part D prescription drug plans. Based on the newly released 2024 star ratings, which will impact total revenues in 2025, the percentage of Aetna Medicare Advantage members in 4+ star plans is expected to increase to 87% based on the Company’s membership as of September 2023, as compared to the unmitigated 21% in the prior year. The main driver of this increase was a half star improvement in the Aetna National PPO, which increased from 3.5 stars to 4.0 stars. As previously discussed, the decline in membership in 4+ star plans for payment year 2024 resulted in a mitigated 2024 headwind of approximately $800 million to $1.0 billion, which was primarily driven by the decrease of the Aetna National PPO plan from 4.5 stars to 3.5 stars. Based on the increase in membership in 4+ star plans for payment year 2025, the Company now expects to be eligible for bonus payments that will recover the majority of that revenue decrease in 2025. The Company expects to prudently reinvest a portion of this net improvement into its business.

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Health Services Segment

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

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2023 vs 2022				Nine Months Ended September 30, 2023 vs 2022
In millions, except percentages	2023			2022			2023			2022			$		%		$		%
Revenues:
Products	$	45,019		$	42,673		$	133,371		$	123,822		$	2,346	5.5	%	$	9,549	7.7	%
Services	1,872			581			4,326			1,985			1,291		222.2	%	2,341		117.9	%
Total revenues	46,891			43,254			137,697			125,807			3,637		8.4	%	11,890		9.5	%
Cost of products sold	43,738			41,068			129,425			119,275			2,670		6.5	%	10,150		8.5	%
Health care costs	612			—			995			—			612		100.0	%	995		100.0	%
Operating expenses	814			532			2,145			1,662			282		53.0	%	483		29.1	%
Operating expenses as a % of total revenues	1.7		%	1.2		%	1.6		%	1.3		%
Operating income	$	1,727		$	1,654		$	5,132		$	4,870		$	73	4.4	%	$	262	5.4	%
Operating income as a % of total revenues	3.7		%	3.8		%	3.7		%	3.9		%
Adjusted operating income (1)	$	1,878		$	1,695		$	5,452		$	4,996		$	183	10.8	%	$	456	9.1	%
Adjusted operating income as a % of total revenues	4.0		%	3.9		%	4.0		%	4.0		%
Revenues (by distribution channel):
Pharmacy network (2)	$	27,981		$	26,334		$	83,050		$	76,358		$	1,647	6.3	%	$	6,692	8.8	%
Mail & specialty (3)	17,004			16,318			50,378			47,269			686		4.2	%	3,109		6.6	%
Other	1,906			602			4,269			2,180			1,304		216.6	%	2,089		95.8	%
Pharmacy claims processed (4)	579.6			584.6			1,743.5			1,734.9			(5.0)		(0.9)	%	8.6		0.5	%
Generic dispensing rate (4)	87.5		%	87.5		%	88.1		%	87.8		%

_____________________________________________

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

(2)Pharmacy network revenues relate to claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies. Effective January 1, 2023, pharmacy network revenues also include activity associated with Maintenance Choice, which 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. Maintenance Choice activity was previously reflected in mail & specialty revenues. Prior period financial information has been revised to conform with current period presentation.

(3)Mail & specialty revenues relate to specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as mail order and specialty claims fulfilled by the Pharmacy & Consumer Wellness segment. Effective January 1, 2023, mail & specialty revenues exclude Maintenance Choice activity, which is now reported within pharmacy network revenues. Prior period financial information has been revised to conform with current period presentation.

(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 September 30, 2023 vs. 2022

Revenues

•Total revenues increased $3.6 billion, or 8.4%, to $46.9 billion in the three months ended September 30, 2023 compared to the prior year primarily driven by pharmacy drug mix, growth in specialty pharmacy, brand inflation and the acquisitions of Oak Street Health and Signify Health. These increases were partially offset by continued pharmacy client price improvements.

Operating expenses

•Operating expenses in the Health Services segment include selling, general and administrative expenses; and depreciation and amortization expense.

•Operating expenses increased $282 million, or 53.0%, to $814 million in the three months ended September 30, 2023 compared to the prior year primarily due to the acquisitions of Oak Street Health and Signify Health, including

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amortization associated with the acquired intangible assets. These increases were partially offset by gains from anti-trust legal settlements recorded in the three months ended September 30, 2023.

•Operating expenses as a percentage of total revenues increased to 1.7% in the three months ended September 30, 2023 compared to 1.2% in the prior year. The increase in operating expenses as a percentage of total revenues was primarily due to the increases in operating expenses described above.

Adjusted operating income

•Adjusted operating income increased $183 million, or 10.8%, in the three months ended September 30, 2023 compared to the prior year primarily driven by improved purchasing economics, including increased contributions from the products and services of the Company’s group purchasing organization, as well as growth in specialty pharmacy. These increases were partially offset by continued pharmacy client price improvements.

•As you review the Health 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

•Pharmacy claims processed represents the number of prescription claims processed through the Company’s pharmacy benefits manager and dispensed by either its retail network pharmacies or the Company’s 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 claims processed decreased slightly on a 30-day equivalent basis in the three months ended September 30, 2023 compared to the prior year, reflecting the impact of a Medicaid customer contract change that occurred during the second quarter of 2023 and a decrease in COVID-19 vaccinations. These decreases were partially offset by net new business.

Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Health Services segment’s generic drug claims processed by its total claims processed. 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 Health Services segment’s generic dispensing rate remained consistent at 87.5% in each of the three-month periods ended September 30, 2023 and 2022. Excluding the impact of COVID-19 vaccinations, the segment’s generic dispensing rate was 87.7% and 88.1% in the three months ended September 30, 2023 and 2022, respectively.

Commentary - Nine Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues increased $11.9 billion, or 9.5%, to $137.7 billion in the nine months ended September 30, 2023 compared to the prior year primarily driven by pharmacy drug mix, growth in specialty pharmacy, brand inflation and the acquisitions of Oak Street Health and Signify Health. These increases were partially offset by continued pharmacy client price improvements.

Operating expenses

•Operating expenses increased $483 million, or 29.1%, to $2.1 billion in the nine months ended September 30, 2023 compared to the prior year primarily due to the acquisitions of Oak Street Health and Signify Health, including amortization associated with the acquired intangible assets.

•Operating expenses as a percentage of total revenues increased to 1.6% in the nine months ended September 30, 2023 compared to 1.3% in the prior year. The increase in operating expenses as a percentage of total revenues was primarily due to the increases in operating expenses described above.

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Adjusted operating income

•Adjusted operating income increased $456 million, or 9.1%, in the nine months ended September 30, 2023 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, as well as growth in specialty pharmacy. These increases were partially offset by continued pharmacy client price improvements and decreased COVID-19 diagnostic testing in the segment’s MinuteClinic walk-in medical clinics compared to the prior year.

Pharmacy claims processed

•The Company’s pharmacy claims processed increased slightly on a 30-day equivalent basis in the nine months ended September 30, 2023 compared to the prior year primarily driven by net new business and increased utilization. These increases were partially offset by the impact of a Medicaid customer contract change that occurred during the second quarter of 2023 and a decrease in COVID-19 vaccinations.

Generic dispensing rate

•The Health Services segment’s generic dispensing rate increased to 88.1% in the nine months ended September 30, 2023 compared to 87.8% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in COVID-19 vaccinations, partially offset by an increase in glucagon-like peptide 1 (“GLP-1”) pharmacy claims in the nine months ended September 30, 2023 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s generic dispensing rate was 88.2% and 88.6% in the nine months ended September 30, 2023 and 2022, respectively.

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Pharmacy & Consumer Wellness Segment

The following table summarizes the Pharmacy & Consumer Wellness segment’s performance for the respective periods:

													Change
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30, 2023 vs 2022				Nine Months Ended September 30, 2023 vs 2022
In millions, except percentages	2023			2022			2023			2022			$		%		$		%
Revenues:
Products	$	28,043		$	26,378		$	83,442		$	77,152		$	1,665	6.3	%	$	6,290	8.2	%
Services	831			869			2,140			2,773			(38)		(4.4)	%	(633)		(22.8)	%
Net investment income (loss)	(2)			(10)			(4)			(44)			8		80.0	%	40		90.9	%
Total revenues	28,872			27,237			85,578			79,881			1,635		6.0	%	5,697		7.1	%
Cost of products sold	22,797			20,849			67,301			60,412			1,948		9.3	%	6,889		11.4	%
Loss on assets held for sale	—			2,480			349			2,480			(2,480)		(100.0)	%	(2,131)		(85.9)	%
Operating expenses	4,753			5,120			14,540			15,196			(367)		(7.2)	%	(656)		(4.3)	%
Operating expenses as a % of total revenues	16.5		%	18.8		%	17.0		%	19.0		%
Operating income (loss)	$	1,322		$	(1,212)		$	3,388		$	1,793		$	2,534	209.1	%	$	1,595	89.0	%
Operating income (loss) as a % of total revenues	4.6		%	(4.4)		%	4.0		%	2.2		%
Adjusted operating income (1)	$	1,389		$	1,401		$	3,936		$	4,684		$	(12)	(0.9)	%	$	(748)	(16.0)	%
Adjusted operating income as a % of total revenues	4.8		%	5.1		%	4.6		%	5.9		%
Revenues (by major goods/service lines):
Pharmacy	$	22,977		$	21,084		$	67,371		$	61,496		$	1,893	9.0	%	$	5,875	9.6	%
Front Store	5,371			5,581			16,597			16,630			(210)		(3.8)	%	(33)		(0.2)	%
Other	526			582			1,614			1,799			(56)		(9.6)	%	(185)		(10.3)	%
Net investment income (loss)	(2)			(10)			(4)			(44)			8		80.0	%	40		90.9	%
Prescriptions filled (2)	407.1			405.6			1,217.6			1,202.0			1.5		0.4	%	15.6		1.3	%
Same store sales increase (decrease): (3)
Total	8.8		%	10.0		%	10.4		%	9.6		%
Pharmacy	11.9		%	11.3		%	13.0		%	9.7		%
Front Store	(2.2)		%	5.5		%	1.6		%	9.6		%
Prescription volume (2)	2.7		%	3.8		%	3.7		%	4.3		%
Generic dispensing rate (2)	88.3		%	88.0		%	89.1		%	88.0		%

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(1)See “Segment Analysis” above in this report for a reconciliation of Pharmacy & Consumer Wellness segment operating income (loss) (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 and prescriptions from LTC and infusion services operations. Effective January 1, 2023, same store sales also include digital sales initiated online or through mobile applications and fulfilled through the Company’s distribution centers. Prior period financial information has been revised to conform with current period presentation. 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 September 30, 2023 vs. 2022

Revenues

•Total revenues increased $1.6 billion, or 6.0%, to $28.9 billion in the three months ended September 30, 2023 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume and brand inflation. These increases

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were partially offset by continued pharmacy reimbursement pressure, the impact of recent generic introductions, a decrease in store count and decreased sales of COVID-19 OTC test kits.

•Pharmacy same store sales increased 11.9% in the three months ended September 30, 2023 compared to the prior year. The increase was primarily driven by pharmacy drug mix, the 2.7% increase in pharmacy same store prescription volume on a 30-day equivalent basis and brand inflation. These increases were partially offset by continued pharmacy reimbursement pressure and the impact of recent generic introductions.

•Front store same store sales decreased 2.2% in the three months ended September 30, 2023 compared to the prior year. The decrease was primarily due to decreased contributions from COVID-19 OTC test kits.

•Other revenues decreased 9.6% in the three months ended September 30, 2023 compared to the prior year. The decrease was primarily due to decreased COVID-19 diagnostic testing in the three months ended September 30, 2023 compared to the prior year.

Loss on assets held for sale

•During the three months ended September 30, 2022, the Company recorded a $2.5 billion loss on assets held for sale related to the write-down of its LTC business. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ to the unaudited condensed consolidated financial statements for additional information.

Operating expenses

•Operating expenses in the Pharmacy & Consumer Wellness segment include payroll, employee benefits and occupancy costs associated with the segment’s stores and pharmacy fulfillment operations; selling expenses; advertising expenses; depreciation and amortization expense and certain administrative expenses.

•Operating expenses decreased $367 million, or 7.2%, in the three months ended September 30, 2023 compared to the prior year. The decrease was primarily due to $151 million in gains from anti-trust legal settlements recorded in the three months ended September 30, 2023, the decrease in store count, a decrease in amortization of intangible assets, lower expenses associated with COVID-19 vaccination administration compared to the prior year and the net favorable impact of store investments.

•Operating expenses as a percentage of total revenues decreased to 16.5% in the three months ended September 30, 2023 compared to 18.8% in the prior year. The decrease in operating expenses as a percentage of total revenues was driven by the increases in total revenues and decreases in operating expenses described above.

Adjusted operating income

•Adjusted operating income remained relatively consistent at $1.4 billion in each of the three-month periods ended September 30, 2023 and 2022, primarily due to continued pharmacy reimbursement pressure and decreased contributions from COVID-19 vaccinations, diagnostic testing and OTC test kits, largely offset by improved drug purchasing, the increased prescription volume described above and lower operating expenses driven by legal settlements recorded in the three months ended September 30, 2023.

•As you review the Pharmacy & Consumer Wellness 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 Pharmacy & Consumer Wellness segment. If the pharmacy reimbursement pressure accelerates, the segment may not be able to 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 Pharmacy & Consumer Wellness segment’s retail and long-term care pharmacies and infusion services operations. 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 slightly on a 30-day equivalent basis in the three months ended September 30, 2023 compared to the prior year primarily driven by increased utilization, largely offset by a decrease in COVID-19 vaccinations and the decrease in store count. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 1.1% on a 30-day equivalent basis for the three months ended September 30, 2023 compared to the prior year.

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Generic dispensing rate

•Generic dispensing rate is calculated by dividing the Pharmacy & Consumer Wellness 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 Pharmacy & Consumer Wellness segment’s generic dispensing rate increased to 88.3% in the three months ended September 30, 2023 compared to 88.0% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in COVID-19 vaccinations, partially offset by an increase in GLP-1 pharmacy claims in the three months ended September 30, 2023 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 88.7% and 88.9% in the three months ended September 30, 2023 and 2022, respectively.

Commentary - Nine Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues increased $5.7 billion, or 7.1%, to $85.6 billion in the nine months ended September 30, 2023 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume and brand inflation. These increases were partially offset by the impact of recent generic introductions, continued pharmacy reimbursement pressure, decreased COVID-19 vaccinations, diagnostic testing and OTC test kit sales, as well as the decrease in store count.

•Pharmacy same store sales increased 13.0% in the nine months ended September 30, 2023 compared to the prior year. The increase was primarily driven by pharmacy drug mix, the 3.7% increase in pharmacy same store prescription volume on a 30-day equivalent basis and brand inflation. These increases were partially offset by the impact of recent generic introductions and continued pharmacy reimbursement pressure.

•Front store same store sales increased 1.6% in the nine months ended September 30, 2023 compared to the prior year. The increase was primarily due to increased beauty and personal care product sales, largely offset by decreased contributions from COVID-19 OTC test kits in the nine months ended September 30, 2023 compared to the prior year.

•Other revenues decreased 10.3% in the nine months ended September 30, 2023 compared to the prior year. The decrease was primarily due to decreased COVID-19 diagnostic testing in the nine months ended September 30, 2023 compared to the prior year.

Loss on assets held for sale

•During the nine months ended September 30, 2023, the Company recorded a $349 million loss on assets held for sale compared to a $2.5 billion loss on assets held for sale recorded in the prior year, both related to the write-down of its LTC business.

Operating expenses

•Operating expenses decreased $656 million, or 4.3%, in the nine months ended September 30, 2023 compared to the prior year. The decrease was primarily due to lower expenses associated with COVID-19 vaccination administration, the decrease in store count, the gains from anti-trust legal settlements described above and a decrease in amortization of intangible assets.

•Operating expenses as a percentage of total revenues decreased to 17.0% in the nine months ended September 30, 2023 compared to 19.0% in the prior year. The decrease in operating expenses as a percentage of total revenues was driven by the increases in total revenues and decreases in operating expenses described above.

Adjusted operating income

•Adjusted operating income decreased $748 million, or 16.0%, in the nine months ended September 30, 2023 compared to the prior year. The decrease in adjusted operating income was primarily driven by continued pharmacy reimbursement pressure and decreased COVID-19 vaccinations and diagnostic testing. These decreases were partially offset by the increased prescription volume described above, improved drug purchasing and lower operating expenses driven by legal settlements recorded in the nine months ended September 30, 2023.

Prescriptions filled

•Prescriptions filled increased 1.3% on a 30-day equivalent basis in the nine months ended September 30, 2023 compared to the prior year primarily driven by increased utilization, partially offset by a decrease in COVID-19 vaccinations and the decrease in store count. Excluding the impact of COVID-19 vaccinations, prescriptions filled increased 2.6% on a 30-day equivalent basis for the nine months ended September 30, 2023 compared to the prior year.

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Generic dispensing rate

•The Pharmacy & Consumer Wellness segment’s generic dispensing rate increased to 89.1% in the nine months ended September 30, 2023 compared to 88.0% in the prior year. The increase in the segment’s generic dispensing rate was primarily driven by a decrease in COVID-19 vaccinations, partially offset by an increase in GLP-1 pharmacy claims in the nine months ended September 30, 2023 compared to the prior year. Excluding the impact of COVID-19 vaccinations, the segment’s total generic dispensing rate was 89.4% and 89.5% in the nine months ended September 30, 2023 and 2022, respectively.

Corporate/Other Segment

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

									Change
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30, 2023 vs 2022				Nine Months Ended September 30, 2023 vs 2022
In millions, except percentages	2023		2022		2023		2022		$		%		$		%
Revenues:
Premiums	$	12	$	14	$	38	$	46	$	(2)	(14.3)	%	$	(8)	(17.4)	%
Services	1		18		5		51		(17)		(94.4)	%	(46)		(90.2)	%
Net investment income	92		110		333		281		(18)		(16.4)	%	52		18.5	%
Total revenues	105		142		376		378		(37)		(26.1)	%	(2)		(0.5)	%
Cost of products sold	—		11		1		31		(11)		(100.0)	%	(30)		(96.8)	%
Health care costs	61		55		163		204		6		10.9	%	(41)		(20.1)	%
Restructuring charges	11		—		507		—		11		100.0	%	507		100.0	%
Opioid litigation charges	—		5,220		—		5,704		(5,220)		(100.0)	%	(5,704)		(100.0)	%
Operating expenses	507		477		1,538		1,319		30		6.3	%	219		16.6	%
Operating loss	(474)		(5,621)		(1,833)		(6,880)		5,147		91.6	%	5,047		73.4	%
Adjusted operating loss (1)	(347)		(388)		(982)		(1,147)		41		10.6	%	165		14.4	%

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(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 September 30, 2023 vs. 2022

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 $37 million, or 26.1%, to $105 million in the three months ended September 30, 2023 compared to the prior year primarily driven by a decrease in net investment income, driven by lower average invested assets compared to the prior year, as well as a decrease in services revenue.

Restructuring charge

•During the three months ended September 30, 2023, the Company recorded an $11 million restructuring charge. See Note 3 ‘‘Restructuring Program’’ to the unaudited condensed consolidated financial statements for additional information.

Opioid litigation charges

•During the three months ended September 30, 2022, the Company recorded a $5.2 billion opioid litigation charge. See Note 12 ‘‘Commitments and Contingencies’’ to the unaudited condensed consolidated financial statements for additional information.

Adjusted operating loss

•Adjusted operating loss decreased $41 million, or 10.6%, in the three months ended September 30, 2023 compared to the prior year primarily driven by decreased operating expenses associated with the termination of certain transformation initiatives.

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Commentary - Nine Months Ended September 30, 2023 vs. 2022

Revenues

•Total revenues remained relatively consistent in the nine months ended September 30, 2023 compared to the prior year as decreases in services revenue and premiums were largely offset by increased net investment income, which increased due to favorable average investment yields compared to the prior year.

Restructuring charges

•During the nine months ended September 30, 2023, the Company recorded $507 million of restructuring charges.

Opioid litigation charges

•During the nine months ended September 30, 2022, the Company recorded $5.7 billion of opioid litigation charges.

Adjusted operating loss

•Adjusted operating loss decreased $165 million, or 14.4%, in the nine months ended September 30, 2023 compared to the prior year primarily driven by decreased operating expenses associated with the termination of certain transformation initiatives.

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 September 30, 2023, the Company had approximately $13.0 billion in cash and cash equivalents, approximately $2.7 billion of which was held by the parent company or nonrestricted subsidiaries.

The net change in cash, cash equivalents and restricted cash during the nine months ended September 30, 2023 and 2022 was as follows:

	Nine Months Ended September 30,				Change
In millions, except percentages	2023		2022		$		%
Net cash provided by operating activities	$	16,062	$	18,129	$	(2,067)	(11.4)	%
Net cash used in investing activities	(19,647)		(4,928)		(14,719)		(298.7)	%
Net cash provided by (used in) financing activities	3,655		(8,329)		11,984		143.9	%
Net increase in cash, cash equivalents and restricted cash	$	70	$	4,872	$	(4,802)	(98.6)	%

Commentary

•Net cash provided by operating activities decreased by $2.1 billion in the nine months ended September 30, 2023 compared to the prior year. The decrease was primarily due to the timing of payments and receipts, partially offset by lower inventory purchases. Both the nine months ended September 30, 2023 and 2022 reflect the early receipt of the CMS payments for October 2023 and 2022, respectively.

•Net cash used in investing activities increased by $14.7 billion in the nine months ended September 30, 2023 compared to the prior year primarily due to the acquisitions of Oak Street Health in May 2023 and Signify Health in March 2023.

•Net cash provided by financing activities was $3.7 billion in the nine months ended September 30, 2023 compared to net cash used in financing activities of $8.3 billion in the prior year. The change in cash provided by financing activities primarily related to proceeds from the issuance of approximately $10.9 billion of long-term senior notes in the nine months ended September 30, 2023 and reflects lower repayments of long-term debt during the nine months ended September 30, 2023 compared to the prior year.

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Short-term Borrowings

Commercial Paper and Back-up Credit Facilities

The Company did not have any commercial paper outstanding as of September 30, 2023. In connection with its commercial paper program, the Company maintains a $2.5 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2025, a $2.5 billion, five-year unsecured back-up revolving credit facility, which expires on May 11, 2026, and a $2.5 billion, five-year unsecured back-up revolving credit facility, which expires on May 16, 2027. 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 September 30, 2023, there were no borrowings outstanding under any of the Company’s back-up credit facilities.

Term Loan Agreement

On May 1, 2023, the Company entered into a 364-day $5.0 billion term loan agreement. The term loan agreement allows for borrowings at various rates that are dependent, in part, on the Company’s debt ratings. On May 2, 2023, the Company borrowed $5.0 billion at an interest rate of approximately 6.2% under the term loan agreement to fund a portion of the Oak Street Health acquisition purchase price. On June 2, 2023, the Company repaid the outstanding balance under the term loan agreement.

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 September 30, 2023 was approximately $950 million. As of September 30, 2023, there were no outstanding advances from the FHLBB.

Long-term Borrowings

2023 Notes

On June 2, 2023, the Company issued $1.0 billion aggregate principal amount of 5.0% senior notes due January 2029, $750 million aggregate principal amount of 5.25% senior notes due January 2031, $1.25 billion aggregate principal amount of 5.3% senior notes due June 2033, $1.25 billion aggregate principal amount of 5.875% senior notes due June 2053 and $750 million aggregate principal amount of 6.0% senior notes due June 2063 for total proceeds of approximately $4.9 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used, along with cash on hand, to repay the outstanding balance under the term loan agreement described above.

On February 21, 2023, the Company issued $1.5 billion aggregate principal amount of 5.0% senior notes due February 2026, $1.5 billion aggregate principal amount of 5.125% senior notes due February 2030, $1.75 billion aggregate principal amount of 5.25% senior notes due February 2033 and $1.25 billion aggregate principal amount of 5.625% senior notes due February 2053 for total proceeds of approximately $6.0 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used to fund general corporate purposes, including a portion of the Signify Health acquisition purchase price.

Oak Street Health Convertible Notes

Prior to the Oak Street Health acquisition, Oak Street Health held 0% convertible senior notes with an aggregate principal amount of $920 million (the “Convertible Notes”), which were assumed by the Company in connection with the Oak Street Health Acquisition. The Oak Street Health Acquisition constituted a fundamental change in the Convertible Notes giving the holders the right to require the Company to repurchase the Convertible Notes. The repurchase price was an amount in cash equal to 100% of the principal amount of the Convertible Notes. On May 31, 2023, the Company issued a notice of repurchase to the holders of the Convertible Notes. In connection with this notice, $917 million of the Convertible Notes were submitted for repurchase and settled on July 21, 2023, with $3 million remaining outstanding.

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 September 30, 2023, the Company was in compliance with all of its debt covenants.

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Debt Ratings 

As of September 30, 2023, 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 both Moody’s and 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 September 30, 2023
November 17, 2022 (“2022 Repurchase Program”)	$	10.0	$	10.0
December 9, 2021 (“2021 Repurchase Program”)	10.0		4.5

Each of the share Repurchase Programs was effective immediately and permit 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. Both the 2022 and 2021 Repurchase Programs can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2023 and 2022, the Company repurchased an aggregate of 22.8 million shares of common stock for approximately $2.0 billion and an aggregate of 19.1 million shares of common stock for approximately $2.0 billion, respectively, both pursuant to the 2021 Repurchase Program. This activity includes the share repurchases under the ASR transactions described below.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $2.0 billion fixed dollar ASR with Citibank, N.A.. Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $2.0 billion notional amount of the ASR or approximately 17.4 million shares at a price of $92.19 per share, which were placed into treasury stock in January 2023. The ASR was accounted for as an initial treasury stock transaction for $1.6 billion and a forward contract for $0.4 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2023, the Company received approximately 5.4 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $2.0 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury and the forward contract was reclassified from capital surplus to treasury stock in February 2023.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC. 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 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

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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 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.

Recoverability of Goodwill

Effective for the 2023 annual goodwill impairment test, the Company elected to change its annual goodwill impairment test date from August 31st to October 31st to better align with its annual budgeting processes, as this previous election predates large acquisitions such as Caremark Rx, Inc. and Aetna Inc.

The Company’s most recent goodwill impairment test was performed as of January 1, 2023, in connection with the segment realignment described in Note 1 “Significant Accounting Policies.” The results of that impairment test indicated that there was no impairment of goodwill as of the testing date, with the fair values of all reporting units with goodwill exceeding their respective carrying values by significant margins.

For a full description of the Company’s other critical accounting policies, see “Critical Accounting Policies” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 to the May 2023 8-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 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 impact of COVID-19 and any new variants or viruses 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, Health Services segment business, sales results and/or trends and/or operations, Pharmacy & Consumer Wellness 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, statements related to possible, proposed or pending acquisitions, joint ventures, investments or combinations that involve, among other things, the timing or likelihood of receipt of regulatory approvals, the timing of completion, integration synergies, net synergies and integration risks and other costs, including those related to CVS Health’s acquisitions of Signify Health and Oak Street Health, 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.

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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 additional 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, 2022 and under “Risk Factors” included in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023; these are not the only risks and uncertainties we face. There can be no assurance that the Company has identified all the risks that may 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.

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, 2022. See the information contained in Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on May 25, 2023, 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 September 30, 2023, 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 September 30, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II.Other Information

Item 1.Legal Proceedings

The information contained in Note 12 ‘‘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, 2022 (the “2022 10-K”) and the “Risk Factors” disclosed in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (the “Q1 2023 10-Q”). The risk factors set forth in the 2022 10-K and the Q1 2023 10-Q could adversely affect the Company’s businesses, operating results, cash flows and/or financial condition as well as the market price of CVS Health Corporation’s common stock.

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 September 30, 2023, 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 programs authorized by CVS Health Corporation’s Board of Directors on November 17, 2022 and December 9, 2021. See Note 9 ‘‘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
July 1, 2023 through July 31, 2023	—	$	—	—	$	14,500,000,143
August 1, 2023 through August 31, 2023	—	$	—	—	$	14,500,000,143
September 1, 2023 through September 30, 2023	—	$	—	—	$	14,500,000,143
	—			—

Item 3.        Defaults Upon Senior Securities

None.

Item 4.        Mine Safety Disclosures

Not Applicable.

Item 5.        Other Information

Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of CVS Health Corporation securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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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 U.S. 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*	The Registrant's Amended and Restated Severance Plan for Non-Store Employees dated September 30, 2023.
15	Letter re: unaudited interim financial information
15.1	Letter from Ernst & Young LLP acknowledging awareness of the use of a report dated November 1, 2023 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 and nine months ended September 30, 2023 formatted in Inline XBRL: (i) the Condensed Consolidated Statements of Operations, (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (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 September 30, 2023, 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:	November 1, 2023	By:	/s/ Thomas F. Cowhey
			Thomas F. Cowhey
			Senior Vice President, Interim Chief Financial Officer

EX-10.1

Exhibit 10.1

CVS HEALTH SEVERANCE PLAN FOR

NON-STORE EMPLOYEES

(Amended and Restated as of September 30, 2023)

CVS HEALTH SEVERANCE PLAN

FOR NON-STORE EMPLOYEES

(Amended and Restated as of September 30, 2023)

WHEREAS, CVS Health Corporation (the “Company”) has established the CVS Health Severance Plan for Non-Store Employees (the “Plan”) to provide financial assistance to employees in non-store positions who are involuntarily terminated and are eligible within the terms and conditions of the Plan;

WHEREAS, it is intended that the Plan constitute an employee welfare benefit plan within the scope of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that the Plan constitute a separation pay plan within the scope of Department of Labor (“DOL”) Regulation Section 2510.3- 2(b), and that all payments made under the Plan be deductible by the Company under Section 162(a) of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, the benefits provided under the Plan are intended to constitute separation pay within the meaning of Treasury Regulation Section 1.409A-1(b)(9)(iii);

WHEREAS, this document is the official plan document; and

WHEREAS, the Company wishes to make certain amendments to the Plan that was effective as of January 1, 2023, which amendments shall be effective as of September 30, 2023 (the “Effective Date”);

NOW, THEREFORE, as of the Effective Date, the Company does hereby amend and restate the Plan to provide as follows:

ARTICLE 1

DEFINITIONS

        For purposes of the Plan, the following terms, when used with an initial capital letter, shall have the meaning set forth below unless a different meaning is plainly required by the context.

1.1 “Affiliate” shall mean (a) any corporation which is required to be aggregated with the Company under Code Section 414(b), (c), (m), or (o) and (b) any other entity in which the Company has an ownership interest and which the Company designates as an Affiliate for purposes of the Plan.

1.2 “Cause” shall refer to a termination of an Eligible Employee’s employment because of the Eligible Employee’s (a) failure to satisfactorily perform under a performance improvement plan of the Employer; (b) acts of unethical business activity, including but not limited to fraud, misappropriation, embezzlement, dishonesty, harassment, discrimination in violation of Employer policies, or willful or negligent destruction of property of an Employer or an Affiliate; (c) misconduct that could cause damage (monetary, reputational or otherwise) to the Employer, an Affiliate, or any personnel thereof; (d) conviction of or a plea of guilty or nolo contendere to any felony, whether or not any right to appeal has been or may be exercised; (e) negligence of duty; (f)insubordination; or (g) a violation of the Employer’s policy, procedure, or practice.

1.3 “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.4 “Eligible Employee” shall mean an individual who is employed by the Employer on a regular basis in a non-store position and has been employed by the Employer in any position for a minimum of ninety (90) days prior to the individual’s separation of employment. For purposes of the Plan, distribution warehouse employees, field managers

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and employees employed by CVS ProCare, Inc. working at Company headquarters, shall be treated as working in a non-store location and therefore not subject to exclusion from eligibility. For purposes of the Plan, individuals in the following categories will not be considered Eligible Employees:

(a)individuals who are covered by a collective bargaining agreement, provided welfare benefits were the subject of bargaining, unless the terms of the collective bargaining agreement provide for participation in the Plan;

(b)individuals who are seasonal employees, leased employees, independent contractors, temporary employees, or consultants;

(c)individuals who work for the Employer or an Affiliate in a store location of the Company or an Affiliate, or whose compensation is paid through or according to a store payroll, including but not limited to: pharmacists, store managers, assistant store managers, crew, and pharmacy staff;

(d)individuals employed by MinuteClinic, L.L.C. or by any practitioner-owned entity managed by MinuteClinic, L.L.C.;

(e)the President and CEO of CVS Health Corporation;

(f)individuals employed in Puerto Rico; and

(g)individuals employed outside the United States of America.

The decision of whether an individual falls into one of these categories and whether an individual is employed by an Employer on a regular basis in a non-store position for a minimum of ninety (90) days shall be made by the Employer in its sole discretion. Any individual who is excluded from being considered an Eligible Employee under the Plan shall be excluded from the Plan regardless of the individual’s reclassification by a government agency, including a reclassification by the Internal Revenue Service for tax withholding purposes.

1.5“Employer” shall mean CVS Pharmacy, Inc., Caremark Rx, L.L.C. and Aetna Inc. and any current or future Affiliate thereof that does not maintain its own severance plan for employees of that Affiliate.

1.6“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

1.7“Exempt Employee” shall mean an Eligible Employee who is paid on a salaried basis for payroll purposes and classified in the sole discretion of the Employer under its normal classification procedures as an exempt employee under the Fair Labor Standards Act.

1.8“Involuntary Termination” shall mean an Eligible Employee’s termination of employment with the Employer due to the unilateral action of the Employer, including but not limited to a termination as a result of the elimination of an Eligible Employee’s position due to a reorganization or changes in responsibilities, a reduction in force, or a closing of the business unit in which the Eligible Employee works; provided, however, that such Involuntary Termination constitutes a separation from service under Treasury Regulation Section 1.409A-1(h). Notwithstanding the foregoing, an Eligible Employee will not have an Involuntary Termination if the Eligible Employee: (a) is terminated for Cause, as determined by the Employer in its sole discretion; (b) voluntarily terminates his or her employment at any time or resigns prior to an Involuntary Termination; (c) takes a leave of absence; (d) is administratively terminated for failure to return from a leave of absence upon expiration of his or her leave; (e) terminates employment due to his or her death or disability; (f) transfers to an Affiliate; (g) transfers to a new employer in connection with the sale of an Employer facility; or (h) fails to accept an offer for a job with the Employer that is comparable to the job that he or she is performing for the Employer at the time of the offer. For purposes of Subsection (h) of this Section 1.8,

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whether a job is considered “comparable” shall be determined in the sole discretion of the Employer, taking into account whether the new job is located 50 or fewer miles from the Eligible Employee’s job at the time of the offer, whether the compensation offered is materially less than the Eligible Employee’s compensation at the time of the offer, and whether the new job will result in a substantial change of duties from the Eligible Employee’s job at the time of the offer. The determination of whether an Eligible Employee’s termination of employment is an Involuntary Termination shall be made in the sole discretion of the Employer. If an Employer deems an Eligible Employee’s termination of employment to be an Involuntary Termination and, Employer later learns of facts and circumstances that, had the Employer known such facts and circumstances at the time of termination, would have resulted in a termination of employment for Cause, the Eligible Employee’s termination shall be deemed as of the date of termination to not have been an Involuntary Termination.

1.9“Non-exempt Employee” shall mean an Eligible Employee who is paid on an hourly basis for time worked and classified in the sole discretion of the Employer under its normal classification procedures as a non-exempt employee under the Fair Labor Standards Act.

1.10“Plan Administrator” shall mean the Senior Vice President of Human Resources of CVS Pharmacy, Inc., or such other person, designated by the Chief People Officer of the Company to act as the Plan Administrator.

1.11“Rehire Date” shall mean the date an Eligible Employee accepts reemployment with any Employer.

1.12“Severance Pay” shall mean the pay an Eligible Employee is eligible to receive under Subsection (b) of Section 2.1 of the Plan upon his or her Involuntary Termination.

1.13“Severance Period” shall mean the period of time during which an Eligible Employee is eligible to receive Severance Pay.

1.14“Weekly Rate” shall mean, (a) with respect to an Eligible Employee paid on a salaried basis, an Eligible Employee’s annual base salary (as determined by the Employer), as of the date of the Eligible Employee’s Involuntary Termination, expressed on a weekly basis (as determined in the sole discretion of the Employer), and (b) with respect to an Eligible Employee paid on an hourly basis, the hourly wage rate of the Eligible Employee as of the date of the Eligible Employee’s Involuntary Termination multiplied by the Eligible Employee’s regularly scheduled number of hours of service per week (as determined by the Employer), not in excess of 40 hours. Weekly Rate shall exclude any overtime, incentive, and bonus payments, unless otherwise required by law.

1.15“Year of Service” shall mean each full year of service performed by the Eligible Employee for an Employer as reflected in the records of the Employer and as determined as of the Eligible Employee’s date of termination of employment, based on the Employer’s policies and procedures for determining periods of service, and the applicable law.

ARTICLE 2

SEVERANCE PAY AND ELIGIBLE EMPLOYEE BENEFITS

2.1 (a)    Eligibility. Upon his or her Involuntary Termination, an Eligible Employee may, in the discretion of the Plan Administrator, be granted Severance Pay and benefits provided under Subsections (b), (c), and (d) of this Section 2.1, provided the conditions of Section 2.2 are satisfied. The determination of whether Severance Pay is payable under the Plan, and the form and amount of such pay, shall be made in the sole discretion of the Plan Administrator.

(b)Severance Pay. The Severance Pay payable to an Eligible Employee in the event of Involuntary Termination shall be determined by the Plan Administrator in its, his or her sole discretion, using the guidelines set forth in the applicable Appendix for the Eligible Employee’s grade and status, as determined by the Employer. Notwithstanding such referenced guidelines, the Plan Administrator may increase or decrease (including, to zero) the

4

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amount of Severance Pay with respect to any Eligible Employee for reasons it, he or she deems appropriate in its sole discretion at any time, whether before or after payments of Severance Pay have commenced (including, but not limited to, an increase to account for statutory requirements or a decrease to take into account any debts owed to an Employer or a decrease if an Eligible Employee fails to satisfactorily perform his or her duties and is not on or has not completed a performance improvement plan at the time of termination of employment), at any time, whether before or after payments of Severance Pay have commenced.

(c)COBRA Assistance. In the event an Eligible Employee who has an Involuntary Termination (i) is eligible to elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”) in accordance with the terms of the medical and prescription drug plan and/or dental plan of the Employer and (ii) properly and timely elects such continuation coverage, the Employer may pay for a portion of the cost of COBRA coverage equivalent to the contribution which the Employer makes on behalf of similarly situated active employees under such plan for the appropriate tier of coverage selected and in place immediately prior to the date of the Eligible Employee’s Involuntary Termination (e.g., employee-only, family coverage), for a period determined in the sole discretion of the Plan Administrator, which generally shall be the Severance Period but in any event no longer than eighteen (18) months from the date of the Involuntary Termination (for purposes of this provision, if the Eligible Employee receives Severance Pay subject to subsection (h) below, the Severance Period shall be deemed to be the period for which Severance Pay would have been paid under the Plan but for the application of such subsection). Any COBRA assistance provided under this Subsection (c) shall be paid by the Employer directly to the insurance carrier, if applicable. The portion of the COBRA premium not covered by the COBRA assistance specified in this Subsection (c) must be paid by the Eligible Employee directly to the insurance carrier or service provider that administers COBRA, as applicable, based on the standard rules under the respective plan for payment of COBRA premiums. This Subsection (c) does not provide COBRA assistance in the event the Eligible Employee fails to properly and timely elect COBRA continuation coverage, regardless of whether his or her covered dependents elect COBRA continuation coverage.

(d)    Outplacement Services. Upon an Involuntary Termination, the outplacement services provided to an Eligible Employee shall be provided in the sole discretion of the Plan Administrator based on the guidelines contained in this Subsection (d).

(i)    If an Eligible Employee so desires, he or she may be eligible for outplacement services for assistance in obtaining new employment, provided through a vendor selected by the Employer, with the Employer directly providing payment to such vendor. The provision of outplacement services is contingent upon the Eligible Employee’s cooperation with the outplacement service vendor, upon the active efforts of the Eligible Employee to locate a new position, and upon the Eligible Employee initiating outplacement services during the Severance Period.

(ii)    Subject to the requirements of Paragraph (i) of this Subsection (d), outplacement services shall be offered for a period of time determined in the sole discretion of the Plan Administrator, based on the guidelines set forth in Appendix A for the applicable Eligible Employee’s grade, as determined by the Employer, provided that in no event shall such services extend beyond twelve (12) months following the Involuntary Termination of the Eligible Employee.

(e)Form and Timing of Payment. In the event an Eligible Employee is awarded Severance Pay under the terms of Subsection (a) of this Section 2.1, such Severance Pay shall be paid following an Eligible Employee’s Involuntary Termination (except as provided in Section 2.3, below), as follows: No Severance Pay shall commence (with respect to salary continuation payments) or be paid (with respect to a lump sum) (i) prior to the expiration of the later of a period that is identified in a severance agreement with the Eligible Employee during which he or she may consider the execution of the release of claims form (the “Consideration Period”) or a period ending at least seven (7) days following the execution of the release of claims form (the “Revocation Period”), or (ii) later than sixty (60) days following the date of Eligible Employee’s Involuntary Termination. Severance Pay that is paid in the form of salary continuation shall commence as soon as feasible following expiration of the later of the Consideration Period or the Revocation Period,

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which generally shall be the first regularly scheduled payroll date following the expiration of the Consideration Period or the Revocation Period, as the case may be, and shall thereafter be paid in substantially equal installments in accordance with the Employer’s regular payroll practice, except as provided in Section 2.3 of the Plan, except that the first installment paid after the expiration of the later of the Consideration Period or the Revocation Period shall include, on a retroactive basis, all installments that would have been paid had they started as soon as administratively feasible after the date of the Eligible Employee’s Involuntary Termination. It is the intent of the Plan that the Severance Period in all cases be measured from the date of the Eligible Employee’s Involuntary Termination. Further, in the Plan Administrator’s sole discretion, Severance Pay may be paid to any Eligible Employees in a single lump sum, in which event Severance Pay shall be paid within the period that satisfies the 409A requirements for short-term deferrals under Section 409A of the Code.

(f)Withholding. Any payment of Severance Pay to an Eligible Employee shall be subject to normal withholding for state and federal income taxes and Social Security taxes.

(g)Death. Upon the death of the Eligible Employee who had an Involuntary Termination and who has not received all Severance Pay payable under the Plan, the Severance Pay otherwise payable under Section 2.1(b) of the Plan shall be paid in the form of a lump sum to the Eligible Employee’s surviving legal spouse or, if there is no surviving legal spouse, to the Eligible Employee’s estate as soon as practicable, but in no event later than 60 days following death. Any other severance benefits provided under this Section 2.1 (COBRA assistance and outplacement services) shall cease upon the Eligible Employee’s death.

(h)State “WARN” Statute Impact. If an Eligible Employee experiences a termination that is deemed to constitute an Involuntary Termination in connection with a plant closing/layoff event that is covered by a state law requiring a specified amount of severance to be paid to the Eligible Employee (a “State WARN Event”), the Eligible Employee shall be granted Severance Pay in the amount and form required under the applicable state law and in accordance with the requirements of such state law.

2.2    Conditions on Payment of Severance Pay and Benefits. To the extent allowed by law, payment of the Severance Pay and benefits provided in Section 2.1 of the Plan shall be subject to and conditioned upon the following:

(a)to the extent an Eligible Employee receives notice of a date selected by the Employer (in its sole discretion) on which the Eligible Employee’s Involuntary Termination shall occur (a “Designated Termination Date”), the Eligible Employee must continue to work in a satisfactory manner until his or her Designated Termination Date;

(b)the Eligible Employee must cooperate in transitioning all of the Eligible Employee’s work in consultation with the Eligible Employee’s supervisor or other designated employee;

(c)the Eligible Employee must execute and deliver a severance agreement that includes a release of claims, which agreement shall be in a form specified by the Employer from time to time, which may include restrictive covenants and a waiver as described in Subsection (d) of this Section 2.2) within the time period specified under the terms of the applicable severance offer. Further, in no event will Severance Pay be paid with respect to an Eligible Employee in the event the release of claims form is revoked during the Revocation Period (described in Section 2.1(e) of the Plan); and

(d)    the Eligible Employee must waive the right to receive any other severance payment relating to salary continuation or salary replacement the Eligible Employee may otherwise be eligible to receive upon termination of employment under any employment agreement, severance plan, practice, policy or program of the Employer or an Affiliate.

2.3     Maximum Severance Pay. Notwithstanding any other provisions to the contrary, benefits paid hereunder (a) shall not exceed two times the lesser of (i) the Eligible Employee’s Compensation (as defined in this Section 2.3)

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during the calendar year immediately preceding the Eligible Employee’s Involuntary Termination or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which the Eligible Employee’s Involuntary Termination occurs and (b) shall be paid in full within twenty-four (24) months after the date the Eligible Employee’s Involuntary Termination occurs. In the event that any Severance Pay payable to an Eligible Employee would exceed the twenty-four (24) month period provided in the foregoing sentence if the Severance Pay continued to be paid in accordance with the Employer’s regular payroll practice, any Severance Pay that would otherwise exceed the twenty-four (24) month time period will be paid to the Eligible Employee in a lump sum on the last regular payroll date within the twenty-four (24) month period. For purposes of this Section 2.3, “Compensation” shall mean the Eligible Employee’s total annualized compensation, based upon the annual rate of pay for services provided to the Employer for the calendar year preceding the calendar year in which the Eligible Employee’s Involuntary Termination occurs, adjusted for any increase in such preceding calendar year that was expected to continue indefinitely if the Eligible Employee had not had an Involuntary Termination.

2.4Cessation of Severance Pay Upon Reemployment. If an Eligible Employee who had an Involuntary Termination and who is receiving Severance Pay thereafter accepts reemployment with any Employer during the Severance Period, such Employee’s Severance Pay shall cease on the Rehire Date and any remaining Severance Pay shall be forfeited.

2.5Cessation of Severance Pay After Commencement of Payments. If an Eligible Employee is deemed to have an Involuntary Termination and begins to receive Severance Pay under the Plan and the Employer or the Plan Administrator becomes aware of facts and circumstances that, had the Employer known same at the time of the Eligible Employee’s termination of employment, could have affected the Employer’s determination as to whether such Employee’s termination was an Involuntary Termination, the Plan Administrator may suspend any future Severance Pay payments to the Eligible Employee while the Employer investigates the facts and circumstances and finalizes such investigation, and, if the Employer determines that the Eligible Employee should have been terminated for Cause, such Eligible Employee’s Severance Pay shall cease as of the suspension date, any remaining Severance Pay shall be forfeited and any Severance Pay that has been paid shall be subject to repayment by the Eligible Employee.

2.6    Impact of Debt on Severance Pay. In the event an Eligible Employee is indebted to the Company or Employer (determined in the sole discretion of the Company or Employer, as applicable), the Plan Administrator reserves the right to reduce, offset, withhold, and/or forfeit the Severance Pay otherwise payable under the Plan.

2.7    Employee Benefits. As of the date of an Eligible Employee’s Involuntary Termination, the Eligible Employee’s active participation in any benefit plan, program, or policy sponsored or subsidized by the Employer shall cease, unless otherwise continued pursuant to the terms of such plan, program or policy.

2.8Awards. Any award or grant made to the Eligible Employee under any stock option, stock purchase, or stock appreciation rights plan of the Company or Employer shall be administered and interpreted in accordance with the terms of the applicable plan documents.

2.9Paid Time Off. Any pay for accrued paid time off shall be determined under the terms of the Employer’s applicable policies.

2.10Bonuses. Whether any bonuses or other incentive payments are payable to an Eligible Employee shall be determined based on the terms of any applicable bonus or incentive program, plan, or policy.

2.11    Benefits Not Vested. No one under any circumstance is automatically entitled to Severance Pay or benefits described in Section 2.1 of the Plan. Notwithstanding anything in the Plan to the contrary, the Plan Administrator reserves the right, at its, his or her sole discretion, to increase, decrease, or eliminate Severance Pay and benefits under the Plan.

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ARTICLE 3

ADMINISTRATION OF THE PLAN

3.1Control and Administration. Notwithstanding any other provision in the Plan, and to the full extent permitted under ERISA and the Internal Revenue Code, the Plan Administrator shall have the exclusive right, power and final authority, in its, his or her sole and absolute discretion, to administer, apply, construe and interpret the terms of the Plan and all related plan documents and all facts surrounding claims for benefits under the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan, including, but not limited to, those concerning eligibility for benefits. Accordingly, benefits under the Plan shall be paid only if the Plan Administrator decides in its, his or her sole discretion that an Eligible Employee is entitled to benefits, and the Plan Administrator shall decide all questions regarding the form, amount and duration of benefits. The Plan Administrator may consult with attorneys, consultants and other persons for advice, counsel and reports to make determinations under the Plan, and the Plan Administrator may delegate its administrative duties and responsibilities to persons or entities of its choice, in all cases who may be employees of the Company. All determinations of the Plan Administrator shall be conclusive and binding on all parties. The Plan Administrator shall be the named fiduciary of the Plan for purposes of ERISA.

3.2Claim Procedures.

(a)Procedure for Granting or Denying Claims. An Eligible Employee, or his or her duly authorized representative, may file a claim for payment of benefits under the Plan within 30 days after termination of employment. Such a claim must be made in writing and be delivered to the Plan Administrator, in person or by mail, postage paid. Within 90 days after receipt of such claim, the Plan Administrator shall notify the claimant of the granting or denying, in whole or in part, of such claim, unless special circumstances require an extension of time for processing the claim. In no event may the extension exceed 90 days from the end of the initial 90-day period. If such extension is necessary, the claimant will be given a written notice to this effect prior to the expiration of the initial 90-day period. The Plan Administrator shall have full discretion to deny or grant a claim in whole or in part.

(b)Requirement for Notice of Claim Denial. The Plan Administrator shall provide to every claimant who is denied a claim for benefits a written or electronic notice setting forth in a manner calculated to

be understood by the claimant:

(i)The specific reason or reasons for the denial;

(ii)Specific reference to pertinent Plan provisions on which the denial is based;

(iii)A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material is necessary; and

(iv)An explanation of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

(c)Right to Appeal on Claim Denial. Within 60 days after receipt by the claimant of written or electronic notification of the denial (in whole or in part) of his or her claim, the claimant or his or her duly authorized representative may make a written application to the Plan Administrator, in person or by certified mail, postage prepaid, to be afforded a full and fair review of such denial. The claimant or his or her duly authorized representative may submit written comments, documents, records, and other information relating to the claim for benefits. Moreover, the claimant or his or her duly authorized representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

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(d)Disposition of Disputed Claims. Upon receipt of a request for review, the Plan Administrator shall make a decision on the claim. The review shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision on review shall be made not later than 60 days after the Plan Administrator's receipt of a request for a review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered not later than 120 days after receipt of the request for review. If an extension is necessary, the claimant shall be given written notice of the extension prior to the expiration of the initial 60-day period.

The Plan Administrator shall provide the claimant or his or her duly authorized representative with written or electronic notification of the Plan Administrator’s determination on review. In the case of an adverse determination, the notification shall set forth, in a manner calculated to be understood by the claimant, the specific reason or reasons for the decision as well as specific references to the Plan provisions on which the decision was based. The decision shall also include a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits. Moreover, the decision shall contain a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.

3.3Conditions to Legal Action. No legal action may be commenced or maintained against the Plan, the Company or any Employer prior to the claimant’s exhaustion of the claims procedures set forth in Section 3.2 of the Plan. In addition, no legal action may be commenced against the Plan more than ninety (90) days after the Plan Administrator’s final claim determination on review pursuant to Section 3.2(d) of the Plan. Any legal action must be conducted in the United States District Court for Rhode Island.

3.4Named Fiduciary. The Plan Administrator of the Plan shall be the Named Fiduciary of the Plan for purposes of ERISA Section 402(a)(1).

ARTICLE 4

MISCELLANEOUS

4.1Amendment or Termination. The Plan may be amended, terminated, withdrawn or suspended at any time in writing by the Management Planning and Development Committee of the Company or any individual designated by such Committee to take such actions.

4.2    Choice of Law. The validity, interpretation, construction and performance of the obligations created under the Plan shall be governed by ERISA, and to the extent not preempted by federal law, the laws of the State of Rhode Island without regard to its conflicts of law principles.

4.3Validity. The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect.

4.4Plan Exclusive Source of Rights. The Plan contains all of the terms and conditions with respect to the benefits provided hereunder, and no employee or former employee of the Company or any Employer may rely on any other communication or representation, whether oral or written, of the Company or any Employer or any of its subsidiaries, or any officer or employee thereof, as creating any right or obligation not expressly provided by the Plan.

4.5    Non-assignability. No benefit which shall be payable under the Plan to any Eligible Employee shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge (except as required by law), and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge a benefit shall

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be null and void. No benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any Eligible Employee. No benefit shall be subject to legal attachment or legal process for, or against, the Eligible Employee and the same shall not be recognized under the Plan. Notwithstanding the preceding sentence, the Employer retains the discretion, in accordance with federal and/or state laws, to reduce the amount of benefits payable under the Plan to any Eligible Employee to recover any amounts that the Eligible Employee owes to the Employer.

4.6    No Employment Rights. The Plan shall not give any Eligible Employee any right or claim except to the extent that the right is specifically provided under the terms of the Plan. The establishment of the Plan shall not be construed (a) to give any Eligible Employee a right to continue in the employ of the Employer or (b) to interfere with the right of the Employer to terminate the employment of any Eligible Employee at any time.

4.7    Headings. Article and section headings are for convenience only and the language of the Plan itself will be controlling.

4.8    Gender and Numbers. Masculine pronouns include the feminine as well as the neuter genders, and the singular shall include the plural, unless indicated otherwise by the context.

4.9    Code Section 409A. The benefits provided under the terms of the Plan are intended to fall within the short-term deferral exception, the separation pay exception or another exception to the application of Section 409A of the Code and the applicable guidance issued thereunder. In furtherance of this intent, the Plan shall be interpreted, operated and administered in a manner consistent with this intention. To the extent the benefits provided under the Plan become subject to Code Section 409A and applicable guidance issued thereunder, the Plan shall be construed, and benefits paid hereunder, as necessary to comply with Section 409A of the Code and such guidance. Further, to the extent that an Eligible Employee becomes entitled to receive Severance Pay under the terms of the Plan, and, at the time of the Eligible Employee’s Involuntary Termination, he or she is a “specified employee” within the meaning of Treasury Regulation Section 1.409A- 1(i), any portion of Severance Pay payable to such Eligible Employee that is subject to Code Section 409A and applicable guidance thereunder shall be delayed until the date that is the earlier of (i) the Eligible Employee’s death or (ii) six months following the date of the Eligible Employee’s Involuntary Termination, at which time the payments that were delayed for such six month period shall be paid in a lump sum on the date of the next occurring regular payroll date of the Employer, and any remaining payments shall be paid according to the original schedule provided herein. In addition, each payment of a salary continuation stream of installment payments hereunder shall be a separate payment for purposes of Section 409A of the Code.

4.10Funding. The Plan is not funded, and Severance Pay and benefits under the Plan are paid from the general assets of the Employer.

4.11    Plan Year. The Plan’s records shall be maintained on the basis of the calendar year.

IN WITNESS WHEREOF, the Management Planning and Development Committee of the Company, or its duly authorized delegate, has amended the Plan as of the Effective Date pursuant to the execution hereof on its behalf by a duly authorized officer as of the date set forth below.

	CVS HEALTH CORPORATION
By:	/s/ Laurie P. Havanec
Title:	EVP and Chief People Officer
Date:	September 30, 2023

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Appendix A

Amount of Severance Pay and Outplacement Services,

effective as of September 30, 2023

(General applicability to Eligible Employees to whom no other Appendix applies)

Severance Pay is the Weekly Rate payable for the number of weeks listed below, determined by Grade and Years of Service (YOS)

	Tier 1	Tier 2	Tier 3	Tier 4	Executive Tier 1	Executive Tier 2
	Grades 104, 105, 106, 206, 306	Grades 107, 108, 207, 208, 209, 307, 308, 407, 408	Grades 109, 110, 111, 210, 211, 212, 213, 309, 310, 311, 409, 410, 411	Grades 112, 113, 214, 215, 312, 313, 412, 413	Grades 36 A-             E,70G	Grades 38 A-C, 39 A-B, 71G, 72G
FullYOS	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks
0	2	4	13	26	52	78
1	4	6	13	26	52	78
2	6	8	13	26	52	78
3	8	10	13	26	52	78
4	10	12	13	26	52	78
5	12	14	14	26	52	78
6	13	16	16	26	52	78
7	13	18	18	26	52	78
8	13	20	20	26	52	78
9	13	20	20	26	52	78
10	13	20	20	26	52	78
11	13	20	21	26	52	78
12	13	20	22	26	52	78
13	13	20	23	26	52	78
14	14	20	24	26	52	78
15	15	20	25	28	52	78
16	16	21	26	29	52	78
17	17	22	26	30	52	78
18	18	23	26	31	52	78
19	19	24	26	32	52	78
20	20	25	26	33	52	78
21	21	26	26	34	52	78
22	22	26	26	35	52	78
23	23	26	26	36	52	78
24	24	26	26	37	52	78

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	Tier 1	Tier 2	Tier 3	Tier 4	Executive Tier 1	Executive Tier 2
	Grades 104, 105, 106, 206, 306	Grades 107, 108, 207, 208, 209, 307, 308, 407, 408	Grades 109, 110,111, 210, 211, 212, 213, 309, 310, 311, 409, 410, 411	Grades 112, 113, 214, 215, 312, 313, 412, 413	Grades 36 A-E, 70G	Grades 38 A-C, 39 A-B, 71G, 72G
Full YOS	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks	Number of Weeks
25	25	26	26	38	52	78
26	26	26	27	39	52	78
27	26	26	28	39	52	78
28	26	26	29	39	52	78
29	26	26	30	39	52	78
30	26	26	31	39	52	78
31	26	26	32	39	52	78
32	26	26	33	39	52	78
33	26	26	34	39	52	78
34	26	26	35	39	52	78
35	26	26	36	39	52	78
36+	26	26	39	39	52	78
	6-Week Virtual Outplacement	3-Month Virtual Outplacement	3-Month Professional Outplacement	3-Month Professional Outplacement	6-Month Executive Outplacement	6-Month Executive Outplacement

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Appendix B

Amount of Severance Pay and Outplacement. Services,

effective as of September 30, 2023

(Applicable to Eligible Employees who experience an Involuntary Termination in connectionwith a New Jersey State WARN Event)

Severance Pay is the Weekly Rate payable for the number of weeks listed below, determined by Grade and Years of Service (YOS)

	TIER 1
	Grades 104, 105, 106, 206, 306
Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*	Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*
0	0	2	26	26	2
1	1	3	27	27	2
2	2	4	28	28	2
3	3	5	29	29	2
4	4	6	30	30	2
5	5	7	31	31	2
6	6	7	32	32	2
7	7	6	33	33	2
8	8	5	34	34	2
9	9	4	35	35	2
10	10	3	36	36	2
11	11	2	37	37	2
12	12	2	38	38	2
13	13	2	39	39	2
14	14	2	40	40	2
15	15	2	41	41	2
16	16	2	42	42	2
17	17	2	43	43	2
18	18	2	44	44	2
19	19	2	45	45	2
20	20	2	46	46	2
21	21	2	47	47	2
22	22	2	48	48	2
23	23	2	49	49	2
24	24	2	50	50	2
25	25	2	51	51	2
6-Week Virtual Outplacement*

*Subject to execution of a release and compliance with other requirements of the plan.

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	TIER 2
	Grades 107, 108, 207, 208, 209, 307, 308, 407, 408
Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*	Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*
0	0	4	26	26	2
1	1	5	27	27	2
2	2	6	28	28	2
3	3	7	29	29	2
4	4	8	30	30	2
5	5	9	31	31	2
6	6	10	32	32	2
7	7	11	33	33	2
8	8	12	34	34	2
9	9	11	35	35	2
10	10	10	36	36	2
11	11	9	37	37	2
12	12	8	38	38	2
13	13	7	39	39	2
14	14	6	40	40	2
15	15	5	41	41	2
16	16	5	42	42	2
17	17	5	43	43	2
18	18	5	44	44	2
19	19	5	45	45	2
20	20	5	46	46	2
21	21	4	47	47	2
22	22	3	48	48	2
23	23	2	49	49	2
24	24	2	50	50	2
25	25	2	51	51	2
3-Month Virtual Outplacement*

*Subject to execution of a release and compliance with other requirements of the plan.

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	TIER 3
	Grades 109, 110, 111, 210, 211, 212, 213, 309, 310, 311, 409, 410, 411
Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*	Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*
0	0	13	26	26	2
1	1	12	27	27	2
2	2	11	28	28	2
3	3	10	29	29	2
4	4	9	30	30	2
5	5	9	31	31	2
6	6	11	32	32	2
7	7	12	33	33	2
8	8	11	34	34	2
9	9	11	35	35	2
10	10	10	36	36	2
11	11	10	37	37	2
12	12	10	38	38	2
13	13	10	39	39	2
14	14	10	40	40	2
15	15	10	41	41	2
16	16	10	42	42	2
17	17	9	43	43	2
18	18	8	44	44	2
19	19	7	45	45	2
20	20	6	46	46	2
21	21	5	47	47	2
22	22	4	48	48	2
23	23	3	49	49	2
24	24	2	50	50	2
25	25	2	51	51	2
3-Month Professional Outplacement*

*Subject to execution of a release and compliance with other requirements of the plan.

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	TIER 4
	Grades 112, 113, 215, 312, 313, 412, 413
Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*	Full YOS	Number of Weeks NJ State WARN Event Lump Sum	Number of Weeks Non-NJ State WARN Event Severance*
0	0	26	26	26	13
1	1	25	27	27	12
2	2	24	28	28	11
3	3	23	29	29	10
4	4	22	30	30	9
5	5	21	31	31	8
6	6	20	32	32	7
7	7	19	33	33	6
8	8	18	34	34	5
9	9	17	35	35	4
10	10	16	36	36	3
11	11	15	37	37	2
12	12	14	38	38	2
13	13	13	39	39	2
14	14	12	40	40	2
15	15	13	41	41	2
16	16	13	42	42	2
17	17	13	43	43	2
18	18	13	44	44	2
19	19	13	45	45	2
20	20	13	46	46	2
21	21	13	47	47	2
22	22	13	48	48	2
23	23	13	49	49	2
24	24	13	50	50	2
25	25	13	51	51	2
3-Month Professional Outplacement*

        *Subject to execution of a release and compliance with other requirements of the plan.

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	Executive Tier I
	Grades 36 A-E, 70G
Full YOS	Number of Weeks NJ WARN Lump Sum	Number of Weeks Non-NJ WARN Severance*	Full YOS	Number of Weeks NJ WARN Lump Sum	Number of Weeks Non-NJ WARN Severance*
0	0	52	26	26	26
1	1	51	27	27	25
2	2	50	28	28	24
3	3	49	29	29	23
4	4	48	30	30	22
5	5	47	31	31	21
6	6	46	32	32	20
7	7	45	33	33	19
8	8	44	34	34	18
9	9	43	35	35	17
10	10	42	36	36	16
11	11	41	37	37	15
12	12	40	38	38	14
13	13	39	39	39	13
14	14	38	40	40	12
15	15	37	41	41	11
16	16	36	42	42	10
17	17	35	43	43	9
18	18	34	44	44	8
19	19	33	45	45	7
20	20	32	46	46	6
21	21	31	47	47	5
22	22	30	48	48	4
23	23	29	49	49	3
24	24	28	50	50	2
25	25	27	51	51	2
6-Month Executive Outplacement*

*Subject to execution of a release and compliance with other requirements of the plan.

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	Executive Tier II
	Grades 38 A-C, 39 A-B, 71G, 72G
Full YOS	Number of Weeks NJ WARN Lump Sum	Number of Weeks Non-NJ WARN Severance*	Full YOS	Number of Weeks NJ WARN Lump Sum	Number of Weeks Non-NJ WARN Severance*
0	0	78	26	26	52
1	1	77	27	27	51
2	2	76	28	28	50
3	3	75	29	29	49
4	4	74	30	30	48
5	5	73	31	31	47
6	6	72	32	32	46
7	7	71	33	33	45
8	8	70	34	34	44
9	9	69	35	35	43
10	10	68	36	36	42
11	11	67	37	37	41
12	12	66	38	38	40
13	13	65	39	39	39
14	14	64	40	40	38
15	15	63	41	41	37
16	16	62	42	42	36
17	17	61	43	43	35
18	18	60	44	44	34
19	19	59	45	45	33
20	20	58	46	46	32
21	21	57	47	47	31
22	22	56	48	48	30
23	23	55	49	49	29
24	24	54	50	50	28
25	25	53	51	51	27
6-Month Executive Outplacement*

*Subject to execution of a release and compliance with other requirements of the plan.

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EX-15.1

Exhibit 15.1

Letter re: Unaudited Interim Financial Information

November 1, 2023

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. 333-272200 and Form S-8 Nos. 333-273611, 333-271582, 333-270936, 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 November 1, 2023, 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 September 30, 2023.

/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:	November 1, 2023	/S/     KAREN S. LYNCH
		Karen S. Lynch
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Thomas F. Cowhey, Senior Vice President, Interim 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:	November 1, 2023	/s/     THOMAS F. COWHEY
		Thomas F. Cowhey
		Senior Vice President, Interim 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 September 30, 2023 (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:	November 1, 2023	/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 September 30, 2023 (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, Thomas F. Cowhey, Senior Vice President, Interim 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:	November 1, 2023	/s/    THOMAS F. COWHEY
		Thomas F. Cowhey
		Senior Vice President, Interim Chief Financial Officer

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Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 25, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
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		1,286,896,582
Entity Central Index Key	0000064803
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Premiums	$ 24,657	$ 21,003	$ 74,117	$ 63,894
Net investment income	277	201	885	515
Total revenues	89,764	81,159	263,963	238,621
Operating costs:
Cost of products sold	54,688	50,365	159,679	145,164
Health care costs	21,499	17,401	63,729	52,814
Restructuring charges	11	0	507	0
Opioid litigation charges	0	5,220	0	5,704
Loss on assets held for sale	0	2,480	349	2,521
Operating expenses	9,876	9,612	29,329	28,123
Total operating costs	86,074	85,078	253,593	234,326
Operating income (loss)	3,690	(3,919)	10,370	4,295
Interest expense	693	566	1,968	1,735
Other income	(22)	(41)	(66)	(126)
Income (loss) before income tax provision (benefit)	3,019	(4,444)	8,468	2,686
Income tax provision (benefit)	754	(1,045)	2,147	691
Net income (loss)	2,265	(3,399)	6,321	1,995
Net income attributable to noncontrolling interests	(4)	(7)	(23)	(18)
Net income (loss) attributable to CVS Health	$ 2,261	$ (3,406)	$ 6,298	$ 1,977
Net income (loss) per share attributable to CVS Health:
Basic (in dollars per share)	$ 1.76	$ (2.59)	$ 4.90	$ 1.51
Diluted (in dollars per share)	$ 1.75	$ (2.59)	$ 4.88	$ 1.49
Weighted average shares outstanding:
Basic (in shares)	1,287	1,315	1,284	1,313
Diluted (in shares)	1,290	1,315	1,289	1,324
Dividends declared per share (in dollars per share)	$ 0.605	$ 0.55	$ 1.815	$ 1.65
Cost, Product and Service [Extensible List]	Products	Products	Products	Products
Products
Revenues:
Revenues	$ 61,298	$ 57,643	$ 179,984	$ 166,959
Services
Revenues:
Revenues	$ 3,532	$ 2,312	$ 8,977	$ 7,253

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 2,265	$ (3,399)	$ 6,321	$ 1,995
Other comprehensive income (loss), net of tax:
Net unrealized investment gains (losses)	(321)	(637)	85	(2,634)
Change in discount rate on long-duration insurance reserves	181	250	167	929
Foreign currency translation adjustments	(2)	(7)	(1)	(5)
Net cash flow hedges	(4)	8	9	20
Pension and other postretirement benefits	0	1	0	2
Other comprehensive income (loss)	(146)	(385)	260	(1,688)
Comprehensive income (loss)	2,119	(3,784)	6,581	307
Comprehensive income attributable to noncontrolling interests	(4)	(7)	(23)	(18)
Comprehensive income (loss) attributable to CVS Health	$ 2,115	$ (3,791)	$ 6,558	$ 289

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Assets:
Cash and cash equivalents	$ 13,043	$ 12,945
Investments	3,145	2,778
Accounts receivable, net	32,927	27,276
Inventories	17,954	19,090
Assets held for sale	0	908
Other current assets	3,074	2,636
Total current assets	70,143	65,633
Long-term investments	21,667	21,096
Property and equipment, net	13,022	12,873
Operating lease right-of-use assets	17,564	17,872
Goodwill	91,261	78,150
Intangible assets, net	29,624	24,803
Separate accounts assets	3,200	3,228
Other assets	4,825	4,620
Total assets	251,306	228,275
Liabilities:
Accounts payable	14,874	14,838
Pharmacy claims and discounts payable	21,497	19,423
Health care costs payable	12,550	10,142
Policyholders’ funds	1,440	1,500
Accrued expenses	22,571	18,745
Other insurance liabilities	4,748	1,089
Current portion of operating lease liabilities	1,741	1,678
Current portion of long-term debt	2,132	1,778
Liabilities held for sale	0	228
Total current liabilities	81,553	69,421
Long-term operating lease liabilities	16,441	16,800
Long-term debt	59,782	50,476
Deferred income taxes	4,250	4,016
Separate accounts liabilities	3,200	3,228
Other long-term insurance liabilities	5,333	5,835
Other long-term liabilities	6,237	6,730
Total liabilities	176,796	156,506
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; 1,767 shares issued and 1,287 shares outstanding at September 30, 2023 and 1,758 shares issued and 1,300 shares outstanding at December 31, 2022 and capital surplus	48,829	48,193
Treasury stock, at cost: 480 shares at September 30, 2023 and 458 shares at December 31, 2022	(33,831)	(31,858)
Retained earnings	60,343	56,398
Accumulated other comprehensive loss	(1,004)	(1,264)
Total CVS Health shareholders’ equity	74,337	71,469
Noncontrolling interests	173	300
Total shareholders’ equity	74,510	71,769
Total liabilities and shareholders’ equity	$ 251,306	$ 228,275

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
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)	1,767,000,000	1,758,000,000
Common stock, shares outstanding (in shares)	1,287,000,000	1,300,000,000
Treasury stock (in shares)	480,000,000	458,000,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Cash receipts from customers	$ 260,300	$ 235,395
Cash paid for inventory, prescriptions dispensed and health services rendered	(153,051)	(138,785)
Insurance benefits paid	(61,658)	(51,434)
Cash paid to other suppliers and employees	(26,038)	(22,728)
Interest and investment income received	1,174	687
Interest paid	(2,049)	(1,936)
Income taxes paid	(2,616)	(3,070)
Net cash provided by operating activities	16,062	18,129
Cash flows from investing activities:
Proceeds from sales and maturities of investments	5,547	5,535
Purchases of investments	(6,625)	(6,439)
Purchases of property and equipment	(2,120)	(2,039)
Acquisitions (net of cash and restricted cash acquired)	(16,492)	(131)
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,808 in 2022)	0	(1,928)
Other	43	74
Net cash used in investing activities	(19,647)	(4,928)
Cash flows from financing activities:
Proceeds from issuance of short-term loan	5,000	0
Repayment of short-term loan	(5,000)	0
Proceeds from issuance of long-term debt	10,898	0
Repayments of long-term debt	(2,734)	(4,195)
Repurchase of common stock	(2,013)	(2,000)
Dividends paid	(2,353)	(2,188)
Proceeds from exercise of stock options	242	510
Payments for taxes related to net share settlement of equity awards	(175)	(337)
Other	(210)	(119)
Net cash provided by (used in) financing activities	3,655	(8,329)
Net increase in cash, cash equivalents and restricted cash	70	4,872
Cash, cash equivalents and restricted cash at the beginning of the period	13,305	12,691
Cash, cash equivalents and restricted cash at the end of the period	13,375	17,563
Reconciliation of net income to net cash provided by operating activities:
Net income (loss)	6,321	1,995
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,232	3,181
Loss on assets held for sale	349	2,521
Stock-based compensation	461	341
Gain on sale of subsidiary	0	(225)
Deferred income taxes and other noncash items	(360)	(2,213)
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(3,920)	(2,009)
Inventories	1,305	(415)
Other assets	(518)	(244)
Accounts payable and pharmacy claims and discounts payable	2,466	3,350
Health care costs payable and other insurance liabilities	4,679	4,476
Other liabilities	2,047	7,371
Net cash provided by operating activities	$ 16,062	$ 18,129

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions		Total	Adoption of new accounting standard, adjustment		Total CVS Health Shareholders’ Equity	Total CVS Health Shareholders’ Equity Adoption of new accounting standard, adjustment	[2]	Common Shares	Treasury Stock		Common Stock and Capital Surplus		Retained Earnings	Retained Earnings Adoption of new accounting standard, adjustment	[2]	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Adoption of new accounting standard, adjustment	[2]	Noncontrolling Interests
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021								1,744
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021	[1]								(422)
Balance at beginning of period at Dec. 31, 2021		$ 75,381	$ (540)	[2]	$ 75,075	$ (540)			$ (28,173)	[1]	$ 47,377	[3]	$ 54,906	$ 91		$ 965	$ (631)		$ 306
Shareholders' Equity [Roll Forward]
Net income (loss)		2,355			2,354								2,354						1
Other comprehensive income (loss)		(763)			(763)											(763)
Stock option activity, stock awards and other (in shares)								3
Stock option activity, stock awards and other		300			300						300	[3]
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
Treasury shares outstanding, balance at end of period (in shares) at Mar. 31, 2022	[1]								(441)
Balance at end of period at Mar. 31, 2022		74,034			73,724				$ (30,145)	[1]	47,677	[3]	56,621			(429)			310
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021								1,744
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2021	[1]								(422)
Balance at beginning of period at Dec. 31, 2021		75,381	(540)	[2]	75,075	$ (540)			$ (28,173)	[1]	47,377	[3]	54,906	$ 91		965	$ (631)		306
Shareholders' Equity [Roll Forward]
Net income (loss)		1,995	130
Other comprehensive income (loss)		(1,688)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2022								1,757
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2022	[1]								(442)
Balance at end of period at Sep. 30, 2022		71,487			71,159				$ (30,326)	[1]	48,047	[3]	54,792			(1,354)			328
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2022								1,747
Treasury shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2022	[1]								(441)
Balance at beginning of period at Mar. 31, 2022		74,034			73,724				$ (30,145)	[1]	47,677	[3]	56,621			(429)			310
Shareholders' Equity [Roll Forward]
Net income (loss)		3,039			3,029								3,029						10
Other comprehensive income (loss)		(540)			(540)											(540)
Stock option activity, stock awards and other (in shares)								8
Stock option activity, stock awards and other		197			197						197	[3]
Purchases of treasury shares, net of ESPP issuances (in shares)	[1]								(2)
Purchase of treasury shares, net of ESPP issuances		(267)			(267)				$ (267)	[1]
Common stock dividends		(729)			(729)								(729)
Other increases (decreases) in noncontrolling interests		2																	2
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2022								1,755
Treasury shares outstanding, balance at end of period (in shares) at Jun. 30, 2022	[1]								(443)
Balance at end of period at Jun. 30, 2022		75,736			75,414				$ (30,412)	[1]	47,874	[3]	58,921			(969)			322
Shareholders' Equity [Roll Forward]
Net income (loss)		(3,399)	10		(3,406)								(3,406)						7
Other comprehensive income (loss)		(385)			(385)											(385)
Stock option activity, stock awards and other (in shares)								2
Stock option activity, stock awards and other		173			173						173	[3]
ESPP issuances, net of purchase of treasury shares (in shares)	[1]								1
ESPP issuances, net of purchase of treasury shares		86			86				$ 86	[1]
Common stock dividends		(723)			(723)								(723)
Other increases (decreases) in noncontrolling interests		(1)																	(1)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2022								1,757
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2022	[1]								(442)
Balance at end of period at Sep. 30, 2022		$ 71,487			71,159				$ (30,326)	[1]	48,047	[3]	54,792			(1,354)			328
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022								1,758
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022		(458)							(458)	[4]
Balance at beginning of period at Dec. 31, 2022		$ 71,769	454		71,469				$ (31,858)	[4]	48,193	[5]	56,398			(1,264)			300
Shareholders' Equity [Roll Forward]
Net income (loss)		2,142			2,136								2,136						6
Other comprehensive income (loss)		389			389											389
Stock option activity, stock awards and other (in shares)								1
Stock option activity, stock awards and other		122			122						122	[5]
Purchases of treasury shares, net of ESPP issuances (in shares)	[4]								(22)
Purchase of treasury shares, net of ESPP issuances		(1,962)			(1,962)				$ (1,944)	[4]	(18)	[5]
Common stock dividends		(781)			(781)								(781)
Other increases (decreases) in noncontrolling interests		(99)			9						9	[5]							(108)
Shares outstanding, balance at end of period (in shares) at Mar. 31, 2023								1,759
Treasury shares outstanding, balance at end of period (in shares) at Mar. 31, 2023	[4]								(480)
Balance at end of period at Mar. 31, 2023		$ 71,580			71,382				$ (33,802)	[4]	48,306	[5]	57,753			(875)			198
Shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022								1,758
Treasury shares outstanding, balance at beginning of period (in shares) at Dec. 31, 2022		(458)							(458)	[4]
Balance at beginning of period at Dec. 31, 2022		$ 71,769	$ 454		71,469				$ (31,858)	[4]	48,193	[5]	56,398			(1,264)			300
Shareholders' Equity [Roll Forward]
Net income (loss)		6,321
Other comprehensive income (loss)		$ 260
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2023								1,767
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2023		(480)							(480)	[4]
Balance at end of period at Sep. 30, 2023		$ 74,510			74,337				$ (33,831)	[4]	48,829	[5]	60,343			(1,004)			173
Shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2023								1,759
Treasury shares outstanding, balance at beginning of period (in shares) at Mar. 31, 2023	[4]								(480)
Balance at beginning of period at Mar. 31, 2023		71,580			71,382				$ (33,802)	[4]	48,306	[5]	57,753			(875)			198
Shareholders' Equity [Roll Forward]
Net income (loss)		1,914			1,901								1,901						13
Other comprehensive income (loss)		17			17											17
Stock option activity, stock awards and other (in shares)								5
Stock option activity, stock awards and other		345			345						345	[5]
Purchases of treasury shares, net of ESPP issuances (in shares)	[4]								(2)
Purchase of treasury shares, net of ESPP issuances		(129)			(129)				$ (131)	[4]	2	[5]
Common stock dividends		(786)			(786)								(786)
Acquisition of noncontrolling interests		66																	66
Other increases (decreases) in noncontrolling interests		(5)			(4)						(4)	[5]							(1)
Shares outstanding, balance at end of period (in shares) at Jun. 30, 2023								1,764
Treasury shares outstanding, balance at end of period (in shares) at Jun. 30, 2023	[4]								(482)
Balance at end of period at Jun. 30, 2023		73,002			72,726				$ (33,933)	[4]	48,649	[5]	58,868			(858)			276
Shareholders' Equity [Roll Forward]
Net income (loss)		2,265			2,261								2,261						4
Other comprehensive income (loss)		(146)			(146)											(146)
Stock option activity, stock awards and other (in shares)								3
Stock option activity, stock awards and other		165			165						165	[5]
ESPP issuances, net of purchase of treasury shares (in shares)	[4]								2
ESPP issuances, net of purchase of treasury shares		105			105				$ 102	[4]	3	[5]
Common stock dividends		(786)			(786)								(786)
Other increases (decreases) in noncontrolling interests		$ (95)			12						12	[5]							(107)
Shares outstanding, balance at end of period (in shares) at Sep. 30, 2023								1,767
Treasury shares outstanding, balance at end of period (in shares) at Sep. 30, 2023		(480)							(480)	[4]
Balance at end of period at Sep. 30, 2023		$ 74,510			$ 74,337				$ (33,831)	[4]	$ 48,829	[5]	$ 60,343			$ (1,004)			$ 173

[1] Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021.

[2] Reflects the adoption of Accounting Standards Update (“ASU”) 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the three months ended March 31, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

[3] Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2022 and June 30, 2022 and $17 million as of March 31, 2022 and December 31, 2021.

[4] Treasury shares include 1 million shares held in trust and treasury stock includes $29 million related to shares held in trust as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022.

[5] Common stock and capital surplus includes the par value of common stock of $18 million as of September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022.

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Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) shares in Millions, $ in Millions	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Statement of Stockholders' Equity [Abstract]
Treasury shares held in trust (in shares)	1	1	1	1	1	1	1	1
Treasury shares held in trust	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29	$ 29
Common stock	$ 18	$ 18	$ 18	$ 18	$ 18	$ 18	$ 17	$ 17

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($)
Statement of Cash Flows [Abstract]
Cash and restricted cash sold	$ 2,808

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

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 1,000 walk-in medical clinics, 192 primary care medical clinics, a leading pharmacy benefits manager with approximately 110 million plan members and 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 more than 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 is a leader in key segments of health care through its foundational businesses and is creating new sources of value by expanding into next generation care delivery and health services, with a goal of improving satisfaction levels for both providers and consumers. The Company believes its integrated health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

In August 2023, the Company announced the launch of CordavisTM, a wholly owned subsidiary that will work directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products. Through Cordavis, the Company will help to ensure the consistent long-term supply of FDA approved, affordable biosimilars for the U.S. pharmaceutical market.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations. This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. Prior period segment financial information has been recast to conform with the current period presentation.

Following the segment realignment described above, the Company’s four reportable segments are as follows: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness 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 and Medicaid health care management 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. The Company entered Public Exchanges in four additional states effective January 2023 and will enter an additional five states effective January 2024.

Health Services Segment

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides 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 and provides various administrative, management and reporting services to pharmaceutical manufacturers. The Health Services segment’s clients are primarily employers,

insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, the U.S. Centers for Medicare & Medicaid Services (“CMS”), plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities.

Pharmacy & Consumer Wellness Segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of September 30, 2023, the Pharmacy & Consumer Wellness segment operated more than 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.

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 transaction and 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 for the year ended December 31, 2022, which were revised to conform with current year financial statement changes as described in Note 13 “Segment Reporting,” and are included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 25, 2023 (the “May 2023 8-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 primarily represents funds held on behalf of members and funds held in escrow in connection with agreements with accountable care organizations.

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 demand deposits, 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	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	13,043	$	12,945
Restricted cash (included in other current assets)	96		144
Restricted cash (included in other assets)	236		216
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	13,375	$	13,305

Accounts Receivable

Accounts receivable are stated net of allowances for credit losses, customer credit allowances, contractual allowances and estimated terminations. Accounts receivable, net at September 30, 2023 and December 31, 2022 was composed of the following:

In millions	September 30, 2023		December 31, 2022
Trade receivables	$	10,424	$	8,983
Vendor and manufacturer receivables	16,646		12,395
Premium receivables	3,254		2,676
Other receivables	2,603		3,449
Total accounts receivable, net (1)	$	32,927	$	27,503

_____________________________________________

(1)Includes accounts receivable of $227 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

The Company’s allowance for credit losses was $357 million and $333 million as of September 30, 2023 and December 31, 2022, 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.

Health Care Contract Acquisition Costs

Insurance products included in the Health Care Benefits segment are cancellable by either the customer or the member monthly upon written notice. Acquisition costs related to prepaid health care and health indemnity contracts are generally expensed as incurred. For certain long-duration insurance contracts, acquisition costs directly related to the successful acquisition of a new or renewal insurance contract, including commissions, are deferred and are recorded as other current assets or other assets on

the unaudited condensed consolidated balance sheets. Contracts are grouped by product and issue year into cohorts consistent with the grouping used in estimating the associated liability and are amortized on a constant level basis based on the remaining in-force policies over the estimated term of the contracts to approximate straight-line amortization. Changes to the Company’s assumptions, including assumptions related to persistency, are reflected at the cohort level at the time of change and are recognized prospectively over the estimated terms of the contract. The amortization of deferred acquisition costs is recorded in operating expenses in the unaudited condensed consolidated statements of operations.

The following is a roll forward of deferred acquisition costs for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Deferred acquisition costs, beginning of the period	$	1,219	$	879
Capitalizations	414		423
Amortization expense	(196)		(163)
Deferred acquisition costs, end of the period	$	1,437	$	1,139

Goodwill

The Company accounts for business combinations using the acquisition method of accounting, which requires the excess cost of an acquisition over the fair value of net assets acquired and identifiable intangible assets to be recorded as goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently, if necessary.

Effective for the 2023 annual goodwill impairment test, the Company elected to change its annual goodwill impairment test date from August 31st to October 31st to better align with its annual budgeting processes, as this previous election predates large acquisitions such as Caremark Rx, Inc. and Aetna Inc.

The Company’s most recent goodwill impairment test was performed as of January 1, 2023, in connection with the segment realignment previously described in the “Description of Business” section. The results of that impairment test indicated that there was no impairment of goodwill as of the testing date, with the fair values of all reporting units with goodwill exceeding their respective carrying values by significant margins.

Intangible Assets

The Company’s identifiable intangible assets consist primarily of trademarks, trade names, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired (“VOBA”). These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.

The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset. Definite-lived intangible assets are amortized using the straight-line method. VOBA is subject to loss recognition testing annually, or more frequently, if necessary.

Indefinite lived intangible assets are not amortized but are tested for impairment annually, or more frequently, if necessary.

Separate Accounts

Separate Accounts assets and liabilities related to large case pensions products represent funds maintained to meet specific objectives of contract holders who bear the investment risk. These assets and liabilities are carried at fair value. Net investment income (including net realized capital gains and losses) accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals and net investment income (including net realized and net unrealized capital gains and losses) on Separate Accounts assets are not reflected in the unaudited condensed consolidated statements of operations or cash flows. Management fees charged to contract holders are included in services revenue and recognized over the period earned.

See Note 5 ‘‘Fair Value’’ and Note 7 ‘‘Other Insurance Liabilities and Separate Accounts’’ for additional information about separate accounts.

Future Policy Benefits

Future policy benefits consist primarily of reserves for products for which the Company no longer solicits or accepts new customers, including limited payment pension and annuity contracts and long-term care insurance contracts and are recorded in other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. Contracts are grouped into cohorts by contract type and issue year. The liability for future policy benefits is adjusted for differences between actual and expected experience.

Reserves for limited payment pension and annuity contracts represent the Company’s estimate of the present value of future benefits to be paid to or on behalf of policyholders and are computed using actuarial principles that consider, among other things, assumptions reflecting anticipated mortality and retirement experience. On an annual basis, or more frequently if necessary, the Company reviews mortality assumptions against both industry standards and its experience.

Reserves for long-term care insurance contracts represent the Company’s estimate of the present value of future benefits and settlement costs to be paid to or on behalf of policyholders less the present value of future net premiums. The Company’s estimate of the present value of future benefits under such contracts is based upon mortality, morbidity, lapse and interest rate assumptions. On an annual basis, or more frequently if necessary, the Company reviews its mortality, morbidity and lapse assumptions against its experience. Annually, or each time the assumptions are changed, the net premium ratio used to calculate the future policy benefit liability is updated to reflect actual experience, as well as the impact of any change in assumptions on the Company’s future cash flows.

The Company discounts its future policy benefit liability using a curve of spot rates derived from an upper-medium grade fixed-income investment. At each reporting date, the Company will measure its liability for future policy benefits using both the current spot rate curve and the locked-in discount rate at each cohort’s inception. Any difference between the measured liabilities is recorded in other comprehensive income (loss). In subsequent periods, the current period amount recorded in other comprehensive income (loss) will be adjusted for amounts previously recorded in accumulated other comprehensive loss.

As of September 30, 2023, future policy benefits balances of $366 million and $4.4 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively. As of December 31, 2022, future policy benefits balances of $334 million and $4.7 billion were recorded in other insurance liabilities and other long-term insurance liabilities, respectively.

See Note 7 ‘‘Other Insurance Liabilities and Separate Accounts’’ for additional information about future policy benefits.

Revenue Recognition

Disaggregation of Revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2023 and 2022:

In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	44,985	$	22,977	$	—	$	(11,764)	$	56,198
Front Store	—		—		5,371		—		—		5,371
Premiums	24,645		—		—		12		—		24,657
Net investment income (loss)	187		—		(2)		92		—		277
Other	1,464		1,906		526		1		(636)		3,261
Total	$	26,296	$	46,891	$	28,872	$	105	$	(12,400)	$	89,764
Health Services distribution channel:
Pharmacy network (1)			$	27,981
Mail & specialty (2)			17,004
Other			1,906
Total			$	46,891
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,652	$	21,084	$	—	$	(11,361)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,406		602		582		18		(609)		1,999
Total	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Health Services distribution channel:
Pharmacy network (1)			$	26,334
Mail & specialty (2)			16,318
Other			602
Total			$	43,254

In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	133,428	$	67,371	$	—	$	(36,754)	$	164,045
Front Store	—		—		16,597		—		—		16,597
Premiums	74,079		—		—		38		—		74,117
Net investment income (loss)	556		—		(4)		333		—		885
Other	4,285		4,269		1,614		5		(1,854)		8,319
Total	$	78,920	$	137,697	$	85,578	$	376	$	(38,608)	$	263,963
Health Services distribution channel:
Pharmacy network (1)			$	83,050
Mail & specialty (2)			50,378
Other			4,269
Total			$	137,697
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	123,627	$	61,496	$	—	$	(33,932)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,205		2,180		1,799		51		(1,844)		6,391
Total	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Health Services distribution channel:
Pharmacy network (1)			$	76,358
Mail & specialty (2)			47,269
Other			2,180
Total			$	125,807

_____________________________________________

(1)Health Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies. Effective January 1, 2023, pharmacy network also includes activity associated with Maintenance Choice®, which 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. Maintenance Choice activity was previously reflected in mail & specialty. Prior period financial information has been revised to conform with current period presentation.

(2)Health Services mail & specialty is defined as specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as mail order and specialty claims fulfilled by the Pharmacy & Consumer Wellness segment. Effective January 1, 2023, mail & specialty excludes Maintenance Choice activity, which is now reflected within pharmacy network. Prior period financial information has been revised to conform with current period presentation.

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 primarily 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	September 30, 2023		December 31, 2022
Trade receivables (included in accounts receivable, net)	$	10,424	$	8,983
Contract liabilities (included in accrued expenses)	167		71

During the nine months ended September 30, 2023 and 2022, 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. During the nine months ended September 30, 2023, the contract liabilities balance also reflects the addition of contract liabilities acquired in connection with the Company’s acquisitions of Signify Health, Inc. (“Signify Health”) and Oak Street Health, Inc. (“Oak Street Health”) on March 29, 2023 and May 2, 2023, respectively. Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2023		2022
Contract liabilities, beginning of the period	$	71	$	87
Rewards earnings and gift card issuances	250		250
Redemption and breakage	(267)		(263)
Acquired contract liabilities	109		—
Other	4		—
Contract liabilities, end of the period	$	167	$	74

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 $12 million and $16 million in the three months ended September 30, 2023 and 2022, respectively, and expensed fees for the use of this network of $44 million and $47 million in the nine months ended September 30, 2023 and 2022, 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”), which operates an LTC pharmacy. Heartland paid the Company $5 million and $22 million for pharmaceutical inventory purchases during the three months ended September 30, 2023 and 2022, respectively, and $34 million and $66 million for pharmaceutical inventory purchases during the nine months ended September 30, 2023 and 2022, 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 Recently Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) (the “long-duration insurance standard”). 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 Company adopted this accounting standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the “transition date”, for changes to its liabilities for future policy benefits, deferred acquisition costs and value of business acquired intangible asset. Upon adoption, the Company recorded a transition date net adjustment to reduce accumulated other comprehensive income (loss) by $986 million ($766 million after-

tax) with a corresponding increase to its liability for future policy benefits, the majority of which is included within other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. The transition date net adjustment was 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 historical guidance. The Company was not required to record an adjustment to retained earnings on the transition date. Prior period financial information has been revised to reflect the adoption of the long-duration insurance standard.

The following summarizes changes in the balances of long-duration insurance liabilities as a result of the adoption of the long-duration insurance standard effective January 1, 2021:

In millions	Large Case Pensions		Long-Term Care		Other
Balance at December 31, 2020, net of reinsurance	$	3,224	$	1,142	$	480
Add: Reinsurance recoverable	—		—		274
Balance at December 31, 2020	3,224		1,142		754
Change in discount rate assumptions	604		553		44
Removal of shadow adjustments in accumulated other comprehensive income	(181)		—		—
Adjusted balance at January 1, 2021	3,647		1,695		798
Less: Reinsurance recoverable	—		—		308
Adjusted balance at January 1, 2021, net of reinsurance	$	3,647	$	1,695	$	490

Impact of Long-Duration Insurance Standard Adoption on Financial Statement Line Items

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Three Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	17,419	$	(18)	$	17,401
Operating expenses	9,606		6		9,612
Total operating costs	85,090		(12)		85,078
Operating loss	(3,931)		12		(3,919)
Loss before income tax benefit	(4,456)		12		(4,444)
Income tax benefit	(1,047)		2		(1,045)
Net loss	(3,409)		10		(3,399)
Net loss attributable to CVS Health	(3,416)		10		(3,406)
Net loss per share attributable to CVS Health:
Basic	$	(2.60)	$	0.01	$	(2.59)
Diluted	$	(2.60)	$	0.01	$	(2.59)
Nine Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	52,976	$	(162)	$	52,814
Operating expenses	28,128		(5)		28,123
Total operating costs	234,493		(167)		234,326
Operating income	4,128		167		4,295
Income before income tax provision	2,519		167		2,686
Income tax provision	654		37		691
Net income	1,865		130		1,995
Net income attributable to CVS Health	1,847		130		1,977
Net income per share attributable to CVS Health:
Basic	$	1.41	$	0.10	$	1.51
Diluted	$	1.40	$	0.09	$	1.49

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated balance sheet as of December 31, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2022		Adjustments		Adjusted December 31, 2022
Condensed Consolidated Balance Sheet:
Other current assets	$	2,685	$	(49)	$	2,636
Total current assets	65,682		(49)		65,633
Intangible assets, net	24,754		49		24,803
Total assets	228,275		—		228,275
Health care costs payable	10,406		(264)		10,142
Other insurance liabilities	1,140		(51)		1,089
Total current liabilities	69,736		(315)		69,421
Deferred income taxes	3,880		136		4,016
Other long-term insurance liabilities	6,108		(273)		5,835
Other long-term liabilities	6,732		(2)		6,730
Total liabilities	156,960		(454)		156,506
Retained earnings	56,145		253		56,398
Accumulated other comprehensive loss	(1,465)		201		(1,264)
Total CVS Health shareholders’ equity	71,015		454		71,469
Total shareholders’ equity	71,315		454		71,769
Total liabilities and shareholders’ equity	228,275		—		228,275

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Condensed Consolidated Statement of Cash Flows:
Reconciliation of net income to net cash provided by operating activities:
Net income	$	1,865	$	130	$	1,995
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,198		(17)		3,181
Deferred income taxes and other noncash items	(2,250)		37		(2,213)
Change in operating assets and liabilities, net of effects from acquisitions:
Other assets	(311)		67		(244)
Health care costs payable and other insurance liabilities	4,687		(211)		4,476
Other liabilities	7,377		(6)		7,371

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Acquisitions and Assets Held for Sale

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions and Assets Held for Sale

Acquisitions and Assets Held for Sale

Oak Street Health Acquisition

On May 2, 2023 (the “Oak Street Health Acquisition Date”), the Company acquired 100% of the outstanding shares and voting interest of Oak Street Health for cash (“Oak Street Health Acquisition”). Under the terms of the merger agreement, Oak Street Health stockholders received $39.00 per share in cash. The Company financed the transaction with borrowings of $5.0 billion from a term loan agreement entered into on May 1, 2023 as described in Note 8 ‘‘Borrowings’’ and cash on hand. Oak Street Health is a leading multi-payor, senior focused value-based primary care company. Oak Street Health is included within the Health Services segment. The Company acquired Oak Street Health to advance its value-based care strategy and broaden its platform into primary care.

The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	9,579
Fair value of replacement equity awards for pre-combination services (3.9 million shares) (1)	118
Effective settlement of pre-existing relationship (2)	(29)
Total consideration transferred	$	9,668

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Oak Street Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $118 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $165 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $29 million of effectively settled liabilities the Company owed to Oak Street Health from their pre-existing relationship.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values at the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	201
Investments	168
Accounts receivable	1,143
Other current assets	46
Property and equipment	180
Operating lease right-of-use assets	316
Goodwill	7,189
Intangible assets	4,233
Other long-term assets	7
Total assets acquired	13,483
Health care costs payable	1,098
Other current liabilities	443
Operating lease liabilities (current and long-term)	378
Debt (current and long-term)	1,028
Deferred income taxes	773
Other long-term liabilities	29
Total liabilities assumed	3,749
Noncontrolling interests	66
Total consideration transferred	$	9,668

The assessment of fair value is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The most significant open items included the accounting for income taxes and the accounting for contingencies as management is awaiting additional information to complete its assessment of these matters. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

Goodwill

Goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the health services industry, the assembled workforce acquired, expected revenue and medical cost synergies, as well as operating efficiencies and cost savings. The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	6,912
Pharmacy & Consumer Wellness	156
Health Care Benefits	121
Total goodwill	$	7,189

The amount of goodwill deductible for income tax purposes was not material.

Intangible Assets

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Oak Street Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships (1)	$	3,620	19.9
Technology	143		3.0
Trademark (definite-lived)	470		8.0
Total intangible assets	$	4,233	18.0

_____________________________________________

(1) The substantial majority of the customer relationships intangible asset relates to relationships with health plan payers.

Deferred Income Taxes

The purchase price allocation includes net deferred tax liabilities of $773 million, primarily related to deferred tax liabilities established on the identifiable acquired intangible assets.

Consolidated Results of Operations

During the period from the Oak Street Health Acquisition Date through September 30, 2023, the Company’s consolidated results of operations included $1.3 billion of revenues and $304 million of operating losses, including $121 million of intangible asset amortization and $51 million of stock-based compensation, associated with the results of operations of Oak Street Health.

During the nine months ended September 30, 2023, the Company incurred transaction costs of $77 million associated with the Oak Street Health Acquisition, which were recorded in operating expenses.

Signify Health Acquisition

On March 29, 2023 (the “Signify Health Acquisition Date”), the Company acquired 100% of the outstanding shares and voting interest of Signify Health for cash (“Signify Health Acquisition”). Under the terms of the merger agreement, Signify Health stockholders received $30.50 per share in cash. The Company financed the transaction with cash on hand, which included approximately $6 billion of proceeds from the issuance of senior unsecured notes in February 2023. Signify Health is a leader in health risk assessments, value-based care and provider enablement services. Signify Health is included within the Health Services segment. The Company acquired Signify Health to advance its health care services strategy, growth in value-based care and new product offerings for other payers.

The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	7,450
Fair value of replacement equity awards for pre-combination services (3.2 million shares) (1)	14
Effective settlement of pre-existing relationship (2)	(111)
Total consideration transferred	$	7,353

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Signify Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $14 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $167 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $111 million of effectively settled liabilities the Company owed to Signify Health from their pre-existing relationship.

The transaction has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired and liabilities assumed to be recognized at their fair values at the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	376
Accounts receivable	190
Other current assets (including restricted cash of $28)	147
Property and equipment	25
Goodwill	5,922
Intangible assets	1,920
Other long-term assets	23
Total assets acquired	8,603
Other current liabilities	606
Debt (current and long-term)	346
Deferred income taxes	272
Other long-term liabilities	26
Total liabilities assumed	1,250
Total consideration transferred	$	7,353

The assessment of fair value is preliminary and is based on information that was available to management at the time the unaudited condensed consolidated financial statements were prepared. The most significant open items included the estimation of certain contract assets and contract liabilities, the accounting for income taxes and the accounting for contingencies as management is awaiting additional information to complete its assessment of these matters. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The finalization of the Company’s purchase accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

Goodwill

Goodwill represents future economic benefits expected to arise from the Company’s expanded presence in the health services industry, the assembled workforce acquired, expected revenue and medical cost synergies, as well as operating efficiencies and cost savings. The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	3,419
Health Care Benefits	2,473
Pharmacy & Consumer Wellness	30
Total goodwill	$	5,922

Approximately $1.7 billion of goodwill is deductible for income tax purposes.

Intangible Assets

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Signify Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships	$	1,810	16.7
Technology	50		3.0
Trademark (definite-lived)	60		5.0
Total intangible assets	$	1,920	16.0

Deferred Income Taxes

The purchase price allocation includes net deferred tax liabilities of $272 million, primarily related to deferred tax liabilities established on the identifiable acquired intangible assets.

Consolidated Results of Operations

During the period from the Signify Health Acquisition Date through September 30, 2023, the Company’s consolidated results of operations included $528 million of revenues associated with the results of operations of Signify Health, while its impact on consolidated operating income was not material.

During the nine months ended September 30, 2023, the Company incurred transaction costs of $37 million associated with the Signify Health Acquisition, which were recorded in operating expenses.

Assets Held For Sale

The Company continually evaluates its portfolio for non-strategic assets. During 2022, the Company determined that its Omnicare® long-term care business (“LTC business”), which is included within the Pharmacy & Consumer Wellness segment, was no longer a strategic asset and during the third quarter of 2022 committed to a plan to sell the LTC business. At that time, the LTC business met the criteria to be classified as held for sale.

During 2022, the carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell. Accordingly, the Company recorded total losses on assets held for sale of $2.5 billion during the year ended December 31, 2022. During the first quarter of 2023, a loss on assets held for sale of $349 million was recorded to write-down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. The loss on assets held for sale represents the write-down of long-lived assets and was recorded in the Company’s unaudited condensed consolidated statement of operations within the Pharmacy & Consumer Wellness segment.

While the Company continues to evaluate strategic alternatives for the LTC business, during the third quarter of 2023, the Company determined it was no longer probable that a sale would be completed in the near term. At that time, the Company concluded that the LTC business no longer met the criteria to be classified as held for sale. Accordingly, the assets and liabilities associated with this business have been reclassified to held and used at their respective fair values on the unaudited condensed consolidated balance sheet as of September 30, 2023.

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Restructuring Program

9 Months Ended

Sep. 30, 2023

Restructuring and Related Activities [Abstract]

Restructuring Program

Restructuring Program

During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives, including providing clinical trials services. In connection with the restructuring plan, during the second quarter of 2023, the Company recorded a $496 million pre-tax restructuring charge, comprised of $344 million of severance and employee-related costs associated with corporate workforce optimization and $152 million of asset impairment charges, and during the third quarter of 2023, the Company recorded an $11 million stock-based compensation charge associated with the impacted employees. These restructuring charges are reflected in the Corporate/Other segment. The severance and employee-related costs were recorded in accrued expenses and the asset impairments were recorded as a reduction of property and equipment, net, while the stock-based compensation charge was reflected as an adjustment to common stock and capital surplus on the unaudited condensed consolidated balance sheet. During the three months ended September 30, 2023, the Company made payments of $58 million related to the severance and employee-related costs.

Severance and employee-related costs consist primarily of salary continuation benefits, prorated annual incentive compensation, continuation of health care benefits and outplacement services. Severance and employee-related benefits are determined pursuant to the Company’s written severance plans and are recognized when the benefits are determined to be probable of being paid and are reasonably estimable.

The restructuring program is expected to be substantially complete by the end of 2023.

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Investments

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Investments

Investments

Total investments at September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023						December 31, 2022
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	3,027	$	17,374	$	20,401	$	2,718	$	17,562	$	20,280
Mortgage loans	116		1,157		1,273		55		989		1,044
Other investments	2		3,136		3,138		5		2,562		2,567
Total investments (1)	$	3,145	$	21,667	$	24,812	$	2,778	$	21,113	$	23,891

_____________________________________________

(1)Includes long-term investments of $17 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Debt Securities

Debt securities available for sale at September 30, 2023 and December 31, 2022 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2023
Debt securities:
U.S. government securities	$	2,092	$	—	$	2,092	$	—	$	(171)	$	1,921
States, municipalities and political subdivisions	2,277		—		2,277		1		(151)		2,127
U.S. corporate securities	10,062		—		10,062		12		(879)		9,195
Foreign securities	2,621		(1)		2,620		9		(233)		2,396
Residential mortgage-backed securities	833		—		833		—		(103)		730
Commercial mortgage-backed securities	1,128		—		1,128		—		(151)		977
Other asset-backed securities	3,069		—		3,069		13		(46)		3,036
Redeemable preferred securities	20		—		20		—		(1)		19
Total debt securities (1)	$	22,102	$	(1)	$	22,101	$	35	$	(1,735)	$	20,401
December 31, 2022
Debt securities:
U.S. government securities	$	2,074	$	—	$	2,074	$	—	$	(182)	$	1,892
States, municipalities and political subdivisions	2,393		—		2,393		8		(129)		2,272
U.S. corporate securities	9,838		(3)		9,835		26		(903)		8,958
Foreign securities	2,780		(1)		2,779		15		(244)		2,550
Residential mortgage-backed securities	845		—		845		1		(89)		757
Commercial mortgage-backed securities	1,172		—		1,172		1		(155)		1,018
Other asset-backed securities	2,940		—		2,940		6		(136)		2,810
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,067	$	(4)	$	22,063	$	57	$	(1,840)	$	20,280

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2023, debt securities with a fair value of $560 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $63 million and at December 31, 2022, debt securities with a fair value of $609 million, gross unrealized capital gains of $3 million and gross unrealized capital losses of $59 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive loss.

The net amortized cost and fair value of debt securities at September 30, 2023 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	$	1,273	$	1,254
One year through five years	7,413		6,995
After five years through ten years	4,279		3,891
Greater than ten years	4,106		3,518
Residential mortgage-backed securities	833		730
Commercial mortgage-backed securities	1,128		977
Other asset-backed securities	3,069		3,036
Total	$	22,101	$	20,401

Summarized below are the debt securities the Company held at September 30, 2023 and December 31, 2022 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
September 30, 2023
Debt securities:
U.S. government securities	143	$	393	$	12	370	$	1,250	$	159	513	$	1,643	$	171
States, municipalities and political subdivisions	614	1,003		36		634	939		115		1,248	1,942		151
U.S. corporate securities	2,619	2,903		127		4,427	5,688		752		7,046	8,591		879
Foreign securities	565	749		28		1,064	1,473		205		1,629	2,222		233
Residential mortgage-backed securities	88	234		9		460	496		94		548	730		103
Commercial mortgage-backed securities	83	207		11		340	668		140		423	875		151
Other asset-backed securities	399	1,010		11		597	1,144		35		996	2,154		46
Redeemable preferred securities	4	2		—		8	17		1		12	19		1
Total debt securities	4,515	$	6,501	$	234	7,900	$	11,675	$	1,501	12,415	$	18,176	$	1,735
December 31, 2022
Debt securities:
U.S. government securities	519	$	1,620	$	164	35	$	191	$	18	554	$	1,811	$	182
States, municipalities and political subdivisions	859	1,370		95		196	322		34		1,055	1,692		129
U.S. corporate securities	5,193	6,537		622		1,479	1,822		281		6,672	8,359		903
Foreign securities	1,168	1,715		147		403	592		97		1,571	2,307		244
Residential mortgage-backed securities	452	464		39		91	257		50		543	721		89
Commercial mortgage-backed securities	288	611		69		187	381		86		475	992		155
Other asset-backed securities	1,008	1,893		88		391	694		48		1,399	2,587		136
Redeemable preferred securities	13	18		2		2	5		—		15	23		2
Total debt securities	9,500	$	14,228	$	1,226	2,784	$	4,264	$	614	12,284	$	18,492	$	1,840

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 September 30, 2023 were generally caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. As of September 30, 2023, 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 September 30, 2023 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	$	16	$	1	$	1,032	$	19	$	1,048	$	20
One year through five years	151		7		6,356		416		6,507		423
After five years through ten years	113		14		3,439		381		3,552		395
Greater than ten years	206		37		3,104		560		3,310		597
Residential mortgage-backed securities	8		1		722		102		730		103
Commercial mortgage-backed securities	16		2		859		149		875		151
Other asset-backed securities	18		1		2,136		45		2,154		46
Total	$	528	$	63	$	17,648	$	1,672	$	18,176	$	1,735

Mortgage Loans

The Company’s mortgage loans are collateralized by commercial real estate. During the three and nine months ended September 30, 2023 and 2022, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
New mortgage loans	$	63	$	125	$	286	$	305
Mortgage loans fully repaid	17		62		34		136
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 September 30, 2023 and December 31, 2022, 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	2023		2022		2021		2020		2019		Prior		Total
September 30, 2023
1	$	—	$	—	$	—	$	—	$	—	$	12	$	12
2 to 4	259		344		239		35		11		347		1,235
5 and 6	—		—		6		—		—		20		26
7	—		—		—		—		—		—		—
Total	$	259	$	344	$	245	$	35	$	11	$	379	$	1,273
December 31, 2022
1			$	—	$	—	$	—	$	—	$	15	$	15
2 to 4			326		247		36		11		402		1,022
5 and 6			—		—		—		—		7		7
7			—		—		—		—		—		—
Total			$	326	$	247	$	36	$	11	$	424	$	1,044

Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Debt securities	$	217	$	174	$	612	$	510
Mortgage loans	16		14		43		38
Other investments	199		134		609		279
Gross investment income	432		322		1,264		827
Investment expenses	(13)		(11)		(34)		(29)
Net investment income (excluding net realized capital losses)	419		311		1,230		798
Net realized capital losses (1)	(142)		(110)		(345)		(283)
Net investment income (2)	$	277	$	201	$	885	$	515

_____________________________________________

(1)Net realized capital losses include yield-related impairment losses on debt securities of $47 million in the three months ended September 30, 2023. There were no credit-related losses on debt securities in the three months ended September 30, 2023. Net realized capital losses include yield-related impairment losses on debt securities of $108 million and are net of the reversal of previously recorded credit-related impairment losses on debt securities of $3 million in the nine months ended September 30, 2023. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $73 million and $1 million, respectively, in the three months ended September 30, 2022. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $121 million and $17 million, respectively, in the nine months ended September 30, 2022.

(2)Net investment income includes $8 million and $25 million for the three and nine months ended September 30, 2023, respectively, and $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, 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 and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Proceeds from sales	$	1,171	$	593	$	3,503	$	3,556
Gross realized capital gains	2		3		7		20
Gross realized capital losses	110		28		294		135

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Fair Value

9 Months Ended

Sep. 30, 2023

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 Exhibit 99.1 to the May 2023 8-K.

There were no financial liabilities measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2023 or December 31, 2022. Financial assets measured at fair value on a recurring basis on the unaudited condensed consolidated balance sheets at September 30, 2023 and December 31, 2022 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2023
Cash and cash equivalents	$	5,159	$	7,884	$	—	$	13,043
Debt securities:
U.S. government securities	1,899		22		—		1,921
States, municipalities and political subdivisions	—		2,127		—		2,127
U.S. corporate securities	—		9,166		29		9,195
Foreign securities	—		2,388		8		2,396
Residential mortgage-backed securities	—		730		—		730
Commercial mortgage-backed securities	—		977		—		977
Other asset-backed securities	—		3,036		—		3,036
Redeemable preferred securities	—		19		—		19
Total debt securities	1,899		18,465		37		20,401
Equity securities	187		—		83		270
Total	$	7,245	$	26,349	$	120	$	33,714
December 31, 2022
Cash and cash equivalents (1)	$	6,902	$	6,049	$	—	$	12,951
Debt securities:
U.S. government securities	1,860		32		—		1,892
States, municipalities and political subdivisions	—		2,272		—		2,272
U.S. corporate securities	—		8,897		61		8,958
Foreign securities	—		2,542		8		2,550
Residential mortgage-backed securities	—		757		—		757
Commercial mortgage-backed securities	—		1,018		—		1,018
Other asset-backed securities	—		2,810		—		2,810
Redeemable preferred securities	—		23		—		23
Total debt securities	1,860		18,351		69		20,280
Equity securities	116		—		60		176
Total	$	8,878	$	24,400	$	129	$	33,407

_____________________________________________

(1)Includes cash and cash equivalents of $6 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

During the three months ended September 30, 2023 and 2022 there were no transfers into or out of Level 3. During the nine months ended September 30, 2023 and 2022, there were $42 million and $29 million, respectively, of transfers out of Level 3.

The carrying value and estimated fair value classified by level of fair value hierarchy for financial instruments carried on the unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2023 and December 31, 2022 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2023
Assets:
Mortgage loans	$	1,273	$	—	$	—	$	1,203	$	1,203
Equity securities (1)	519		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	1		—		—		1		1
Without a fixed maturity	324		—		—		277		277
Long-term debt	61,914		54,807		—		—		54,807
December 31, 2022
Assets:
Mortgage loans	$	1,044	$	—	$	—	$	978	$	978
Equity securities (1)	411		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	3		—		—		3		3
Without a fixed maturity	332		—		—		305		305
Long-term debt (2)	52,257		47,653		—		—		47,653

_____________________________________________

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

(2)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

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 September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023								December 31, 2022
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1	$	152	$	—	$	153	$	2	$	154	$	—	$	156
Debt securities	667		1,896		—		2,563		712		1,965		—		2,677
Common/collective trusts	—		443		—		443		—		480		—		480
Total (1)	$	668	$	2,491	$	—	$	3,159	$	714	$	2,599	$	—	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

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Health Care Costs Payable

9 Months Ended

Sep. 30, 2023

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 nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Health care costs payable, beginning of the period	$	10,142	$	8,678
Less: Reinsurance recoverables	5		8
Less: Impact of discount rate on long-duration insurance reserves (1)	8		—
Health care costs payable, beginning of the period, net	10,129		8,670
Acquisitions, net	1,098		—
Add: Components of incurred health care costs
Current year	64,183		53,216
Prior years	(679)		(670)
Total incurred health care costs (2)	63,504		52,546
Less: Claims paid
Current year	52,952		43,632
Prior years	9,207		7,468
Total claims paid	62,159		51,100
Add: Premium deficiency reserve	—		5
Health care costs payable, end of the period, net	12,572		10,121
Add: Reinsurance recoverables	4		5
Add: Impact of discount rate on long-duration insurance reserves (1)	(26)		5
Health care costs payable, end of the period	$	12,550	$	10,131

_____________________________________________

(1)Reflects the difference between the current discount rate and the locked-in discount rate on long-duration insurance reserves which is recorded within accumulated other comprehensive loss on the unaudited condensed consolidated balance sheets. Refer to Note 1 ‘‘Significant Accounting Policies’’ for further information related to the adoption of the long-duration insurance contracts accounting standard.

(2)Total incurred health care costs for the nine months ended September 30, 2023 and 2022 in the table above exclude $62 million and $59 million, respectively, of health care costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and $163 million and $204 million, respectively, of health care costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets. The incurred health care costs for the nine months ended September 30, 2022 also exclude $5 million for a premium deficiency reserve related to the Company’s Medicaid products.

The Company’s estimates of prior years’ health care costs payable decreased by $679 million and $670 million, respectively, in the nine months ended September 30, 2023 and 2022, 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 September 30, 2023, 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 $8.9 billion. Substantially all of the Company’s liabilities for IBNR plus expected development on reported claims at September 30, 2023 related to the current year.

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Other Insurance Liabilities and Separate Accounts

9 Months Ended

Sep. 30, 2023

Insurance [Abstract]

Other Insurance Liabilities and Separate Accounts

Other Insurance Liabilities and Separate Accounts

Future Policy Benefits

The following tables show the components of the change in the liability for future policy benefits, which is included in other insurance liabilities and other long-term insurance liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30, 2023
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of period - current discount rate			$	300
Beginning liability for future policy benefits at original (locked-in) discount rate			$	302
Effect of changes in cash flow assumptions			—
Effect of actual variances from expected experience			7
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			309
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(29)
Ending liability for future policy benefits at original (locked-in) discount rate			291
Effect of changes in discount rate assumptions			(12)
Liability for future policy benefits, end of period - current discount rate			$	279
Present value of expected future policy benefits
Liability for future policy benefits, beginning of period - current discount rate	$	2,253	$	1,566
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,425	$	1,613
Effect of changes in cash flow assumptions	—		—
Effect of actual variances from expected experience	1		9
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,426		1,622
Issuances	8		—
Interest accrual (using locked-in discount rate)	74		61
Benefit payments (actual)	(210)		(53)
Ending liability for future policy benefits at original (locked-in) discount rate	2,298		1,630
Effect of changes in discount rate assumptions	(247)		(146)
Liability for future policy benefits, end of period - current discount rate	$	2,051	$	1,484
Net liability for future policy benefits	$	2,051	$	1,205
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,051	$	1,205

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

	Nine Months Ended September 30, 2022
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of the period - current discount rate			$	389
Beginning liability for future policy benefits at original (locked-in) discount rate			$	323
Effect of changes in cash flow assumptions			(14)
Effect of actual variances from expected experience			13
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			322
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(30)
Ending liability for future policy benefits at original (locked-in) discount rate			303
Effect of changes in discount rate assumptions			(5)
Liability for future policy benefits, end of the period - current discount rate			$	298
Present value of expected future policy benefits
Liability for future policy benefits, beginning of the period - current discount rate	$	3,034	$	1,991
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,650	$	1,480
Effect of changes in cash flow assumptions	—		99
Effect of actual variances from expected experience	(26)		15
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,624		1,594
Issuances	4		—
Interest accrual (using locked-in discount rate)	80		60
Benefit payments (actual)	(220)		(48)
Ending liability for future policy benefits at original (locked-in) discount rate	2,488		1,606
Effect of changes in discount rate assumptions	(205)		(78)
Liability for future policy benefits, end of the period - current discount rate	$	2,283	$	1,528
Net liability for future policy benefits	$	2,283	$	1,230
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,283	$	1,230

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

The Company did not have any material differences between the actual experience and expected experience for the significant assumptions used in the computation of the liability for future policy benefits.

The amount of undiscounted expected gross premiums and expected future benefit payments for long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

In millions	September 30, 2023		September 30, 2022
Large case pensions
Expected future benefit payments	$	3,337	$	3,622
Expected gross premiums	—		—
Long-term care
Expected future benefit payments	$	3,237	$	3,269
Expected gross premiums	419		439

The weighted-average interest rate used in the measurement of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions
Interest accretion rate	4.20%	4.20%
Current discount rate	5.86%	5.42%
Long-term care
Interest accretion rate	5.11%	5.11%
Current discount rate	5.99%	5.65%

The weighted-average durations (in years) of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions	7.4	7.4
Long-term care	12.2	12.8

Policyholders’ Funds

The following table shows the components of the change in policyholders’ funds related to long-duration insurance contracts, which are included in policyholders’ funds and other long-term liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions, except weighted average crediting rate	2023		2022
Policyholders’ funds, beginning of the period	$	345	$	522
Deposits received	1		10
Policy charges	(2)		(1)
Surrenders and withdrawals	(23)		(27)
Interest credited	9		10
Change in net unrealized losses	(4)		(163)
Other	(23)		(18)
Policyholders’ funds, end of the period	$	303	$	333
Weighted average crediting rate	4.40%		4.80%
Net amount at risk	$	—	$	—
Cash surrender value	$	324	$	337

Separate Accounts

The following table shows the fair value of assets, by major investment category, supporting Separate Accounts as of September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	153	$	156
Debt securities:
U.S. government securities	671		717
States, municipalities and political subdivisions	26		27
U.S. corporate securities	1,610		1,667
Foreign securities	198		201
Residential mortgage-backed securities	37		41
Commercial mortgage-backed securities	6		6
Other asset-backed securities	15		18
Total debt securities	2,563		2,677
Common/collective trusts	443		480
Total (1)	$	3,159	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

The following table shows the components of the change in Separate Accounts liabilities during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Separate Accounts liability, beginning of the period	$	3,228	$	5,087
Premiums and deposits	657		636
Surrenders and withdrawals	(7)		(576)
Benefit payments	(714)		(711)
Investment (earnings) losses	42		(1,057)
Net transfers from general account	4		7
Other	(10)		(68)
Separate Accounts liability, end of the period	$	3,200	$	3,318
Cash surrender value, end of the period	$	2,136	$	2,153

The Company did not recognize any gains or losses on assets transferred to Separate Accounts during the nine months ended September 30, 2023 and 2022.

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Borrowings

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Long-term debt
2.8% senior notes due June 2023	$	—	$	1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
5% senior notes due February 2026	1,500		—
0% convertible senior notes due March 2026	3		—
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
5% senior notes due January 2029	1,000		—
3.25% senior notes due August 2029	1,750		1,750
5.125% senior notes due February 2030	1,500		—
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
5.25% senior notes due January 2031	750		—
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
5.25% senior notes due February 2033	1,750		—
5.3% senior notes due June 2033	1,250		—
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
5.625% senior notes due February 2053	1,250		—
5.875% senior notes due June 2053	1,250		—

6% senior notes due June 2063	750		—
Finance lease liabilities	1,493		1,465
Other	309		314
Total debt principal	62,479		52,753
Debt premiums	190		200
Debt discounts and deferred financing costs	(755)		(696)
	61,914		52,257
Less:
Current portion of long-term debt	(2,132)		(1,778)
Long-term debt (1)	$	59,782	$	50,479

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Short-term Borrowings

Term Loan Agreement

On May 1, 2023, the Company entered into a 364-day $5.0 billion term loan agreement. The term loan agreement allows for borrowings at various rates that are dependent, in part, on the Company’s debt ratings. On May 2, 2023, the Company borrowed $5.0 billion at an interest rate of approximately 6.2% under the term loan agreement to fund a portion of the Oak Street Health acquisition purchase price. On June 2, 2023, the Company repaid the outstanding balance under the term loan agreement.

Long-term Borrowings

2023 Notes

On June 2, 2023, the Company issued $1.0 billion aggregate principal amount of 5.0% senior notes due January 2029, $750 million aggregate principal amount of 5.25% senior notes due January 2031, $1.25 billion aggregate principal amount of 5.3% senior notes due June 2033, $1.25 billion aggregate principal amount of 5.875% senior notes due June 2053 and $750 million aggregate principal amount of 6.0% senior notes due June 2063 for total proceeds of approximately $4.9 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used, along with cash on hand, to repay the outstanding balance under the term loan agreement described above.

On February 21, 2023, the Company issued $1.5 billion aggregate principal amount of 5.0% senior notes due February 2026, $1.5 billion aggregate principal amount of 5.125% senior notes due February 2030, $1.75 billion aggregate principal amount of 5.25% senior notes due February 2033 and $1.25 billion aggregate principal amount of 5.625% senior notes due February 2053 for total proceeds of approximately $6.0 billion, net of discounts and underwriting fees. The net proceeds of these offerings were used to fund general corporate purposes, including a portion of the Signify Health Acquisition purchase price.

Oak Street Health Convertible Notes

Prior to the Oak Street Health Acquisition, Oak Street Health held 0% convertible senior notes with an aggregate principal amount of $920 million (the “Convertible Notes”), which were assumed by the Company in connection with the Oak Street Health Acquisition. The Oak Street Health Acquisition constituted a fundamental change in the Convertible Notes giving the holders the right to require the Company to repurchase the Convertible Notes. The repurchase price was an amount in cash equal to 100% of the principal amount of the Convertible Notes. On May 31, 2023, the Company issued a notice of repurchase to the holders of the Convertible Notes. In connection with this notice, $917 million of the Convertible Notes were submitted for repurchase and settled on July 21, 2023, with $3 million remaining outstanding.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share Repurchases

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

In billions Authorization Date	Authorized		Remaining as of September 30, 2023
November 17, 2022 (“2022 Repurchase Program”)	$	10.0	$	10.0
December 9, 2021 (“2021 Repurchase Program”)	10.0		4.5

Each of the share Repurchase Programs was effective immediately and permit 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. Both the 2022 and 2021 Repurchase Programs can be modified or terminated by the Board at any time.

During the nine months ended September 30, 2023 and 2022, the Company repurchased an aggregate of 22.8 million shares of common stock for approximately $2.0 billion and an aggregate of 19.1 million shares of common stock for approximately $2.0 billion, respectively, both pursuant to the 2021 Repurchase Program. This activity includes the share repurchases under the ASR transactions described below.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $2.0 billion fixed dollar ASR with Citibank, N.A.. Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $2.0 billion notional amount of the ASR or approximately 17.4 million shares at a price of $92.19 per share, which were placed into treasury stock in January 2023. The ASR was accounted for as an initial treasury stock transaction for $1.6 billion and a forward contract for $0.4 billion. The forward contract was classified as an equity instrument and was recorded within capital surplus. In February 2023, the Company received approximately 5.4 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $2.0 billion notional amount of the ASR, thereby concluding the ASR. These shares were placed into treasury and the forward contract was reclassified from capital surplus to treasury stock in February 2023.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $1.5 billion fixed dollar ASR with Barclays Bank PLC. 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 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 $0.605 and $0.55 per share in the three months ended September 30, 2023 and 2022, respectively. Cash dividends declared by the Board were $1.815 and $1.65 per share in the nine months ended September 30, 2023 and 2022, 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 (Loss)

9 Months Ended

Sep. 30, 2023

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

Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss)

Shareholders’ equity included the following activity in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,113)	$	(1,199)	$	(1,519)	$	778
Adoption of new accounting standard ($0, $0, $0, $26 pretax) (1)	—		—		—		20
Other comprehensive loss before reclassifications ($(475), $(814), $(310), $(3,361) pretax)	(478)		(725)		(313)		(2,852)
Amounts reclassified from accumulated other comprehensive income (loss) ($157, $99, $398, $253 pretax) (2)	157		88		398		218
Other comprehensive income (loss)	(321)		(637)		85		(2,634)
End of period balance	(1,434)		(1,836)		(1,434)		(1,836)
Change in discount rate on long-duration insurance reserves:
Beginning of period balance	205		28		219		—
Adoption of new accounting standard ($0, $0, $0, $(838) pretax) (1)	—		—		—		(651)
Other comprehensive income before reclassifications ($233, $321, $210, $1,195 pretax)	181		250		167		929
Other comprehensive income	181		250		167		929
End of period balance	386		278		386		278
Foreign currency translation adjustments:
Beginning of period balance	1		2		—		—
Other comprehensive loss before reclassifications	(2)		(7)		(1)		(5)
Other comprehensive loss	(2)		(7)		(1)		(5)
End of period balance	(1)		(5)		(1)		(5)
Net cash flow hedges:
Beginning of period balance	252		234		239		222
Other comprehensive income before reclassifications ($0, $13, $25, $37 pretax)	—		10		19		28
Amounts reclassified from accumulated other comprehensive income ($(5), $(2), $(13), $(10) pretax) (3)	(4)		(2)		(10)		(8)
Other comprehensive income (loss)	(4)		8		9		20
End of period balance	248		242		248		242
Pension and other postretirement benefits:
Beginning of period balance	(203)		(34)		(203)		(35)
Amounts reclassified from accumulated other comprehensive loss ($0, $1, $0, $2 pretax) (4)	—		1		—		2
Other comprehensive income	—		1		—		2
End of period balance	(203)		(33)		(203)		(33)
Total beginning of period accumulated other comprehensive income (loss)	(858)		(969)		(1,264)		965
Adoption of new accounting standard (1)	—		—		—		(631)
Total other comprehensive income (loss)	(146)		(385)		260		(1,688)
Total end of period accumulated other comprehensive loss	$	(1,004)	$	(1,354)	$	(1,004)	$	(1,354)

_____________________________________________

(1)Reflects the adoption of ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the nine months ended September 30, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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

(3)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 $15 million net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(4)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Earnings (loss) per share is computed using the treasury stock method. For periods in which the Company reports net income, diluted earnings per share is determined using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. Stock options and stock appreciation rights to purchase 9 million and 7 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2023, respectively, because their exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive. For the same reason, stock options and stock appreciation rights to purchase 4 million shares of common stock were outstanding, but were excluded from the calculation of diluted earnings (loss) per share for each of the three and nine-month periods ended September 30, 2022. In addition, due to the net loss attributable to CVS Health in the three months ended September 30, 2022, 8 million potentially dilutive common equivalent shares were excluded from the calculation of diluted loss per share, as the impact of these shares was antidilutive for that period.

The following is a reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2023		2022		2023		2022
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	2,261	$	(3,406)	$	6,298	$	1,977
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,287		1,315		1,284		1,313
Restricted stock units and performance stock units	2		—		3		6
Stock options and stock appreciation rights	1		—		2		5
Weighted average shares, diluted	1,290		1,315		1,289		1,324
Earnings (loss) per share:
Basic	$	1.76	$	(2.59)	$	4.90	$	1.51
Diluted	$	1.75	$	(2.59)	$	4.88	$	1.49

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

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. As of September 30, 2023, the Company guaranteed 63 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 2035.

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 the coronavirus disease 2019 (“COVID-19”) pandemic had 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 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”), the U.S. Federal Trade Commission (the “FTC”) 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. Other than the controlled substances litigation accruals described below, none of the Company’s accruals for outstanding legal matters are material individually or in the aggregate to the Company’s unaudited condensed consolidated balance sheets.

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 is 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 and government payors, and are based on different legal theories. Some of these cases are brought as putative class actions, and in some instances, classes have been certified. In October 2022, one of the litigating shareholders made a litigation demand to the Board related to these and other issues after his amended derivative complaint was dismissed for failing to demonstrate demand futility. 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 state Attorneys 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 majority of these cases have now been transferred into a multi-district litigation in the U.S. District Court for the District of New Jersey. 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, the FTC and 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 2022, the Company agreed to a formal settlement agreement, the financial amounts of which were agreed to in principle in October 2022, with a leadership group of a number of state Attorneys General and the Plaintiffs’ Executive Committee. Upon finalization, the agreement resolves substantially all opioid claims against Company entities by participating states and political subdivisions but not private plaintiffs, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The maximum amount payable by the Company under the settlement is approximately $4.3 billion in opioid remediation and $625 million in attorneys’ fees and costs and additional remediation. The amounts are payable over 10 years, beginning in 2023. The agreement also contains injunctive terms relating to the dispensing of opioid medications. The settlement agreement is available at nationalopioidsettlement.com.

Upon reaching an agreement in principle in October 2022, the Company concluded that settlement of opioid claims by governmental entities and tribes was probable, and the loss related thereto could be reasonably estimated. As a result of that conclusion, and its assessment of certain other opioid-related claims including those for which the Company reached agreement in August and September 2022, the Company recorded pre-tax charges of $5.3 billion during the year ended December 31, 2022. Settlement accruals expected to be paid within twelve months from the balance sheet date are classified as accrued expenses on the unaudited condensed consolidated balance sheets and settlement accruals expected to be paid greater than

twelve months from the balance sheet date are classified as other long-term liabilities on the unaudited condensed consolidated balance sheets.

In June 2023, the Company elected to move forward with a final settlement agreement, the financial amounts of which were agreed to in principle in October 2022, to resolve claims brought by participating states and political subdivisions such as counties, cities, and towns, but not by private plaintiffs, alleging claims beginning as far back as the early 2000s generally concerning the impacts of widespread prescription opioid abuse. The agreement became effective in June 2023.

Forty-five states, the District of Columbia, and all eligible United States territories are participating in the settlement. A high percentage of eligible subdivisions within the participating states also have elected to join the settlement. The Company has separately entered into settlement agreements with four states – Florida, West Virginia, New Mexico, and Nevada – and a high percentage of eligible subdivisions within those states also have elected to participate.

The final settlement agreement contains certain contingencies related to payment obligations. Because these contingencies are inherently unpredictable, the assessment requires judgments about future events. The amount of ultimate loss may differ from the amount accrued by the Company.

The State of Maryland has not elected to participate in the settlement. Subdivisions within the State of Maryland thus may not participate in the settlement. The State of Maryland has issued a civil subpoena for information from the Company.

In December 2022, the Company also agreed to a formal settlement agreement with a leadership group representing tribes throughout the United States. The agreement resolves substantially all opioid claims against Company entities by such tribes. The maximum amount payable by the Company under the settlement is $113 million in opioid remediation and $16 million in attorneys’ fees and costs, payable over 10 years. The Company also entered into a separate settlement with the Cherokee Nation.

These settlements resolve a majority of the cases against the Company that had been pending in the consolidated multidistrict litigation captioned In re National Prescription Opiate Litigation (MDL No. 2804) pending in the U.S. District Court for the Northern District of Ohio. However, certain opioid-related cases against the Company remain pending in the multidistrict litigation and in various state courts, including those brought by non-participating subdivisions and private parties such as hospitals and third-party payors. The Company continues to defend those cases.

In November 2021, the Company was among the chain pharmacies found liable by a jury in a trial in federal court in Ohio; in August 2022, the court issued a judgment jointly against the three defendants in the amount of $651 million to be paid over 15 years and also ordered certain injunctive relief. The Company is appealing the judgment and has not accrued a liability for this matter.

Because of the many uncertainties associated with any settlement arrangement or other resolution of opioid-related litigation matters, and because the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time. The outcome of these legal matters could have a material effect on the Company’s business, financial condition, operating results and/or cash flows.

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. The DOJ subsequently served additional DEA administrative subpoenas relating to controlled substances. The DOJ also served the Company with additional CIDs relating to controlled substances. 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.

U.S. ex rel. Gill et al. v. CVS Health Corp. et al. (U.S. District Court for the Northern District of Illinois). In July 2022, the Delaware Attorney General’s Office moved for partial intervention as to allegations under the Delaware false claims act related to not escheating alleged overpayments in this previously sealed qui tam case. The federal government and the remaining states declined to intervene on other additional theories in the relator’s complaint. The Company is defending itself against all of the 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.

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 (including COVID-19 testing) and/or otherwise allege that the Company failed to timely or appropriately pay or administer claims and benefits (including the Company’s post payment audit and collection practices). 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 claims payments, 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, in the “Notice of Final Payment Error Calculation for Part C Medicare Advantage Risk Adjustment Validation Data (RADV) Contract-Level Audits,” CMS revised its audit methodology for RADV contract-level audits to determine refunds payable by Medicare Advantage plans for contract year 2011 and forward. Under the revised methodology, among other things, CMS announced extrapolation of the error rate identified in the audit sample along with the application of a process to account for errors in the government’s traditional fee-for-service Medicare program (“FFS Adjuster”). For contract years prior to 2011, CMS did not extrapolate sample error rates to the entire contract, nor did CMS propose to apply a FFS adjuster. By applying the FFS Adjuster, Medicare Advantage organizations would have been liable for repayments only to the extent that their extrapolated payment errors exceeded the error rate in Original Medicare, which could have impacted the extrapolated repayments to which Medicare Advantage organizations are subject. This revised contract-level audit methodology increased

the Company’s exposure to premium refunds to CMS based on incomplete medical records maintained by providers. In the RADV audit methodology CMS used from 2011-2013, CMS selected only a few of the Company’s Medicare Advantage contracts for various contract years for contract-level RADV audits. In October 2018, CMS in the proposed rule (“Proposed Rule”) announced a new methodology for RADV audits targeting certain health conditions and members with many diagnostic conditions along with extrapolation for the error rates identified without use of a FFS Adjuster. While the rule was under proposal, CMS initiated contract-level RADV audits for the years 2014 and 2015 with this new RADV methodology without a final rule.

On January 30, 2023, CMS released the final rule (“RADV Audit Rule”), announcing it may use extrapolation for payment years 2018 forward, for both RADV audits and OIG audits, and eliminated the application of a FFS Adjuster in Part C contract-level RADV audits of Medicare Advantage organizations. In the RADV Audit Rule, CMS indicated that it will use more than one audit methodology going forward and indicated CMS will audit contracts it believes are at the highest risk for overpayments based on its statistical modeling, citing a 2016 Governmental Accountability Office report that recommended selection of contract-level RADV audits with a focus on contracts likely to have high rates of improper payment, the highest coding intensity scores, and contracts with high levels of unsupported diagnoses from prior RADV audits.

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 for years prior to 2018 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 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.

The RADV Audit Rule does not apply to the CMS Part C Improper Payment Measures audits nor the HHS-RADV programs.

Medicare and Medicaid Litigation and Investigations

The Company has received CIDs from the Civil Division of the DOJ in connection with investigations of the Company’s identification and/or submission of diagnosis codes related to risk adjustment payments, including patient chart review processes, under Parts C and D of the Medicare program. The Company is cooperating with the government and providing documents and information in response to these CIDs.

In May 2017, the Company received a CID from the U.S. Attorney’s Office for the Southern District of New York 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.

In November 2021, prior to its acquisition by the Company, Oak Street Health received a CID from the DOJ in connection with an investigation of possible false claims submitted to Medicare related to Oak Street Health’s relationships with third-party marketing agents and Oak Street Health’s provision of free transportation to federal health care beneficiaries. The Company has been cooperating with the government and has provided documents and information in response to the CID.

In January 2022, the U.S. Attorney’s Office for the District of Massachusetts issued a subpoena to Aetna Life Insurance Company seeking, among other things, information in connection with its relationship with certain brokers, and the Company may receive similar inquiries in the future. The Company is cooperating with the subpoena.

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. Since filing, several of the cases have been consolidated, and two have resolved, including the first-filed federal case, City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et al. (formerly known as Anarkat), the dismissal of which the First Circuit affirmed in August 2022. The Company and its current and former officers and directors are defending themselves against remaining claims. The Company

has moved to dismiss the amended complaint in In re CVS Health Corp. Securities Act Litigation (formerly known as Waterford). In In re CVS Health Corp. Securities Litigation (formerly known as City of Warren and Freundlich), the court granted the Company’s motion to dismiss in February 2023 and the plaintiffs have filed a notice of appeal.

Beginning in December 2021, the Company has received three demands for inspection of books and records pursuant to Delaware Corporation Law Section 220, as well as a derivative complaint (Vladimir Gusinsky Revocable Trust v. Lynch, et al.) that was filed in January 2023. The demands and the complaint purport to be related to potential breaches of fiduciary duties by the Board in relation to certain matters concerning opioids. The Company and its current and former officers and directors are defending themselves against these matters.

In January 2022, a shareholder class action complaint was filed in the Northern District of Illinois, Allison v. Oak Street Health, Inc., et al. Defendants include Oak Street Health and certain of its pre-acquisition officers and directors. The putative plaintiffs assert causes of action under various securities laws premised on allegations that defendants made omissions and misrepresentations to investors relating to marketing conduct they allege may violate the False Claims Act. The Company and the individual defendants are defending themselves against these claims.

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, discrimination 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

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company has three operating segments, Health Care Benefits, Health Services and Pharmacy & Consumer Wellness, as well as a Corporate/Other segment. The Company’s segments maintain separate financial information, and 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. Adjusted operating income is defined as operating income (loss) (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. Effective for the first quarter of 2023, adjusted operating income also excludes the impact of net realized capital gains or losses. See the reconciliations of consolidated operating income (loss) (GAAP measure) to consolidated adjusted operating income below for further context regarding the items excluded from operating income (loss) 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.

Segment financial information for the three and nine months ended September 30, 2022 has been revised to conform with current period presentation for the following items:

•The realignment of the Company’s segments to correspond with changes made to its operating model as described in Note 1 “Significant Accounting Policies,” including the discontinuance of the former Maintenance Choice segment reporting practice as described in Note (1) of the table included on the next page.

•The impact of the adoption of the long-duration insurance accounting standard, which the Company adopted on January 1, 2023 using a modified retrospective transition method, as described in Note 1 “Significant Accounting Policies.”

•The exclusion of the impact of net realized capital gains or losses from adjusted operating income, as described above.

The impact of these items on segment financial information for the three and nine months ended September 30, 2022 is reflected in the “Adjustments” lines of the table included on the next page.

	Three Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Adjustments	(15)		38		531		—		(554)		—
Total revenues, as adjusted	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Adjusted operating income (loss), as previously reported	$	1,544	$	1,877	$	1,398	$	(417)	$	(169)	$	4,233
Adjustments	97		(182)		3		29		169		116
Adjusted operating income (loss), as adjusted	$	1,641	$	1,695	$	1,401	$	(388)	$	—	$	4,349
	Nine Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Adjustments	(45)		318		1,471		—		(1,744)		—
Total revenues, as adjusted	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Adjusted operating income (loss), as previously reported	$	5,126	$	5,368	$	4,865	$	(1,277)	$	(556)	$	13,526
Adjustments	299		(372)		(181)		130		556		432
Adjusted operating income (loss), as adjusted	$	5,425	$	4,996	$	4,684	$	(1,147)	$	—	$	13,958

_____________________________________________

(1)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment. Prior to January 1, 2023, intersegment adjusted operating income eliminations occurred when members of the Health Services segment’s clients enrolled in Maintenance Choice elected to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurred, both the Health Services and Pharmacy & Consumer Wellness segments recorded the adjusted operating income on a stand-alone basis. Effective January 1, 2023, the adjusted operating income associated with such transactions is reported only in the Pharmacy & Consumer Wellness segment, therefore no adjusted operating income elimination is required. Prior period financial information has been recast to conform with current period presentation.

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

In millions	Health Care Benefits		Health  Services (1)		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2023
Revenues from external customers	$	26,089	$	44,064	$	19,321	$	13	$	—	$	89,487
Intersegment revenues	20		2,827		9,553		—		(12,400)		—
Net investment income (loss)	187		—		(2)		92		—		277
Total revenues	26,296		46,891		28,872		105		(12,400)		89,764
Adjusted operating income (loss)	1,536		1,878		1,389		(347)		—		4,456
September 30, 2022
Revenues from external customers	$	22,375	$	40,544	$	18,007	$	32	$	—	$	80,958
Intersegment revenues	20		2,710		9,240		—		(11,970)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,496		43,254		27,237		142		(11,970)		81,159
Adjusted operating income (loss)	1,641		1,695		1,401		(388)		—		4,349
Nine Months Ended
September 30, 2023
Revenues from external customers	$	78,302	$	127,907	$	56,826	$	43	$	—	$	263,078
Intersegment revenues	62		9,790		28,756		—		(38,608)		—
Net investment income (loss)	556		—		(4)		333		—		885
Total revenues	78,920		137,697		85,578		376		(38,608)		263,963
Adjusted operating income (loss)	4,901		5,452		3,936		(982)		—		13,307
September 30, 2022
Revenues from external customers	$	67,993	$	116,801	$	53,215	$	97	$	—	$	238,106
Intersegment revenues	60		9,006		26,710		—		(35,776)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,331		125,807		79,881		378		(35,776)		238,621
Adjusted operating income (loss)	5,425		4,996		4,684		(1,147)		—		13,958

_____________________________________________

(1)Total revenues of the Health Services segment include approximately $3.2 billion and $2.9 billion of retail co-payments for the three months ended September 30, 2023 and 2022, respectively. Total revenues of the Health Services segment include approximately $10.7 billion and $9.8 billion of retail co-payments for the nine months ended September 30, 2023 and 2022, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment.

The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Operating income (loss) (GAAP measure)	$	3,690	$	(3,919)	$	10,370	$	4,295
Amortization of intangible assets (1)	509		458		1,396		1,380
Net realized capital losses (2)	142		110		345		283
Acquisition-related transaction and integration costs (3)	94		—		294		—
Restructuring charges (4)	11		—		507		—
Office real estate optimization charges (5)	10		—		46		—
Loss on assets held for sale (6)	—		2,480		349		2,521
Opioid litigation charges (7)	—		5,220		—		5,704
Gain on divestiture of subsidiary (8)	—		—		—		(225)
Adjusted operating income	$	4,456	$	4,349	$	13,307	$	13,958

_____________________________________________

(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)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in the unaudited condensed consolidated statements of operations in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do 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. Accordingly, the Company believes excluding net realized capital gains and losses 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.

(3)During the three and nine months ended September 30, 2023, the acquisition-related transaction and integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related transaction and integration costs are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(4)During the three months ended September 30, 2023, the restructuring charges are comprised of a stock-based compensation charge. During the nine months ended September 30, 2023, the restructuring charges also include severance and employee-related costs and asset impairment charges. During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives. The restructuring charges are reflected within the Corporate/Other segment.

(5)During the three and nine months ended September 30, 2023, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the planned reduction of corporate office real estate space in response to the Company’s new flexible work arrangement. The office real estate optimization charges are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Health Care Benefits, Health Services and Corporate/Other segments.

(6)During the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the Company’s LTC reporting unit within the Pharmacy & Consumer Wellness segment. During 2022, the Company determined that its LTC business was no longer a strategic asset and committed to a plan to sell it, at which time the LTC business met the criteria for held-for-sale accounting and its net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell, and, accordingly the Company recorded a loss on assets held for sale during the third quarter of 2022. During the first quarter of 2023, a loss on assets held for sale was recorded to write down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. As of September 30, 2023, the Company determined the LTC business no longer met the criteria for held-for-sale accounting and accordingly the net assets associated with the LTC business were reclassified to held and used at their respective fair values. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Company’s international health care business domiciled in Thailand (“Thailand business”), which was included in the Commercial Business reporting unit in the Health Care Benefits segment. The sale of the Thailand business closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(7)During the three and nine months ended September 30, 2022, the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and government entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(8)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex Holdings, Inc., which the Company sold on June 1, 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

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Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net loss attributable to CVS Health	$ 2,261	$ (3,406)	$ 6,298	$ 1,977

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Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Segment Reporting

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business. As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions. In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations. This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. Prior period segment financial information has been recast to conform with the current period presentation.

Following the segment realignment described above, the Company’s four reportable segments are as follows: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness 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 and Medicaid health care management 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. The Company entered Public Exchanges in four additional states effective January 2023 and will enter an additional five states effective January 2024.

Health Services Segment

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides 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 and provides various administrative, management and reporting services to pharmaceutical manufacturers. The Health Services segment’s clients are primarily employers,

insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, the U.S. Centers for Medicare & Medicaid Services (“CMS”), plans offered on Public Exchanges and private health insurance exchanges, other sponsors of health benefit plans throughout the United States and Covered Entities.

Pharmacy & Consumer Wellness Segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise. The segment also conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings. As of September 30, 2023, the Pharmacy & Consumer Wellness segment operated more than 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.

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 transaction and 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 for the year ended December 31, 2022, which were revised to conform with current year financial statement changes as described in Note 13 “Segment Reporting,” and are included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 25, 2023 (the “May 2023 8-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 Cash

Restricted cash included in other current assets on the unaudited condensed consolidated balance sheets primarily represents funds held on behalf of members and funds held in escrow in connection with agreements with accountable care organizations.

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 demand deposits, 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.

Health Care Contract Acquisition Costs

Health Care Contract Acquisition Costs

Insurance products included in the Health Care Benefits segment are cancellable by either the customer or the member monthly upon written notice. Acquisition costs related to prepaid health care and health indemnity contracts are generally expensed as incurred. For certain long-duration insurance contracts, acquisition costs directly related to the successful acquisition of a new or renewal insurance contract, including commissions, are deferred and are recorded as other current assets or other assets on

the unaudited condensed consolidated balance sheets. Contracts are grouped by product and issue year into cohorts consistent with the grouping used in estimating the associated liability and are amortized on a constant level basis based on the remaining in-force policies over the estimated term of the contracts to approximate straight-line amortization. Changes to the Company’s assumptions, including assumptions related to persistency, are reflected at the cohort level at the time of change and are recognized prospectively over the estimated terms of the contract. The amortization of deferred acquisition costs is recorded in operating expenses in the unaudited condensed consolidated statements of operations.

Goodwill

Goodwill

The Company accounts for business combinations using the acquisition method of accounting, which requires the excess cost of an acquisition over the fair value of net assets acquired and identifiable intangible assets to be recorded as goodwill. Goodwill is not amortized, but is subject to impairment reviews annually, or more frequently, if necessary.

Effective for the 2023 annual goodwill impairment test, the Company elected to change its annual goodwill impairment test date from August 31st to October 31st to better align with its annual budgeting processes, as this previous election predates large acquisitions such as Caremark Rx, Inc. and Aetna Inc.

The Company’s most recent goodwill impairment test was performed as of January 1, 2023, in connection with the segment realignment previously described in the “Description of Business” section. The results of that impairment test indicated that there was no impairment of goodwill as of the testing date, with the fair values of all reporting units with goodwill exceeding their respective carrying values by significant margins.

Intangible Assets

Intangible Assets

The Company’s identifiable intangible assets consist primarily of trademarks, trade names, customer contracts/relationships, covenants not to compete, technology, provider networks and value of business acquired (“VOBA”). These intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. Amounts assigned to identifiable intangible assets, and their related useful lives, are derived from established valuation techniques and management estimates.

The Company’s definite-lived intangible assets are amortized over their estimated useful lives based upon the pattern of future cash flows attributable to the asset. Definite-lived intangible assets are amortized using the straight-line method. VOBA is subject to loss recognition testing annually, or more frequently, if necessary.

Indefinite lived intangible assets are not amortized but are tested for impairment annually, or more frequently, if necessary.

Separate Accounts

Separate Accounts

Separate Accounts assets and liabilities related to large case pensions products represent funds maintained to meet specific objectives of contract holders who bear the investment risk. These assets and liabilities are carried at fair value. Net investment income (including net realized capital gains and losses) accrue directly to such contract holders. The assets of each account are legally segregated and are not subject to claims arising from the Company’s other businesses. Deposits, withdrawals and net investment income (including net realized and net unrealized capital gains and losses) on Separate Accounts assets are not reflected in the unaudited condensed consolidated statements of operations or cash flows. Management fees charged to contract holders are included in services revenue and recognized over the period earned.

Future Policy Benefits

Future Policy Benefits

Future policy benefits consist primarily of reserves for products for which the Company no longer solicits or accepts new customers, including limited payment pension and annuity contracts and long-term care insurance contracts and are recorded in other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. Contracts are grouped into cohorts by contract type and issue year. The liability for future policy benefits is adjusted for differences between actual and expected experience.

Reserves for limited payment pension and annuity contracts represent the Company’s estimate of the present value of future benefits to be paid to or on behalf of policyholders and are computed using actuarial principles that consider, among other things, assumptions reflecting anticipated mortality and retirement experience. On an annual basis, or more frequently if necessary, the Company reviews mortality assumptions against both industry standards and its experience.

Reserves for long-term care insurance contracts represent the Company’s estimate of the present value of future benefits and settlement costs to be paid to or on behalf of policyholders less the present value of future net premiums. The Company’s estimate of the present value of future benefits under such contracts is based upon mortality, morbidity, lapse and interest rate assumptions. On an annual basis, or more frequently if necessary, the Company reviews its mortality, morbidity and lapse assumptions against its experience. Annually, or each time the assumptions are changed, the net premium ratio used to calculate the future policy benefit liability is updated to reflect actual experience, as well as the impact of any change in assumptions on the Company’s future cash flows.

The Company discounts its future policy benefit liability using a curve of spot rates derived from an upper-medium grade fixed-income investment. At each reporting date, the Company will measure its liability for future policy benefits using both the current spot rate curve and the locked-in discount rate at each cohort’s inception. Any difference between the measured liabilities is recorded in other comprehensive income (loss). In subsequent periods, the current period amount recorded in other comprehensive income (loss) will be adjusted for amounts previously recorded in accumulated other comprehensive loss.

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 primarily 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 $12 million and $16 million in the three months ended September 30, 2023 and 2022, respectively, and expensed fees for the use of this network of $44 million and $47 million in the nine months ended September 30, 2023 and 2022, 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”), which operates an LTC pharmacy. Heartland paid the Company $5 million and $22 million for pharmaceutical inventory purchases during the three months ended September 30, 2023 and 2022, respectively, and $34 million and $66 million for pharmaceutical inventory purchases during the nine months ended September 30, 2023 and 2022, 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 Recently Adopted

New Accounting Pronouncements Recently Adopted

Targeted Improvements to the Accounting for Long-Duration Insurance Contracts

In August 2018, the Financial Accounting Standards Board issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) (the “long-duration insurance standard”). 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 Company adopted this accounting standard on January 1, 2023, using the modified retrospective transition method as of the earliest period presented, January 1, 2021, also referred to as the “transition date”, for changes to its liabilities for future policy benefits, deferred acquisition costs and value of business acquired intangible asset. Upon adoption, the Company recorded a transition date net adjustment to reduce accumulated other comprehensive income (loss) by $986 million ($766 million after-

tax) with a corresponding increase to its liability for future policy benefits, the majority of which is included within other insurance liabilities and other long-term liabilities on the unaudited condensed consolidated balance sheets. The transition date net adjustment was 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 historical guidance. The Company was not required to record an adjustment to retained earnings on the transition date. Prior period financial information has been revised to reflect the adoption of the long-duration insurance standard.

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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of 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	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	13,043	$	12,945
Restricted cash (included in other current assets)	96		144
Restricted cash (included in other assets)	236		216
Total cash, cash equivalents and restricted cash in the statements of cash flows	$	13,375	$	13,305

Schedule of accounts receivable, net

Accounts receivable, net at September 30, 2023 and December 31, 2022 was composed of the following:

In millions	September 30, 2023		December 31, 2022
Trade receivables	$	10,424	$	8,983
Vendor and manufacturer receivables	16,646		12,395
Premium receivables	3,254		2,676
Other receivables	2,603		3,449
Total accounts receivable, net (1)	$	32,927	$	27,503

_____________________________________________

(1)Includes accounts receivable of $227 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Rollforward of deferred acquisition costs

The following is a roll forward of deferred acquisition costs for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Deferred acquisition costs, beginning of the period	$	1,219	$	879
Capitalizations	414		423
Amortization expense	(196)		(163)
Deferred acquisition costs, end of the period	$	1,437	$	1,139

Schedule of disaggregation of revenue

The following tables disaggregate the Company’s revenue by major source in each segment for the three and nine months ended September 30, 2023 and 2022:

In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Three Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	44,985	$	22,977	$	—	$	(11,764)	$	56,198
Front Store	—		—		5,371		—		—		5,371
Premiums	24,645		—		—		12		—		24,657
Net investment income (loss)	187		—		(2)		92		—		277
Other	1,464		1,906		526		1		(636)		3,261
Total	$	26,296	$	46,891	$	28,872	$	105	$	(12,400)	$	89,764
Health Services distribution channel:
Pharmacy network (1)			$	27,981
Mail & specialty (2)			17,004
Other			1,906
Total			$	46,891
Three Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	42,652	$	21,084	$	—	$	(11,361)	$	52,375
Front Store	—		—		5,581		—		—		5,581
Premiums	20,989		—		—		14		—		21,003
Net investment income (loss)	101		—		(10)		110		—		201
Other	1,406		602		582		18		(609)		1,999
Total	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Health Services distribution channel:
Pharmacy network (1)			$	26,334
Mail & specialty (2)			16,318
Other			602
Total			$	43,254

In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations		Consolidated Totals
Nine Months Ended September 30, 2023
Major goods/services lines:
Pharmacy	$	—	$	133,428	$	67,371	$	—	$	(36,754)	$	164,045
Front Store	—		—		16,597		—		—		16,597
Premiums	74,079		—		—		38		—		74,117
Net investment income (loss)	556		—		(4)		333		—		885
Other	4,285		4,269		1,614		5		(1,854)		8,319
Total	$	78,920	$	137,697	$	85,578	$	376	$	(38,608)	$	263,963
Health Services distribution channel:
Pharmacy network (1)			$	83,050
Mail & specialty (2)			50,378
Other			4,269
Total			$	137,697
Nine Months Ended September 30, 2022
Major goods/services lines:
Pharmacy	$	—	$	123,627	$	61,496	$	—	$	(33,932)	$	151,191
Front Store	—		—		16,630		—		—		16,630
Premiums	63,848		—		—		46		—		63,894
Net investment income (loss)	278		—		(44)		281		—		515
Other	4,205		2,180		1,799		51		(1,844)		6,391
Total	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Health Services distribution channel:
Pharmacy network (1)			$	76,358
Mail & specialty (2)			47,269
Other			2,180
Total			$	125,807

_____________________________________________

(1)Health Services pharmacy network is defined as claims filled at retail and specialty retail pharmacies, including the Company’s retail pharmacies and LTC pharmacies. Effective January 1, 2023, pharmacy network also includes activity associated with Maintenance Choice®, which 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. Maintenance Choice activity was previously reflected in mail & specialty. Prior period financial information has been revised to conform with current period presentation.

(2)Health Services mail & specialty is defined as specialty mail claims inclusive of Specialty Connect® claims picked up at a retail pharmacy, as well as mail order and specialty claims fulfilled by the Pharmacy & Consumer Wellness segment. Effective January 1, 2023, mail & specialty excludes Maintenance Choice activity, which is now reflected within pharmacy network. Prior period financial information has been revised to conform with current period presentation.

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	September 30, 2023		December 31, 2022
Trade receivables (included in accounts receivable, net)	$	10,424	$	8,983
Contract liabilities (included in accrued expenses)	167		71

Below is a summary of such changes:

	Nine Months Ended September 30,
In millions	2023		2022
Contract liabilities, beginning of the period	$	71	$	87
Rewards earnings and gift card issuances	250		250
Redemption and breakage	(267)		(263)
Acquired contract liabilities	109		—
Other	4		—
Contract liabilities, end of the period	$	167	$	74

Schedule of adjustments resulting from applying new accounting standard

The following summarizes changes in the balances of long-duration insurance liabilities as a result of the adoption of the long-duration insurance standard effective January 1, 2021:

In millions	Large Case Pensions		Long-Term Care		Other
Balance at December 31, 2020, net of reinsurance	$	3,224	$	1,142	$	480
Add: Reinsurance recoverable	—		—		274
Balance at December 31, 2020	3,224		1,142		754
Change in discount rate assumptions	604		553		44
Removal of shadow adjustments in accumulated other comprehensive income	(181)		—		—
Adjusted balance at January 1, 2021	3,647		1,695		798
Less: Reinsurance recoverable	—		—		308
Adjusted balance at January 1, 2021, net of reinsurance	$	3,647	$	1,695	$	490

Impact of Long-Duration Insurance Standard Adoption on Financial Statement Line Items

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Three Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	17,419	$	(18)	$	17,401
Operating expenses	9,606		6		9,612
Total operating costs	85,090		(12)		85,078
Operating loss	(3,931)		12		(3,919)
Loss before income tax benefit	(4,456)		12		(4,444)
Income tax benefit	(1,047)		2		(1,045)
Net loss	(3,409)		10		(3,399)
Net loss attributable to CVS Health	(3,416)		10		(3,406)
Net loss per share attributable to CVS Health:
Basic	$	(2.60)	$	0.01	$	(2.59)
Diluted	$	(2.60)	$	0.01	$	(2.59)
Nine Months Ended
Condensed Consolidated Statement of Operations:
Operating costs:
Health care costs	$	52,976	$	(162)	$	52,814
Operating expenses	28,128		(5)		28,123
Total operating costs	234,493		(167)		234,326
Operating income	4,128		167		4,295
Income before income tax provision	2,519		167		2,686
Income tax provision	654		37		691
Net income	1,865		130		1,995
Net income attributable to CVS Health	1,847		130		1,977
Net income per share attributable to CVS Health:
Basic	$	1.41	$	0.10	$	1.51
Diluted	$	1.40	$	0.09	$	1.49

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated balance sheet as of December 31, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported December 31, 2022		Adjustments		Adjusted December 31, 2022
Condensed Consolidated Balance Sheet:
Other current assets	$	2,685	$	(49)	$	2,636
Total current assets	65,682		(49)		65,633
Intangible assets, net	24,754		49		24,803
Total assets	228,275		—		228,275
Health care costs payable	10,406		(264)		10,142
Other insurance liabilities	1,140		(51)		1,089
Total current liabilities	69,736		(315)		69,421
Deferred income taxes	3,880		136		4,016
Other long-term insurance liabilities	6,108		(273)		5,835
Other long-term liabilities	6,732		(2)		6,730
Total liabilities	156,960		(454)		156,506
Retained earnings	56,145		253		56,398
Accumulated other comprehensive loss	(1,465)		201		(1,264)
Total CVS Health shareholders’ equity	71,015		454		71,469
Total shareholders’ equity	71,315		454		71,769
Total liabilities and shareholders’ equity	228,275		—		228,275

As a result of applying the long-duration insurance standard using a modified retrospective method, the following adjustments were made to amounts reported in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2022:

	Impact of Change in Accounting Policy
In millions	As Reported September 30, 2022		Adjustments		Adjusted September 30, 2022
Condensed Consolidated Statement of Cash Flows:
Reconciliation of net income to net cash provided by operating activities:
Net income	$	1,865	$	130	$	1,995
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,198		(17)		3,181
Deferred income taxes and other noncash items	(2,250)		37		(2,213)
Change in operating assets and liabilities, net of effects from acquisitions:
Other assets	(311)		67		(244)
Health care costs payable and other insurance liabilities	4,687		(211)		4,476
Other liabilities	7,377		(6)		7,371

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Acquisitions and Assets Held for Sale (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Fair Value of Consideration Transferred

The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	9,579
Fair value of replacement equity awards for pre-combination services (3.9 million shares) (1)	118
Effective settlement of pre-existing relationship (2)	(29)
Total consideration transferred	$	9,668

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Oak Street Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $118 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $165 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $29 million of effectively settled liabilities the Company owed to Oak Street Health from their pre-existing relationship.

The fair value of the consideration transferred on the date of acquisition consisted of the following:

In millions
Cash	$	7,450
Fair value of replacement equity awards for pre-combination services (3.2 million shares) (1)	14
Effective settlement of pre-existing relationship (2)	(111)
Total consideration transferred	$	7,353

_____________________________________________

(1)The fair value of the replacement equity awards issued by the Company was determined as of the Signify Health Acquisition Date. The fair value of the awards attributed to pre-combination services of $14 million is included in the consideration transferred and the fair value of the awards attributed to post-combination services of $167 million has been, or will be, included in the Company’s post-combination financial statements as compensation costs.

(2)The purchase price included $111 million of effectively settled liabilities the Company owed to Signify Health from their pre-existing relationship.

Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	201
Investments	168
Accounts receivable	1,143
Other current assets	46
Property and equipment	180
Operating lease right-of-use assets	316
Goodwill	7,189
Intangible assets	4,233
Other long-term assets	7
Total assets acquired	13,483
Health care costs payable	1,098
Other current liabilities	443
Operating lease liabilities (current and long-term)	378
Debt (current and long-term)	1,028
Deferred income taxes	773
Other long-term liabilities	29
Total liabilities assumed	3,749
Noncontrolling interests	66
Total consideration transferred	$	9,668

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

In millions
Cash and cash equivalents	$	376
Accounts receivable	190
Other current assets (including restricted cash of $28)	147
Property and equipment	25
Goodwill	5,922
Intangible assets	1,920
Other long-term assets	23
Total assets acquired	8,603
Other current liabilities	606
Debt (current and long-term)	346
Deferred income taxes	272
Other long-term liabilities	26
Total liabilities assumed	1,250
Total consideration transferred	$	7,353

Summary of the Preliminary Valuation of Goodwill Allocated to Business Segments

The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	6,912
Pharmacy & Consumer Wellness	156
Health Care Benefits	121
Total goodwill	$	7,189

The preliminary valuation of goodwill was allocated to the Company’s business segments as follows:

In millions
Health Services	$	3,419
Health Care Benefits	2,473
Pharmacy & Consumer Wellness	30
Total goodwill	$	5,922

Summary of Preliminary Fair Values and Weighted Average Useful Lives for Intangible Assets Acquired

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Oak Street Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships (1)	$	3,620	19.9
Technology	143		3.0
Trademark (definite-lived)	470		8.0
Total intangible assets	$	4,233	18.0

_____________________________________________

(1) The substantial majority of the customer relationships intangible asset relates to relationships with health plan payers.

The following table summarizes the fair values and weighted average useful lives for intangible assets acquired in the Signify Health Acquisition:

In millions, except weighted average useful life	Gross Fair Value		Weighted Average Useful Life (years)
Customer relationships	$	1,810	16.7
Technology	50		3.0
Trademark (definite-lived)	60		5.0
Total intangible assets	$	1,920	16.0

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Investments (Tables)

9 Months Ended

Sep. 30, 2023

Investments [Abstract]

Schedule of Total Investments

Total investments at September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023						December 31, 2022
In millions	Current		Long-term		Total		Current		Long-term		Total
Debt securities available for sale	$	3,027	$	17,374	$	20,401	$	2,718	$	17,562	$	20,280
Mortgage loans	116		1,157		1,273		55		989		1,044
Other investments	2		3,136		3,138		5		2,562		2,567
Total investments (1)	$	3,145	$	21,667	$	24,812	$	2,778	$	21,113	$	23,891

_____________________________________________

(1)Includes long-term investments of $17 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

Schedule of Debt Securities Available For Sale

Debt securities available for sale at September 30, 2023 and December 31, 2022 were as follows:

In millions	Gross Amortized Cost		Allowance for Credit Losses		Net Amortized  Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
September 30, 2023
Debt securities:
U.S. government securities	$	2,092	$	—	$	2,092	$	—	$	(171)	$	1,921
States, municipalities and political subdivisions	2,277		—		2,277		1		(151)		2,127
U.S. corporate securities	10,062		—		10,062		12		(879)		9,195
Foreign securities	2,621		(1)		2,620		9		(233)		2,396
Residential mortgage-backed securities	833		—		833		—		(103)		730
Commercial mortgage-backed securities	1,128		—		1,128		—		(151)		977
Other asset-backed securities	3,069		—		3,069		13		(46)		3,036
Redeemable preferred securities	20		—		20		—		(1)		19
Total debt securities (1)	$	22,102	$	(1)	$	22,101	$	35	$	(1,735)	$	20,401
December 31, 2022
Debt securities:
U.S. government securities	$	2,074	$	—	$	2,074	$	—	$	(182)	$	1,892
States, municipalities and political subdivisions	2,393		—		2,393		8		(129)		2,272
U.S. corporate securities	9,838		(3)		9,835		26		(903)		8,958
Foreign securities	2,780		(1)		2,779		15		(244)		2,550
Residential mortgage-backed securities	845		—		845		1		(89)		757
Commercial mortgage-backed securities	1,172		—		1,172		1		(155)		1,018
Other asset-backed securities	2,940		—		2,940		6		(136)		2,810
Redeemable preferred securities	25		—		25		—		(2)		23
Total debt securities (1)	$	22,067	$	(4)	$	22,063	$	57	$	(1,840)	$	20,280

_____________________________________________

(1)Investment risks associated with the Company’s experience-rated products generally do not impact the Company’s consolidated operating results. At September 30, 2023, debt securities with a fair value of $560 million, gross unrealized capital gains of $2 million and gross unrealized capital losses of $63 million and at December 31, 2022, debt securities with a fair value of $609 million, gross unrealized capital gains of $3 million and gross unrealized capital losses of $59 million were included in total debt securities, but support experience-rated products. Changes in net unrealized capital gains (losses) on these securities are not reflected in accumulated other comprehensive 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 September 30, 2023 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	$	1,273	$	1,254
One year through five years	7,413		6,995
After five years through ten years	4,279		3,891
Greater than ten years	4,106		3,518
Residential mortgage-backed securities	833		730
Commercial mortgage-backed securities	1,128		977
Other asset-backed securities	3,069		3,036
Total	$	22,101	$	20,401

Schedule of Debt Securities In An Unrealized Capital Loss Position

Summarized below are the debt securities the Company held at September 30, 2023 and December 31, 2022 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
September 30, 2023
Debt securities:
U.S. government securities	143	$	393	$	12	370	$	1,250	$	159	513	$	1,643	$	171
States, municipalities and political subdivisions	614	1,003		36		634	939		115		1,248	1,942		151
U.S. corporate securities	2,619	2,903		127		4,427	5,688		752		7,046	8,591		879
Foreign securities	565	749		28		1,064	1,473		205		1,629	2,222		233
Residential mortgage-backed securities	88	234		9		460	496		94		548	730		103
Commercial mortgage-backed securities	83	207		11		340	668		140		423	875		151
Other asset-backed securities	399	1,010		11		597	1,144		35		996	2,154		46
Redeemable preferred securities	4	2		—		8	17		1		12	19		1
Total debt securities	4,515	$	6,501	$	234	7,900	$	11,675	$	1,501	12,415	$	18,176	$	1,735
December 31, 2022
Debt securities:
U.S. government securities	519	$	1,620	$	164	35	$	191	$	18	554	$	1,811	$	182
States, municipalities and political subdivisions	859	1,370		95		196	322		34		1,055	1,692		129
U.S. corporate securities	5,193	6,537		622		1,479	1,822		281		6,672	8,359		903
Foreign securities	1,168	1,715		147		403	592		97		1,571	2,307		244
Residential mortgage-backed securities	452	464		39		91	257		50		543	721		89
Commercial mortgage-backed securities	288	611		69		187	381		86		475	992		155
Other asset-backed securities	1,008	1,893		88		391	694		48		1,399	2,587		136
Redeemable preferred securities	13	18		2		2	5		—		15	23		2
Total debt securities	9,500	$	14,228	$	1,226	2,784	$	4,264	$	614	12,284	$	18,492	$	1,840

The maturity dates for debt securities in an unrealized capital loss position at September 30, 2023 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	$	16	$	1	$	1,032	$	19	$	1,048	$	20
One year through five years	151		7		6,356		416		6,507		423
After five years through ten years	113		14		3,439		381		3,552		395
Greater than ten years	206		37		3,104		560		3,310		597
Residential mortgage-backed securities	8		1		722		102		730		103
Commercial mortgage-backed securities	16		2		859		149		875		151
Other asset-backed securities	18		1		2,136		45		2,154		46
Total	$	528	$	63	$	17,648	$	1,672	$	18,176	$	1,735

Schedule of Activity in Mortgage Loan Portfolio

During the three and nine months ended September 30, 2023 and 2022, the Company had the following activity in its mortgage loan portfolio:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
New mortgage loans	$	63	$	125	$	286	$	305
Mortgage loans fully repaid	17		62		34		136
Mortgage loans foreclosed	—		—		—		—

Schedule of Mortgage Loan Amortized Cost and Credit Quality Indicator

Based on the Company’s assessments at September 30, 2023 and December 31, 2022, 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	2023		2022		2021		2020		2019		Prior		Total
September 30, 2023
1	$	—	$	—	$	—	$	—	$	—	$	12	$	12
2 to 4	259		344		239		35		11		347		1,235
5 and 6	—		—		6		—		—		20		26
7	—		—		—		—		—		—		—
Total	$	259	$	344	$	245	$	35	$	11	$	379	$	1,273
December 31, 2022
1			$	—	$	—	$	—	$	—	$	15	$	15
2 to 4			326		247		36		11		402		1,022
5 and 6			—		—		—		—		7		7
7			—		—		—		—		—		—
Total			$	326	$	247	$	36	$	11	$	424	$	1,044

Schedule of Net Investment Income

Sources of net investment income for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Debt securities	$	217	$	174	$	612	$	510
Mortgage loans	16		14		43		38
Other investments	199		134		609		279
Gross investment income	432		322		1,264		827
Investment expenses	(13)		(11)		(34)		(29)
Net investment income (excluding net realized capital losses)	419		311		1,230		798
Net realized capital losses (1)	(142)		(110)		(345)		(283)
Net investment income (2)	$	277	$	201	$	885	$	515

_____________________________________________

(1)Net realized capital losses include yield-related impairment losses on debt securities of $47 million in the three months ended September 30, 2023. There were no credit-related losses on debt securities in the three months ended September 30, 2023. Net realized capital losses include yield-related impairment losses on debt securities of $108 million and are net of the reversal of previously recorded credit-related impairment losses on debt securities of $3 million in the nine months ended September 30, 2023. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $73 million and $1 million, respectively, in the three months ended September 30, 2022. Net realized capital losses include yield-related and credit-related impairment losses on debt securities of $121 million and $17 million, respectively, in the nine months ended September 30, 2022.

(2)Net investment income includes $8 million and $25 million for the three and nine months ended September 30, 2023, respectively, and $8 million and $26 million for the three and nine months ended September 30, 2022, respectively, 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 and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Proceeds from sales	$	1,171	$	593	$	3,503	$	3,556
Gross realized capital gains	2		3		7		20
Gross realized capital losses	110		28		294		135

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Fair Value (Tables)

9 Months Ended

Sep. 30, 2023

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 unaudited condensed consolidated balance sheets at September 30, 2023 and December 31, 2022 were as follows:

In millions	Level 1		Level 2		Level 3		Total
September 30, 2023
Cash and cash equivalents	$	5,159	$	7,884	$	—	$	13,043
Debt securities:
U.S. government securities	1,899		22		—		1,921
States, municipalities and political subdivisions	—		2,127		—		2,127
U.S. corporate securities	—		9,166		29		9,195
Foreign securities	—		2,388		8		2,396
Residential mortgage-backed securities	—		730		—		730
Commercial mortgage-backed securities	—		977		—		977
Other asset-backed securities	—		3,036		—		3,036
Redeemable preferred securities	—		19		—		19
Total debt securities	1,899		18,465		37		20,401
Equity securities	187		—		83		270
Total	$	7,245	$	26,349	$	120	$	33,714
December 31, 2022
Cash and cash equivalents (1)	$	6,902	$	6,049	$	—	$	12,951
Debt securities:
U.S. government securities	1,860		32		—		1,892
States, municipalities and political subdivisions	—		2,272		—		2,272
U.S. corporate securities	—		8,897		61		8,958
Foreign securities	—		2,542		8		2,550
Residential mortgage-backed securities	—		757		—		757
Commercial mortgage-backed securities	—		1,018		—		1,018
Other asset-backed securities	—		2,810		—		2,810
Redeemable preferred securities	—		23		—		23
Total debt securities	1,860		18,351		69		20,280
Equity securities	116		—		60		176
Total	$	8,878	$	24,400	$	129	$	33,407

_____________________________________________

(1)Includes cash and cash equivalents of $6 million which were accounted for as assets held for sale and were included in assets held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

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 unaudited condensed consolidated balance sheets at adjusted cost or contract value at September 30, 2023 and December 31, 2022 were as follows:

	Carrying Value		Estimated Fair Value
In millions			Level 1		Level 2		Level 3		Total
September 30, 2023
Assets:
Mortgage loans	$	1,273	$	—	$	—	$	1,203	$	1,203
Equity securities (1)	519		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	1		—		—		1		1
Without a fixed maturity	324		—		—		277		277
Long-term debt	61,914		54,807		—		—		54,807
December 31, 2022
Assets:
Mortgage loans	$	1,044	$	—	$	—	$	978	$	978
Equity securities (1)	411		N/A		N/A		N/A		N/A
Liabilities:
Investment contract liabilities:
With a fixed maturity	3		—		—		3		3
Without a fixed maturity	332		—		—		305		305
Long-term debt (2)	52,257		47,653		—		—		47,653

_____________________________________________

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

(2)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

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

Separate Accounts financial assets as of September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023								December 31, 2022
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1	$	152	$	—	$	153	$	2	$	154	$	—	$	156
Debt securities	667		1,896		—		2,563		712		1,965		—		2,677
Common/collective trusts	—		443		—		443		—		480		—		480
Total (1)	$	668	$	2,491	$	—	$	3,159	$	714	$	2,599	$	—	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

The following table shows the fair value of assets, by major investment category, supporting Separate Accounts as of September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	153	$	156
Debt securities:
U.S. government securities	671		717
States, municipalities and political subdivisions	26		27
U.S. corporate securities	1,610		1,667
Foreign securities	198		201
Residential mortgage-backed securities	37		41
Commercial mortgage-backed securities	6		6
Other asset-backed securities	15		18
Total debt securities	2,563		2,677
Common/collective trusts	443		480
Total (1)	$	3,159	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

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Health Care Costs Payable (Tables)

9 Months Ended

Sep. 30, 2023

Health Care and Other Insurance Liabilities [Abstract]

Components of Change in Health Care Costs Payable

The following table shows the components of the change in health care costs payable during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Health care costs payable, beginning of the period	$	10,142	$	8,678
Less: Reinsurance recoverables	5		8
Less: Impact of discount rate on long-duration insurance reserves (1)	8		—
Health care costs payable, beginning of the period, net	10,129		8,670
Acquisitions, net	1,098		—
Add: Components of incurred health care costs
Current year	64,183		53,216
Prior years	(679)		(670)
Total incurred health care costs (2)	63,504		52,546
Less: Claims paid
Current year	52,952		43,632
Prior years	9,207		7,468
Total claims paid	62,159		51,100
Add: Premium deficiency reserve	—		5
Health care costs payable, end of the period, net	12,572		10,121
Add: Reinsurance recoverables	4		5
Add: Impact of discount rate on long-duration insurance reserves (1)	(26)		5
Health care costs payable, end of the period	$	12,550	$	10,131

_____________________________________________

(1)Reflects the difference between the current discount rate and the locked-in discount rate on long-duration insurance reserves which is recorded within accumulated other comprehensive loss on the unaudited condensed consolidated balance sheets. Refer to Note 1 ‘‘Significant Accounting Policies’’ for further information related to the adoption of the long-duration insurance contracts accounting standard.

(2)Total incurred health care costs for the nine months ended September 30, 2023 and 2022 in the table above exclude $62 million and $59 million, respectively, of health care costs recorded in the Health Care Benefits segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets and $163 million and $204 million, respectively, of health care costs recorded in the Corporate/Other segment that are included in other insurance liabilities on the unaudited condensed consolidated balance sheets. The incurred health care costs for the nine months ended September 30, 2022 also exclude $5 million for a premium deficiency reserve related to the Company’s Medicaid products.

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Other Insurance Liabilities and Separate Accounts (Tables)

9 Months Ended

Sep. 30, 2023

Insurance [Abstract]

Schedule of Changes in Liability for Future Policy Benefits

The following tables show the components of the change in the liability for future policy benefits, which is included in other insurance liabilities and other long-term insurance liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30, 2023
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of period - current discount rate			$	300
Beginning liability for future policy benefits at original (locked-in) discount rate			$	302
Effect of changes in cash flow assumptions			—
Effect of actual variances from expected experience			7
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			309
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(29)
Ending liability for future policy benefits at original (locked-in) discount rate			291
Effect of changes in discount rate assumptions			(12)
Liability for future policy benefits, end of period - current discount rate			$	279
Present value of expected future policy benefits
Liability for future policy benefits, beginning of period - current discount rate	$	2,253	$	1,566
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,425	$	1,613
Effect of changes in cash flow assumptions	—		—
Effect of actual variances from expected experience	1		9
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,426		1,622
Issuances	8		—
Interest accrual (using locked-in discount rate)	74		61
Benefit payments (actual)	(210)		(53)
Ending liability for future policy benefits at original (locked-in) discount rate	2,298		1,630
Effect of changes in discount rate assumptions	(247)		(146)
Liability for future policy benefits, end of period - current discount rate	$	2,051	$	1,484
Net liability for future policy benefits	$	2,051	$	1,205
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,051	$	1,205

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

	Nine Months Ended September 30, 2022
In millions	Large Case Pensions		Long-Term Care
Present value of expected net premiums (1)
Liability for future policy benefits, beginning of the period - current discount rate			$	389
Beginning liability for future policy benefits at original (locked-in) discount rate			$	323
Effect of changes in cash flow assumptions			(14)
Effect of actual variances from expected experience			13
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			322
Interest accrual (using locked-in discount rate)			11
Net premiums (actual)			(30)
Ending liability for future policy benefits at original (locked-in) discount rate			303
Effect of changes in discount rate assumptions			(5)
Liability for future policy benefits, end of the period - current discount rate			$	298
Present value of expected future policy benefits
Liability for future policy benefits, beginning of the period - current discount rate	$	3,034	$	1,991
Beginning liability for future policy benefits at original (locked-in) discount rate	$	2,650	$	1,480
Effect of changes in cash flow assumptions	—		99
Effect of actual variances from expected experience	(26)		15
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate	2,624		1,594
Issuances	4		—
Interest accrual (using locked-in discount rate)	80		60
Benefit payments (actual)	(220)		(48)
Ending liability for future policy benefits at original (locked-in) discount rate	2,488		1,606
Effect of changes in discount rate assumptions	(205)		(78)
Liability for future policy benefits, end of the period - current discount rate	$	2,283	$	1,528
Net liability for future policy benefits	$	2,283	$	1,230
Less: Reinsurance recoverable	—		—
Net liability for future policy benefits, net of reinsurance recoverable	$	2,283	$	1,230

_____________________________________________

(1)The present value of expected net premiums is equivalent to the present value of expected gross premiums for the long-term care insurance contracts as net premiums are set equal to gross premiums.

The amount of undiscounted expected gross premiums and expected future benefit payments for long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

In millions	September 30, 2023		September 30, 2022
Large case pensions
Expected future benefit payments	$	3,337	$	3,622
Expected gross premiums	—		—
Long-term care
Expected future benefit payments	$	3,237	$	3,269
Expected gross premiums	419		439

The weighted-average interest rate used in the measurement of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions
Interest accretion rate	4.20%	4.20%
Current discount rate	5.86%	5.42%
Long-term care
Interest accretion rate	5.11%	5.11%
Current discount rate	5.99%	5.65%

The weighted-average durations (in years) of the long-duration insurance liabilities as of September 30, 2023 and 2022 were as follows:

	September 30, 2023	September 30, 2022
Large case pensions	7.4	7.4
Long-term care	12.2	12.8

Roll Forward of Policyholders' Funds

The following table shows the components of the change in policyholders’ funds related to long-duration insurance contracts, which are included in policyholders’ funds and other long-term liabilities on the unaudited condensed consolidated balance sheets, during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions, except weighted average crediting rate	2023		2022
Policyholders’ funds, beginning of the period	$	345	$	522
Deposits received	1		10
Policy charges	(2)		(1)
Surrenders and withdrawals	(23)		(27)
Interest credited	9		10
Change in net unrealized losses	(4)		(163)
Other	(23)		(18)
Policyholders’ funds, end of the period	$	303	$	333
Weighted average crediting rate	4.40%		4.80%
Net amount at risk	$	—	$	—
Cash surrender value	$	324	$	337

Summary of Separate Account Assets

Separate Accounts financial assets as of September 30, 2023 and December 31, 2022 were as follows:

	September 30, 2023								December 31, 2022
In millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	1	$	152	$	—	$	153	$	2	$	154	$	—	$	156
Debt securities	667		1,896		—		2,563		712		1,965		—		2,677
Common/collective trusts	—		443		—		443		—		480		—		480
Total (1)	$	668	$	2,491	$	—	$	3,159	$	714	$	2,599	$	—	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

The following table shows the fair value of assets, by major investment category, supporting Separate Accounts as of September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	153	$	156
Debt securities:
U.S. government securities	671		717
States, municipalities and political subdivisions	26		27
U.S. corporate securities	1,610		1,667
Foreign securities	198		201
Residential mortgage-backed securities	37		41
Commercial mortgage-backed securities	6		6
Other asset-backed securities	15		18
Total debt securities	2,563		2,677
Common/collective trusts	443		480
Total (1)	$	3,159	$	3,313

_____________________________________________

(1)Excludes $41 million of other receivables and $85 million of other payables at September 30, 2023 and December 31, 2022, respectively.

Roll Forward of Separate Accounts

The following table shows the components of the change in Separate Accounts liabilities during the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
In millions	2023		2022
Separate Accounts liability, beginning of the period	$	3,228	$	5,087
Premiums and deposits	657		636
Surrenders and withdrawals	(7)		(576)
Benefit payments	(714)		(711)
Investment (earnings) losses	42		(1,057)
Net transfers from general account	4		7
Other	(10)		(68)
Separate Accounts liability, end of the period	$	3,200	$	3,318
Cash surrender value, end of the period	$	2,136	$	2,153

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Summary of Company's Borrowings

The following table is a summary of the Company’s borrowings at September 30, 2023 and December 31, 2022:

In millions	September 30, 2023		December 31, 2022
Long-term debt
2.8% senior notes due June 2023	$	—	$	1,300
4% senior notes due December 2023	414		414
3.375% senior notes due August 2024	650		650
2.625% senior notes due August 2024	1,000		1,000
3.5% senior notes due November 2024	750		750
5% senior notes due December 2024 (1)	299		299
4.1% senior notes due March 2025	950		950
3.875% senior notes due July 2025	2,828		2,828
5% senior notes due February 2026	1,500		—
0% convertible senior notes due March 2026	3		—
2.875% senior notes due June 2026	1,750		1,750
3% senior notes due August 2026	750		750
3.625% senior notes due April 2027	750		750
6.25% senior notes due June 2027	372		372
1.3% senior notes due August 2027	2,250		2,250
4.3% senior notes due March 2028	5,000		5,000
5% senior notes due January 2029	1,000		—
3.25% senior notes due August 2029	1,750		1,750
5.125% senior notes due February 2030	1,500		—
3.75% senior notes due April 2030	1,500		1,500
1.75% senior notes due August 2030	1,250		1,250
5.25% senior notes due January 2031	750		—
1.875% senior notes due February 2031	1,250		1,250
2.125% senior notes due September 2031	1,000		1,000
5.25% senior notes due February 2033	1,750		—
5.3% senior notes due June 2033	1,250		—
4.875% senior notes due July 2035	652		652
6.625% senior notes due June 2036	771		771
6.75% senior notes due December 2037	533		533
4.78% senior notes due March 2038	5,000		5,000
6.125% senior notes due September 2039	447		447
4.125% senior notes due April 2040	1,000		1,000
2.7% senior notes due August 2040	1,250		1,250
5.75% senior notes due May 2041	133		133
4.5% senior notes due May 2042	500		500
4.125% senior notes due November 2042	500		500
5.3% senior notes due December 2043	750		750
4.75% senior notes due March 2044	375		375
5.125% senior notes due July 2045	3,500		3,500
3.875% senior notes due August 2047	1,000		1,000
5.05% senior notes due March 2048	8,000		8,000
4.25% senior notes due April 2050	750		750
5.625% senior notes due February 2053	1,250		—
5.875% senior notes due June 2053	1,250		—

6% senior notes due June 2063	750		—
Finance lease liabilities	1,493		1,465
Other	309		314
Total debt principal	62,479		52,753
Debt premiums	190		200
Debt discounts and deferred financing costs	(755)		(696)
	61,914		52,257
Less:
Current portion of long-term debt	(2,132)		(1,778)
Long-term debt (1)	$	59,782	$	50,479

_____________________________________________________________________________________________________________________________

(1)Includes long-term debt of $3 million which was accounted for as liabilities held for sale and was included in liabilities held for sale on the unaudited condensed consolidated balance sheet at December 31, 2022. See Note 2 ‘‘Acquisitions and Assets Held for Sale’’ for additional information.

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Share repurchase programs

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

In billions Authorization Date	Authorized		Remaining as of September 30, 2023
November 17, 2022 (“2022 Repurchase Program”)	$	10.0	$	10.0
December 9, 2021 (“2021 Repurchase Program”)	10.0		4.5

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Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2023

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 and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Net unrealized investment gains (losses):
Beginning of period balance	$	(1,113)	$	(1,199)	$	(1,519)	$	778
Adoption of new accounting standard ($0, $0, $0, $26 pretax) (1)	—		—		—		20
Other comprehensive loss before reclassifications ($(475), $(814), $(310), $(3,361) pretax)	(478)		(725)		(313)		(2,852)
Amounts reclassified from accumulated other comprehensive income (loss) ($157, $99, $398, $253 pretax) (2)	157		88		398		218
Other comprehensive income (loss)	(321)		(637)		85		(2,634)
End of period balance	(1,434)		(1,836)		(1,434)		(1,836)
Change in discount rate on long-duration insurance reserves:
Beginning of period balance	205		28		219		—
Adoption of new accounting standard ($0, $0, $0, $(838) pretax) (1)	—		—		—		(651)
Other comprehensive income before reclassifications ($233, $321, $210, $1,195 pretax)	181		250		167		929
Other comprehensive income	181		250		167		929
End of period balance	386		278		386		278
Foreign currency translation adjustments:
Beginning of period balance	1		2		—		—
Other comprehensive loss before reclassifications	(2)		(7)		(1)		(5)
Other comprehensive loss	(2)		(7)		(1)		(5)
End of period balance	(1)		(5)		(1)		(5)
Net cash flow hedges:
Beginning of period balance	252		234		239		222
Other comprehensive income before reclassifications ($0, $13, $25, $37 pretax)	—		10		19		28
Amounts reclassified from accumulated other comprehensive income ($(5), $(2), $(13), $(10) pretax) (3)	(4)		(2)		(10)		(8)
Other comprehensive income (loss)	(4)		8		9		20
End of period balance	248		242		248		242
Pension and other postretirement benefits:
Beginning of period balance	(203)		(34)		(203)		(35)
Amounts reclassified from accumulated other comprehensive loss ($0, $1, $0, $2 pretax) (4)	—		1		—		2
Other comprehensive income	—		1		—		2
End of period balance	(203)		(33)		(203)		(33)
Total beginning of period accumulated other comprehensive income (loss)	(858)		(969)		(1,264)		965
Adoption of new accounting standard (1)	—		—		—		(631)
Total other comprehensive income (loss)	(146)		(385)		260		(1,688)
Total end of period accumulated other comprehensive loss	$	(1,004)	$	(1,354)	$	(1,004)	$	(1,354)

_____________________________________________

(1)Reflects the adoption of ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the nine months ended September 30, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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

(3)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 $15 million net of tax, in net gains associated with its cash flow hedges into net income within the next 12 months.

(4)Amounts reclassified from accumulated other comprehensive loss for specifically identified pension and other postretirement benefits are included in other income in the unaudited condensed consolidated statements of operations.

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Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

The following is a reconciliation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions, except per share amounts	2023		2022		2023		2022
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health	$	2,261	$	(3,406)	$	6,298	$	1,977
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic	1,287		1,315		1,284		1,313
Restricted stock units and performance stock units	2		—		3		6
Stock options and stock appreciation rights	1		—		2		5
Weighted average shares, diluted	1,290		1,315		1,289		1,324
Earnings (loss) per share:
Basic	$	1.76	$	(2.59)	$	4.90	$	1.51
Diluted	$	1.75	$	(2.59)	$	4.88	$	1.49

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Summarized Financial Information Of Segments

The impact of these items on segment financial information for the three and nine months ended September 30, 2022 is reflected in the “Adjustments” lines of the table included on the next page.

	Three Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	22,511	$	43,216	$	26,706	$	142	$	(11,416)	$	81,159
Adjustments	(15)		38		531		—		(554)		—
Total revenues, as adjusted	$	22,496	$	43,254	$	27,237	$	142	$	(11,970)	$	81,159
Adjusted operating income (loss), as previously reported	$	1,544	$	1,877	$	1,398	$	(417)	$	(169)	$	4,233
Adjustments	97		(182)		3		29		169		116
Adjusted operating income (loss), as adjusted	$	1,641	$	1,695	$	1,401	$	(388)	$	—	$	4,349
	Nine Months Ended September 30, 2022
In millions	Health Care Benefits		Health Services		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (1)		Consolidated Totals
Total revenues, as previously reported	$	68,376	$	125,489	$	78,410	$	378	$	(34,032)	$	238,621
Adjustments	(45)		318		1,471		—		(1,744)		—
Total revenues, as adjusted	$	68,331	$	125,807	$	79,881	$	378	$	(35,776)	$	238,621
Adjusted operating income (loss), as previously reported	$	5,126	$	5,368	$	4,865	$	(1,277)	$	(556)	$	13,526
Adjustments	299		(372)		(181)		130		556		432
Adjusted operating income (loss), as adjusted	$	5,425	$	4,996	$	4,684	$	(1,147)	$	—	$	13,958

_____________________________________________

(1)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment. Prior to January 1, 2023, intersegment adjusted operating income eliminations occurred when members of the Health Services segment’s clients enrolled in Maintenance Choice elected to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail. When this occurred, both the Health Services and Pharmacy & Consumer Wellness segments recorded the adjusted operating income on a stand-alone basis. Effective January 1, 2023, the adjusted operating income associated with such transactions is reported only in the Pharmacy & Consumer Wellness segment, therefore no adjusted operating income elimination is required. Prior period financial information has been recast to conform with current period presentation.

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

In millions	Health Care Benefits		Health  Services (1)		Pharmacy & Consumer Wellness		Corporate/ Other		Intersegment Eliminations (2)		Consolidated Totals
Three Months Ended
September 30, 2023
Revenues from external customers	$	26,089	$	44,064	$	19,321	$	13	$	—	$	89,487
Intersegment revenues	20		2,827		9,553		—		(12,400)		—
Net investment income (loss)	187		—		(2)		92		—		277
Total revenues	26,296		46,891		28,872		105		(12,400)		89,764
Adjusted operating income (loss)	1,536		1,878		1,389		(347)		—		4,456
September 30, 2022
Revenues from external customers	$	22,375	$	40,544	$	18,007	$	32	$	—	$	80,958
Intersegment revenues	20		2,710		9,240		—		(11,970)		—
Net investment income (loss)	101		—		(10)		110		—		201
Total revenues	22,496		43,254		27,237		142		(11,970)		81,159
Adjusted operating income (loss)	1,641		1,695		1,401		(388)		—		4,349
Nine Months Ended
September 30, 2023
Revenues from external customers	$	78,302	$	127,907	$	56,826	$	43	$	—	$	263,078
Intersegment revenues	62		9,790		28,756		—		(38,608)		—
Net investment income (loss)	556		—		(4)		333		—		885
Total revenues	78,920		137,697		85,578		376		(38,608)		263,963
Adjusted operating income (loss)	4,901		5,452		3,936		(982)		—		13,307
September 30, 2022
Revenues from external customers	$	67,993	$	116,801	$	53,215	$	97	$	—	$	238,106
Intersegment revenues	60		9,006		26,710		—		(35,776)		—
Net investment income (loss)	278		—		(44)		281		—		515
Total revenues	68,331		125,807		79,881		378		(35,776)		238,621
Adjusted operating income (loss)	5,425		4,996		4,684		(1,147)		—		13,958

_____________________________________________

(1)Total revenues of the Health Services segment include approximately $3.2 billion and $2.9 billion of retail co-payments for the three months ended September 30, 2023 and 2022, respectively. Total revenues of the Health Services segment include approximately $10.7 billion and $9.8 billion of retail co-payments for the nine months ended September 30, 2023 and 2022, respectively.

(2)Intersegment revenue eliminations relate to intersegment revenue generating activities that occur between the Health Care Benefits segment, the Health Services segment, and/or the Pharmacy & Consumer Wellness segment.

Reconciliation of Consolidated Operating Income to Adjusted Operating Income

The following are reconciliations of consolidated operating income (loss) to adjusted operating income for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2023		2022		2023		2022
Operating income (loss) (GAAP measure)	$	3,690	$	(3,919)	$	10,370	$	4,295
Amortization of intangible assets (1)	509		458		1,396		1,380
Net realized capital losses (2)	142		110		345		283
Acquisition-related transaction and integration costs (3)	94		—		294		—
Restructuring charges (4)	11		—		507		—
Office real estate optimization charges (5)	10		—		46		—
Loss on assets held for sale (6)	—		2,480		349		2,521
Opioid litigation charges (7)	—		5,220		—		5,704
Gain on divestiture of subsidiary (8)	—		—		—		(225)
Adjusted operating income	$	4,456	$	4,349	$	13,307	$	13,958

_____________________________________________

(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)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in the unaudited condensed consolidated statements of operations in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do 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. Accordingly, the Company believes excluding net realized capital gains and losses 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.

(3)During the three and nine months ended September 30, 2023, the acquisition-related transaction and integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related transaction and integration costs are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Corporate/Other segment.

(4)During the three months ended September 30, 2023, the restructuring charges are comprised of a stock-based compensation charge. During the nine months ended September 30, 2023, the restructuring charges also include severance and employee-related costs and asset impairment charges. During the second quarter of 2023, the Company developed an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and reduce costs. In connection with the development of this plan and the recently completed acquisitions of Signify Health and Oak Street Health, the Company also conducted a strategic review of its various transformation initiatives and determined that it would terminate certain initiatives. The restructuring charges are reflected within the Corporate/Other segment.

(5)During the three and nine months ended September 30, 2023, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the planned reduction of corporate office real estate space in response to the Company’s new flexible work arrangement. The office real estate optimization charges are reflected in the Company’s unaudited condensed consolidated statements of operations in operating expenses within the Health Care Benefits, Health Services and Corporate/Other segments.

(6)During the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022, the loss on assets held for sale relates to the Company’s LTC reporting unit within the Pharmacy & Consumer Wellness segment. During 2022, the Company determined that its LTC business was no longer a strategic asset and committed to a plan to sell it, at which time the LTC business met the criteria for held-for-sale accounting and its net assets were accounted for as assets held for sale. The carrying value of the LTC business was determined to be greater than its estimated fair value less costs to sell, and, accordingly the Company recorded a loss on assets held for sale during the third quarter of 2022. During the first quarter of 2023, a loss on assets held for sale was recorded to write down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell. As of September 30, 2023, the Company determined the LTC business no longer met the criteria for held-for-sale accounting and accordingly the net assets associated with the LTC business were reclassified to held and used at their respective fair values. During the nine months ended September 30, 2022, the loss on assets held for sale also relates to the Company’s international health care business domiciled in Thailand (“Thailand business”), which was included in the Commercial Business reporting unit in the Health Care Benefits segment. The sale of the Thailand business closed in the second quarter of 2022, and the ultimate loss on the sale was not material.

(7)During the three and nine months ended September 30, 2022, the opioid litigation charges relate to agreements to resolve substantially all opioid claims against the Company by certain states and government entities. The opioid litigation charges are reflected within the Corporate/Other segment.

(8)During the nine months ended September 30, 2022, the gain on divestiture of subsidiary represents the pre-tax gain on the sale of PayFlex Holdings, Inc., which the Company sold on June 1, 2022, for approximately $775 million. The gain on divestiture is reflected as a reduction in operating expenses in the Company’s unaudited condensed consolidated statements of operations within the Health Care Benefits segment.

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Significant Accounting Policies - Narrative (Details) store in Thousands, clinic in Thousands, people in Millions, patient in Millions, $ in Millions		1 Months Ended		3 Months Ended		9 Months Ended
	Jan. 01, 2023 USD ($)	Jan. 31, 2024 state	Jan. 31, 2023 state	Sep. 30, 2023 USD ($) clinic people patient store primaryCareMedicalClinic	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) clinic people patient store Segment state primaryCareMedicalClinic	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Significant Accounting Policies [Line Items]
Number of pharmacy plan members | people				110		110
Number of patients served per year (more than) | patient				1		1
Number of reportable segments | Segment						4
Goodwill impairment	$ 0
Client Health Information Network Services, Fees Expensed
Significant Accounting Policies [Line Items]
Transactions with related party				$ 12	$ 16	$ 44	$ 47
Pharmaceutical Inventory Purchases, Payments Received
Significant Accounting Policies [Line Items]
Transactions with related party				5	$ 22	34	$ 66
Other Insurance Liabilities
Significant Accounting Policies [Line Items]
Liability for future policy benefits				366		366		$ 334
Other Long-Term Insurance Liabilities
Significant Accounting Policies [Line Items]
Liability for future policy benefits				$ 4,400		$ 4,400		$ 4,700
Pharmacy & Consumer Wellness
Significant Accounting Policies [Line Items]
Number of retail locations (more than) | store				9		9
Health Services
Significant Accounting Policies [Line Items]
Number of walk in medical clinics (more than) | clinic				1		1
Number of primary care medical clinics | primaryCareMedicalClinic				192		192
Health Care Benefits
Significant Accounting Policies [Line Items]
Number of people served (more than) | people				35		35
Number of states in which the Company has entered the individual public health insurance exchange | state						8
Additional number of states in which the Company entered the individual public health insurance exchange | state			4
Health Care Benefits | Forecast
Significant Accounting Policies [Line Items]
Additional number of states in which the Company entered the individual public health insurance exchange | state		5

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Significant Accounting Policies - Cash and Cash Equivalents, Restricted Cash and Cash Equivalents (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 13,043	$ 12,945
Restricted cash (included in other current assets)	96	144
Restricted cash (included in other assets)	236	216
Total cash, cash equivalents and restricted cash in the statements of cash flows	$ 13,375	$ 13,305	$ 17,563	$ 12,691

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Significant Accounting Policies - Accounts Receivable (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Trade receivables	$ 10,424	$ 8,983
Vendor and manufacturer receivables	16,646	12,395
Premium receivables	3,254	2,676
Other receivables	2,603	3,449
Total accounts receivable, net	32,927	27,503
Allowance for credit losses	$ 357	333
Disposal Group, Held-for-sale, Not Discontinued Operations
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable, net		$ 227

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Significant Accounting Policies - Deferred Acquisition Costs (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward]
Deferred acquisition costs, beginning of the period	$ 1,219	$ 879
Capitalizations	414	423
Amortization expense	(196)	(163)
Deferred acquisition costs, end of the period	$ 1,437	$ 1,139

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Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 89,487	$ 80,958	$ 263,078	$ 238,106
Net investment income (loss)	277	201	885	515
Total revenues	89,764	81,159	263,963	238,621
Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	56,198	52,375	164,045	151,191
Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,371	5,581	16,597	16,630
Premiums
Disaggregation of Revenue [Line Items]
Revenues	24,657	21,003	74,117	63,894
Other
Disaggregation of Revenue [Line Items]
Revenues	3,261	1,999	8,319	6,391
Operating Segments | Health Care Benefits
Disaggregation of Revenue [Line Items]
Revenues	26,089	22,375	78,302	67,993
Net investment income (loss)	187	101	556	278
Total revenues	26,296	22,496	78,920	68,331
Operating Segments | Health Care Benefits | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Care Benefits | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Care Benefits | Premiums
Disaggregation of Revenue [Line Items]
Revenues	24,645	20,989	74,079	63,848
Operating Segments | Health Care Benefits | Other
Disaggregation of Revenue [Line Items]
Revenues	1,464	1,406	4,285	4,205
Operating Segments | Health Services
Disaggregation of Revenue [Line Items]
Revenues	44,064	40,544	127,907	116,801
Net investment income (loss)	0	0	0	0
Total revenues	46,891	43,254	137,697	125,807
Operating Segments | Health Services | Pharmacy network
Disaggregation of Revenue [Line Items]
Total revenues	27,981	26,334	83,050	76,358
Operating Segments | Health Services | Mail & specialty
Disaggregation of Revenue [Line Items]
Total revenues	17,004	16,318	50,378	47,269
Operating Segments | Health Services | Other
Disaggregation of Revenue [Line Items]
Total revenues	1,906	602	4,269	2,180
Operating Segments | Health Services | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	44,985	42,652	133,428	123,627
Operating Segments | Health Services | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Services | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Health Services | Other
Disaggregation of Revenue [Line Items]
Revenues	1,906	602	4,269	2,180
Operating Segments | Pharmacy & Consumer Wellness
Disaggregation of Revenue [Line Items]
Revenues	19,321	18,007	56,826	53,215
Net investment income (loss)	(2)	(10)	(4)	(44)
Total revenues	28,872	27,237	85,578	79,881
Operating Segments | Pharmacy & Consumer Wellness | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	22,977	21,084	67,371	61,496
Operating Segments | Pharmacy & Consumer Wellness | Front Store
Disaggregation of Revenue [Line Items]
Revenues	5,371	5,581	16,597	16,630
Operating Segments | Pharmacy & Consumer Wellness | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Operating Segments | Pharmacy & Consumer Wellness | Other
Disaggregation of Revenue [Line Items]
Revenues	526	582	1,614	1,799
Corporate/ Other | Corporate/ Other
Disaggregation of Revenue [Line Items]
Revenues	13	32	43	97
Net investment income (loss)	92	110	333	281
Total revenues	105	142	376	378
Corporate/ Other | Corporate/ Other | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate/ Other | Corporate/ Other | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Corporate/ Other | Corporate/ Other | Premiums
Disaggregation of Revenue [Line Items]
Revenues	12	14	38	46
Corporate/ Other | Corporate/ Other | Other
Disaggregation of Revenue [Line Items]
Revenues	1	18	5	51
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Net investment income (loss)	0	0	0	0
Total revenues	(12,400)	(11,970)	(38,608)	(35,776)
Intersegment Eliminations | Pharmacy
Disaggregation of Revenue [Line Items]
Revenues	(11,764)	(11,361)	(36,754)	(33,932)
Intersegment Eliminations | Front Store
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Intersegment Eliminations | Premiums
Disaggregation of Revenue [Line Items]
Revenues	0	0	0	0
Intersegment Eliminations | Other
Disaggregation of Revenue [Line Items]
Revenues	$ (636)	$ (609)	$ (1,854)	$ (1,844)

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Significant Accounting Policies - Receivables and Contracted Balances (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Trade receivables (included in accounts receivable, net)	$ 10,424	$ 8,983
Contract liabilities (included in accrued expenses)	$ 167	$ 71	$ 74	$ 87

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Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Change in Contract with Customer, Liability [Roll Forward]
Contract liabilities, beginning of the period	$ 71	$ 87
Rewards earnings and gift card issuances	250	250
Redemption and breakage	(267)	(263)
Acquired contract liabilities	109	0
Other	4	0
Contract liabilities, end of the period	$ 167	$ 74

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Significant Accounting Policies - New Accounting Pronouncements Recently Adopted (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Jan. 01, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to accumulated other comprehensive income (loss)	$ 1,004	$ 1,264
Adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to accumulated other comprehensive income (loss)		$ (201)
Accounting Standards Update 2018-12 | Adjustments
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Liability for future policy benefits			$ 986
Reduction to accumulated other comprehensive income (loss), before tax			986
Liability for future policy benefits, after tax			766
Reduction to accumulated other comprehensive income (loss)			$ 766

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Significant Accounting Policies - Changes in balances of long-duration insurance liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Large Case Pensions
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance	$ 2,051		$ 2,283		$ 3,647
Add: Reinsurance recoverable	0		0		0
Effect of changes in cash flow assumptions		$ 0		$ 0
Liability for future policy benefits, end of period - current discount rate	2,051	2,253	2,283	3,034	3,647
Large Case Pensions | As Reported
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance					3,224
Add: Reinsurance recoverable					0
Liability for future policy benefits, beginning of period - current discount rate					3,224
Large Case Pensions | Change in discount rate assumptions
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					604
Large Case Pensions | Removal of shadow adjustments in accumulated other comprehensive income
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					(181)
Long-Term Care
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance	1,205		1,230		1,695
Add: Reinsurance recoverable	0		0		0
Effect of changes in cash flow assumptions		0		99
Liability for future policy benefits, end of period - current discount rate	$ 1,484	$ 1,566	$ 1,528	$ 1,991	1,695
Long-Term Care | As Reported
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance					1,142
Add: Reinsurance recoverable					0
Liability for future policy benefits, beginning of period - current discount rate					1,142
Long-Term Care | Change in discount rate assumptions
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					553
Long-Term Care | Removal of shadow adjustments in accumulated other comprehensive income
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					0
Other
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance					490
Add: Reinsurance recoverable					308
Liability for future policy benefits, end of period - current discount rate					798
Other | As Reported
Present value of expected future policy benefits
Balance at December 31, 2020, net of reinsurance					480
Add: Reinsurance recoverable					274
Liability for future policy benefits, beginning of period - current discount rate					754
Other | Change in discount rate assumptions
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					44
Other | Removal of shadow adjustments in accumulated other comprehensive income
Present value of expected future policy benefits
Effect of changes in cash flow assumptions					$ 0

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Significant Accounting Policies - Adjustments Resulting From Applying New Accounting Standard (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Condensed Consolidated Statement of Operations:
Health care costs	$ 21,499			$ 17,401			$ 63,729	$ 52,814
Operating expenses	9,876			9,612			29,329	28,123
Total operating costs	86,074			85,078			253,593	234,326
Operating loss	3,690			(3,919)			10,370	4,295
Loss before income tax benefit	3,019			(4,444)			8,468	2,686
Income tax provision (benefit)	754			(1,045)			2,147	691
Net income (loss)	2,265	$ 1,914	$ 2,142	(3,399)	$ 3,039	$ 2,355	6,321	1,995
Net loss attributable to CVS Health	$ 2,261			$ (3,406)			$ 6,298	$ 1,977
Net income (loss) per share attributable to CVS Health:
Basic (in dollars per share)	$ 1.76			$ (2.59)			$ 4.90	$ 1.51
Diluted (in dollars per share)	$ 1.75			$ (2.59)			$ 4.88	$ 1.49
Condensed Consolidated Balance Sheet:
Other current assets	$ 3,074						$ 3,074		$ 2,636
Total current assets	70,143						70,143		65,633
Intangible assets, net	29,624						29,624		24,803
Total assets	251,306						251,306		228,275
Health care costs payable	12,550						12,550		10,142
Other insurance liabilities	4,748						4,748		1,089
Total current liabilities	81,553						81,553		69,421
Deferred income taxes	4,250						4,250		4,016
Other long-term insurance liabilities	5,333						5,333		5,835
Other long-term liabilities	6,237						6,237		6,730
Total liabilities	176,796						176,796		156,506
Retained earnings	60,343						60,343		56,398
Accumulated other comprehensive loss	(1,004)						(1,004)		(1,264)
Total CVS Health shareholders’ equity	74,337						74,337		71,469
Total shareholders’ equity	74,510	$ 73,002	$ 71,580	$ 71,487	$ 75,736	$ 74,034	74,510	$ 71,487	71,769	$ 75,381
Total liabilities and shareholders’ equity	$ 251,306						251,306		228,275
Condensed Consolidated Statement of Cash Flows:
Depreciation and amortization							3,232	3,181
Deferred income taxes and other noncash items							(360)	(2,213)
Other assets							(518)	(244)
Health care costs payable and other insurance liabilities							4,679	4,476
Other liabilities							$ 2,047	7,371
As Reported
Condensed Consolidated Statement of Operations:
Health care costs				17,419				52,976
Operating expenses				9,606				28,128
Total operating costs				85,090				234,493
Operating loss				(3,931)				4,128
Loss before income tax benefit				(4,456)				2,519
Income tax provision (benefit)				(1,047)				654
Net income (loss)				(3,409)				1,865
Net loss attributable to CVS Health				$ (3,416)				$ 1,847
Net income (loss) per share attributable to CVS Health:
Basic (in dollars per share)				$ (2.60)				$ 1.41
Diluted (in dollars per share)				$ (2.60)				$ 1.40
Condensed Consolidated Balance Sheet:
Other current assets									2,685
Total current assets									65,682
Intangible assets, net									24,754
Total assets									228,275
Health care costs payable									10,406
Other insurance liabilities									1,140
Total current liabilities									69,736
Deferred income taxes									3,880
Other long-term insurance liabilities									6,108
Other long-term liabilities									6,732
Total liabilities									156,960
Retained earnings									56,145
Accumulated other comprehensive loss									(1,465)
Total CVS Health shareholders’ equity									71,015
Total shareholders’ equity									71,315
Total liabilities and shareholders’ equity									228,275
Condensed Consolidated Statement of Cash Flows:
Depreciation and amortization								$ 3,198
Deferred income taxes and other noncash items								(2,250)
Other assets								(311)
Health care costs payable and other insurance liabilities								4,687
Other liabilities								7,377
Adoption of new accounting standard, adjustment
Condensed Consolidated Statement of Operations:
Health care costs				$ (18)				(162)
Operating expenses				6				(5)
Total operating costs				(12)				(167)
Operating loss				12				167
Loss before income tax benefit				12				167
Income tax provision (benefit)				2				37
Net income (loss)				10				130
Net loss attributable to CVS Health				$ 10				$ 130
Net income (loss) per share attributable to CVS Health:
Basic (in dollars per share)				$ 0.01				$ 0.10
Diluted (in dollars per share)				$ 0.01				$ 0.09
Condensed Consolidated Balance Sheet:
Other current assets									(49)
Total current assets									(49)
Intangible assets, net									49
Total assets									0
Health care costs payable									(264)
Other insurance liabilities									(51)
Total current liabilities									(315)
Deferred income taxes									136
Other long-term insurance liabilities									(273)
Other long-term liabilities									(2)
Total liabilities									(454)
Retained earnings									253
Accumulated other comprehensive loss									201
Total CVS Health shareholders’ equity									454
Total shareholders’ equity									454	$ (540)	[1]
Total liabilities and shareholders’ equity									$ 0
Condensed Consolidated Statement of Cash Flows:
Depreciation and amortization								$ (17)
Deferred income taxes and other noncash items								37
Other assets								67
Health care costs payable and other insurance liabilities								(211)
Other liabilities								$ (6)

[1] Reflects the adoption of Accounting Standards Update (“ASU”) 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the three months ended March 31, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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Acquisitions and Assets Held for Sale - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions				1 Months Ended	3 Months Ended			5 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Jun. 02, 2023	May 01, 2023	Feb. 21, 2023	Feb. 28, 2023	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	May 02, 2023	Mar. 29, 2023
Business Acquisition [Line Items]
Proceeds from debt	$ 4,900	$ 5,000	$ 6,000	$ 6,000
Amortization of intangible assets					$ 509		$ 458			$ 1,396	$ 1,380
Loss on assets held for sale					$ 0		$ 2,480			349	$ 2,521
Disposal Group, Held-for-sale, Not Discontinued Operations | Omnicare Long-Term Care Business | Pharmacy & Consumer Wellness
Business Acquisition [Line Items]
Loss on assets held for sale						$ 349						$ 2,500
Oak Street Health Inc.
Business Acquisition [Line Items]
Percentage of voting interests acquired													100.00%
Cash to be received by shareholders in proposed acquisition (in dollars per share)													$ 39.00
Deferred income taxes													$ 773
Revenues since acquisition date								$ 1,300
Operating losses since acquisition date								304
Amortization of intangible assets								121
Stock-based compensation								$ 51
Transaction costs										77
Signify Health, Inc.
Business Acquisition [Line Items]
Percentage of voting interests acquired														100.00%
Cash to be received by shareholders in proposed acquisition (in dollars per share)														$ 30.50
Deferred income taxes														$ 272
Revenues since acquisition date									$ 528
Transaction costs										$ 37
Goodwill deductible for income tax purposes														$ 1,700

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Acquisitions and Assets Held for Sale - Schedule of Fair Value of Consideration Transferred (Details) - USD ($) shares in Millions, $ in Millions	May 02, 2023	Mar. 29, 2023
Oak Street Health Inc.
Business Acquisition [Line Items]
Cash	$ 9,579
Effective settlement of pre-existing relationship	(29)
Total consideration transferred	9,668
Oak Street Health Inc. | Pre-combination services
Business Acquisition [Line Items]
Fair value of replacement equity awards for pre-combination services	$ 118
Replacement equity awards for pre-combination services (in shares)	3.9
Oak Street Health Inc. | Post-combination services
Business Acquisition [Line Items]
Fair value of replacement equity awards for pre-combination services	$ 165
Signify Health, Inc.
Business Acquisition [Line Items]
Cash		$ 7,450
Effective settlement of pre-existing relationship		(111)
Total consideration transferred		7,353
Signify Health, Inc. | Pre-combination services
Business Acquisition [Line Items]
Fair value of replacement equity awards for pre-combination services		$ 14
Replacement equity awards for pre-combination services (in shares)		3.2
Signify Health, Inc. | Post-combination services
Business Acquisition [Line Items]
Fair value of replacement equity awards for pre-combination services		$ 167

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Acquisitions and Assets Held for Sale - Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Sep. 30, 2023	May 02, 2023	Mar. 29, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 91,261			$ 78,150
Oak Street Health Inc.
Business Acquisition [Line Items]
Cash and cash equivalents		$ 201
Investments		168
Accounts receivable		1,143
Other current assets (including restricted cash)		46
Property and equipment		180
Operating lease right-of-use assets		316
Goodwill		7,189
Intangible assets		4,233
Other long-term assets		7
Total assets acquired		13,483
Health care costs payable		1,098
Other current liabilities		443
Operating lease liabilities (current and long-term)		378
Debt (current and long-term)		1,028
Deferred income taxes		773
Other long-term liabilities		29
Total liabilities assumed		3,749
Noncontrolling interests		66
Total consideration transferred		$ 9,668
Signify Health, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents			$ 376
Accounts receivable			190
Other current assets (including restricted cash)			147
Property and equipment			25
Goodwill			5,922
Intangible assets			1,920
Other long-term assets			23
Total assets acquired			8,603
Other current liabilities			606
Debt (current and long-term)			346
Deferred income taxes			272
Other long-term liabilities			26
Total liabilities assumed			1,250
Total consideration transferred			7,353
Restricted cash			$ 28

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Acquisitions and Assets Held for Sale - Summary of the Preliminary Valuation of Goodwill Allocated to Business Segments (Details) - USD ($) $ in Millions	Sep. 30, 2023	May 02, 2023	Mar. 29, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Goodwill	$ 91,261			$ 78,150
Oak Street Health Inc.
Business Acquisition [Line Items]
Goodwill		$ 7,189
Oak Street Health Inc. | Health Services
Business Acquisition [Line Items]
Goodwill		6,912
Oak Street Health Inc. | Pharmacy & Consumer Wellness
Business Acquisition [Line Items]
Goodwill		156
Oak Street Health Inc. | Health Care Benefits
Business Acquisition [Line Items]
Goodwill		$ 121
Signify Health, Inc.
Business Acquisition [Line Items]
Goodwill			$ 5,922
Signify Health, Inc. | Health Services
Business Acquisition [Line Items]
Goodwill			3,419
Signify Health, Inc. | Pharmacy & Consumer Wellness
Business Acquisition [Line Items]
Goodwill			30
Signify Health, Inc. | Health Care Benefits
Business Acquisition [Line Items]
Goodwill			$ 2,473

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Acquisitions and Assets Held for Sale - Summary of Preliminary Fair Values and Weighted Average Useful Lives for Intangible Assets Acquired (Details) - USD ($) $ in Millions	May 02, 2023	Mar. 29, 2023
Oak Street Health Inc.
Business Acquisition [Line Items]
Gross Fair Value	$ 4,233
Weighted Average Useful Life (years)	18 years
Oak Street Health Inc. | Customer Relationships
Business Acquisition [Line Items]
Gross Fair Value	$ 3,620
Weighted Average Useful Life (years)	19 years 10 months 24 days
Oak Street Health Inc. | Technology
Business Acquisition [Line Items]
Gross Fair Value	$ 143
Weighted Average Useful Life (years)	3 years
Oak Street Health Inc. | Trademarks
Business Acquisition [Line Items]
Gross Fair Value	$ 470
Weighted Average Useful Life (years)	8 years
Signify Health, Inc.
Business Acquisition [Line Items]
Gross Fair Value		$ 1,920
Weighted Average Useful Life (years)		16 years
Signify Health, Inc. | Customer Relationships
Business Acquisition [Line Items]
Gross Fair Value		$ 1,810
Weighted Average Useful Life (years)		16 years 8 months 12 days
Signify Health, Inc. | Technology
Business Acquisition [Line Items]
Gross Fair Value		$ 50
Weighted Average Useful Life (years)		3 years
Signify Health, Inc. | Trademarks
Business Acquisition [Line Items]
Gross Fair Value		$ 60
Weighted Average Useful Life (years)		5 years

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Restructuring Program - Narrative (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Restructuring and Related Activities [Abstract]
Restructuring charges	$ 11	$ 496	$ 0	$ 507	$ 0
Severance and employee-related costs	11	344
Asset impairment charges		$ 152
Payments related to severance and employee-related costs	$ 58

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Investments - Total Investment Schedule (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Total Investments [Line Items]
Current	$ 3,145	$ 2,778
Long-term	21,667	21,113
Total	24,812	23,891
Disposal Group, Held-for-sale, Not Discontinued Operations
Total Investments [Line Items]
Long-term		17
Debt securities available for sale
Total Investments [Line Items]
Current	3,027	2,718
Long-term	17,374	17,562
Total	20,401	20,280
Mortgage loans
Total Investments [Line Items]
Current	116	55
Long-term	1,157	989
Total	1,273	1,044
Other investments
Total Investments [Line Items]
Current	2	5
Long-term	3,136	2,562
Total	$ 3,138	$ 2,567

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Investments - Debt Securities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	$ 22,102	$ 22,067
Allowance for Credit Losses	(1)	(4)
Net Amortized Cost	22,101	22,063
Gross Unrealized Gains	35	57
Gross Unrealized Losses	(1,735)	(1,840)
Fair Value	20,401	20,280
Supporting experience-rated products
Debt Securities, Available-for-sale [Line Items]
Gross Unrealized Gains	2	3
Gross Unrealized Losses	(63)	(59)
Fair Value	560	609
U.S. government securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,092	2,074
Allowance for Credit Losses	0	0
Net Amortized Cost	2,092	2,074
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(171)	(182)
Fair Value	1,921	1,892
States, municipalities and political subdivisions
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,277	2,393
Allowance for Credit Losses	0	0
Net Amortized Cost	2,277	2,393
Gross Unrealized Gains	1	8
Gross Unrealized Losses	(151)	(129)
Fair Value	2,127	2,272
U.S. corporate securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	10,062	9,838
Allowance for Credit Losses	0	(3)
Net Amortized Cost	10,062	9,835
Gross Unrealized Gains	12	26
Gross Unrealized Losses	(879)	(903)
Fair Value	9,195	8,958
Foreign securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	2,621	2,780
Allowance for Credit Losses	(1)	(1)
Net Amortized Cost	2,620	2,779
Gross Unrealized Gains	9	15
Gross Unrealized Losses	(233)	(244)
Fair Value	2,396	2,550
Residential mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	833	845
Allowance for Credit Losses	0	0
Net Amortized Cost	833	845
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(103)	(89)
Fair Value	730	757
Commercial mortgage-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	1,128	1,172
Allowance for Credit Losses	0	0
Net Amortized Cost	1,128	1,172
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(151)	(155)
Fair Value	977	1,018
Other asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	3,069	2,940
Allowance for Credit Losses	0	0
Net Amortized Cost	3,069	2,940
Gross Unrealized Gains	13	6
Gross Unrealized Losses	(46)	(136)
Fair Value	3,036	2,810
Redeemable preferred securities
Debt Securities, Available-for-sale [Line Items]
Gross Amortized Cost	20	25
Allowance for Credit Losses	0	0
Net Amortized Cost	20	25
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(1)	(2)
Fair Value	$ 19	$ 23

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Investments - Debt Securities by Maturity (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Net Amortized Cost
Less than one year	$ 1,273
One year through five years	7,413
After five years through ten years	4,279
Greater than ten years	4,106
Net Amortized Cost	22,101	$ 22,063
Fair Value
Less than one year	1,254
One year through five years	6,995
After five years through ten years	3,891
Greater than ten years	3,518
Total	20,401	20,280
Residential mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	833
Net Amortized Cost	833	845
Fair Value
Debt securities, maturity, without single maturity date	730
Total	730	757
Commercial mortgage-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	1,128
Net Amortized Cost	1,128	1,172
Fair Value
Debt securities, maturity, without single maturity date	977
Total	977	1,018
Other asset-backed securities
Net Amortized Cost
Debt securities, maturity, without single maturity date	3,069
Net Amortized Cost	3,069	2,940
Fair Value
Debt securities, maturity, without single maturity date	3,036
Total	$ 3,036	$ 2,810

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Investments - Unrealized Loss Position (Details) $ in Millions	Sep. 30, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Number of Securities
Number of Securities, Less than 12 months | security	4,515	9,500
Number of Securities, Greater than 12 months | security	7,900	2,784
Number of Securities | security	12,415	12,284
Fair Value
Fair Value, Less than 12 months	$ 6,501	$ 14,228
Fair Value, Greater than 12 months	11,675	4,264
Fair Value	18,176	18,492
Unrealized Losses
Unrealized Losses, Less than 12 months	234	1,226
Unrealized Losses, Greater than 12 months	1,501	614
Unrealized Losses	$ 1,735	$ 1,840
U.S. government securities
Number of Securities
Number of Securities, Less than 12 months | security	143	519
Number of Securities, Greater than 12 months | security	370	35
Number of Securities | security	513	554
Fair Value
Fair Value, Less than 12 months	$ 393	$ 1,620
Fair Value, Greater than 12 months	1,250	191
Fair Value	1,643	1,811
Unrealized Losses
Unrealized Losses, Less than 12 months	12	164
Unrealized Losses, Greater than 12 months	159	18
Unrealized Losses	$ 171	$ 182
States, municipalities and political subdivisions
Number of Securities
Number of Securities, Less than 12 months | security	614	859
Number of Securities, Greater than 12 months | security	634	196
Number of Securities | security	1,248	1,055
Fair Value
Fair Value, Less than 12 months	$ 1,003	$ 1,370
Fair Value, Greater than 12 months	939	322
Fair Value	1,942	1,692
Unrealized Losses
Unrealized Losses, Less than 12 months	36	95
Unrealized Losses, Greater than 12 months	115	34
Unrealized Losses	$ 151	$ 129
U.S. corporate securities
Number of Securities
Number of Securities, Less than 12 months | security	2,619	5,193
Number of Securities, Greater than 12 months | security	4,427	1,479
Number of Securities | security	7,046	6,672
Fair Value
Fair Value, Less than 12 months	$ 2,903	$ 6,537
Fair Value, Greater than 12 months	5,688	1,822
Fair Value	8,591	8,359
Unrealized Losses
Unrealized Losses, Less than 12 months	127	622
Unrealized Losses, Greater than 12 months	752	281
Unrealized Losses	$ 879	$ 903
Foreign securities
Number of Securities
Number of Securities, Less than 12 months | security	565	1,168
Number of Securities, Greater than 12 months | security	1,064	403
Number of Securities | security	1,629	1,571
Fair Value
Fair Value, Less than 12 months	$ 749	$ 1,715
Fair Value, Greater than 12 months	1,473	592
Fair Value	2,222	2,307
Unrealized Losses
Unrealized Losses, Less than 12 months	28	147
Unrealized Losses, Greater than 12 months	205	97
Unrealized Losses	$ 233	$ 244
Residential mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	88	452
Number of Securities, Greater than 12 months | security	460	91
Number of Securities | security	548	543
Fair Value
Fair Value, Less than 12 months	$ 234	$ 464
Fair Value, Greater than 12 months	496	257
Fair Value	730	721
Unrealized Losses
Unrealized Losses, Less than 12 months	9	39
Unrealized Losses, Greater than 12 months	94	50
Unrealized Losses	$ 103	$ 89
Commercial mortgage-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	83	288
Number of Securities, Greater than 12 months | security	340	187
Number of Securities | security	423	475
Fair Value
Fair Value, Less than 12 months	$ 207	$ 611
Fair Value, Greater than 12 months	668	381
Fair Value	875	992
Unrealized Losses
Unrealized Losses, Less than 12 months	11	69
Unrealized Losses, Greater than 12 months	140	86
Unrealized Losses	$ 151	$ 155
Other asset-backed securities
Number of Securities
Number of Securities, Less than 12 months | security	399	1,008
Number of Securities, Greater than 12 months | security	597	391
Number of Securities | security	996	1,399
Fair Value
Fair Value, Less than 12 months	$ 1,010	$ 1,893
Fair Value, Greater than 12 months	1,144	694
Fair Value	2,154	2,587
Unrealized Losses
Unrealized Losses, Less than 12 months	11	88
Unrealized Losses, Greater than 12 months	35	48
Unrealized Losses	$ 46	$ 136
Redeemable preferred securities
Number of Securities
Number of Securities, Less than 12 months | security	4	13
Number of Securities, Greater than 12 months | security	8	2
Number of Securities | security	12	15
Fair Value
Fair Value, Less than 12 months	$ 2	$ 18
Fair Value, Greater than 12 months	17	5
Fair Value	19	23
Unrealized Losses
Unrealized Losses, Less than 12 months	0	2
Unrealized Losses, Greater than 12 months	1	0
Unrealized Losses	$ 1	$ 2

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Investments - Unrealized Loss Position Maturities (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value
Less than one year	$ 1,048
One year through five years	6,507
After five years through ten years	3,552
Greater than ten years	3,310
Fair Value	18,176	$ 18,492
Unrealized Losses
Less than one year	20
One year through five years	423
After five years through ten years	395
Greater than ten years	597
Unrealized Losses	1,735	1,840
Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	730
Fair Value	730	721
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	103
Unrealized Losses	103	89
Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	875
Fair Value	875	992
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	151
Unrealized Losses	151	155
Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,154
Fair Value	2,154	2,587
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	46
Unrealized Losses	46	$ 136
Supporting experience-rated products
Fair Value
Less than one year	16
One year through five years	151
After five years through ten years	113
Greater than ten years	206
Fair Value	528
Unrealized Losses
Less than one year	1
One year through five years	7
After five years through ten years	14
Greater than ten years	37
Unrealized Losses	63
Supporting experience-rated products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	8
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	1
Supporting experience-rated products | Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	16
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	2
Supporting experience-rated products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	18
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	1
Supporting remaining products
Fair Value
Less than one year	1,032
One year through five years	6,356
After five years through ten years	3,439
Greater than ten years	3,104
Fair Value	17,648
Unrealized Losses
Less than one year	19
One year through five years	416
After five years through ten years	381
Greater than ten years	560
Unrealized Losses	1,672
Supporting remaining products | Residential mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	722
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	102
Supporting remaining products | Commercial mortgage-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	859
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	149
Supporting remaining products | Other asset-backed securities
Fair Value
Debt securities, maturity, without single maturity date, fair value	2,136
Unrealized Losses
Debt securities, maturity, without single maturity date, unrealized losses	$ 45

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Investments - Mortgage Loans (Details) - Commercial Real Estate - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Mortgage Loans on Real Estate [Line Items]
New mortgage loans	$ 63	$ 125	$ 286	$ 305
Mortgage loans fully repaid	17	62	34	136
Mortgage loans foreclosed	$ 0	$ 0	$ 0	$ 0

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Investments - Mortgage Loans Credit Ratings Indicator (Details) - Commercial Real Estate - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 1,273	$ 1,044
1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	12	15
2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	1,235	1,022
5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	26	7
7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2023
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	259
2023 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2023 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	259
2023 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2023 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0
2022
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	344	326
2022 | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2022 | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	344	326
2022 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2022 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2021
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	245	247
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	239	247
2021 | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	6	0
2021 | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	0	0
2020
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	35	36
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	35	36
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	11	11
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	11	11
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
Prior
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	379	424
Prior | 1
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	12	15
Prior | 2 to 4
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	347	402
Prior | 5 and 6
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	20	7
Prior | 7
Mortgage Loans on Real Estate [Line Items]
Mortgage loans	$ 0	$ 0

XML

Investments - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 432	$ 322	$ 1,264	$ 827
Investment expenses	(13)	(11)	(34)	(29)
Net investment income (excluding net realized capital losses)	419	311	1,230	798
Net realized capital losses	(142)	(110)	(345)	(283)
Net investment income	277	201	885	515
Yield-related impairment loss	47	73	108	121
Credit-related impairment loss (reversal of loss)	0	1	(3)	17
Supporting experience-rated products
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Net investment income	8	8	25	26
Debt securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	217	174	612	510
Mortgage loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	16	14	43	38
Other investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 199	$ 134	$ 609	$ 279

XML

Investments - Realized Gains (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Investments [Abstract]
Proceeds from sales	$ 1,171	$ 593	$ 3,503	$ 3,556
Gross realized capital gains	2	3	7	20
Gross realized capital losses	$ 110	$ 28	$ 294	$ 135

XML

Fair Value - Measurement on a Recurring Basis (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 20,401	$ 20,280
U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,921	1,892
States, municipalities and political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,127	2,272
U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	9,195	8,958
Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,396	2,550
Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	730	757
Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	977	1,018
Other asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	3,036	2,810
Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	19	23
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	13,043	12,951
Debt securities	20,401	20,280
Equity securities	270	176
Total	33,714	33,407
Recurring | Disposal Group, Held-for-sale, Not Discontinued Operations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents		6
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	5,159	6,902
Debt securities	1,899	1,860
Equity securities	187	116
Total	7,245	8,878
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	7,884	6,049
Debt securities	18,465	18,351
Equity securities	0	0
Total	26,349	24,400
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Debt securities	37	69
Equity securities	83	60
Total	120	129
Recurring | U.S. government securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,921	1,892
Recurring | U.S. government securities | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	1,899	1,860
Recurring | U.S. government securities | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	22	32
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	2,127	2,272
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	2,127	2,272
Recurring | States, municipalities and political subdivisions | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | U.S. corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	9,195	8,958
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	9,166	8,897
Recurring | U.S. corporate securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	29	61
Recurring | Foreign securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	2,396	2,550
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	2,388	2,542
Recurring | Foreign securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	8	8
Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	730	757
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	730	757
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	977	1,018
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	977	1,018
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	3,036	2,810
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	3,036	2,810
Recurring | Other asset-backed securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	0	0
Recurring | Redeemable preferred securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	19	23
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	19	23
Recurring | Redeemable preferred securities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities	$ 0	$ 0

XML

Fair Value - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Transfers into Level 3	$ 0	$ 0
Transfers out of Level 3	$ 0	$ 0	$ 42	$ 29

XML

Fair Value - Carrying Value and Fair Value Classified by Level (Details) - Nonrecurring - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Carrying Value
Assets:
Mortgage loans	$ 1,273	$ 1,044
Equity securities	519	411
Liabilities:
Investment contracts liabilities with a fixed maturity	1	3
Investment contracts liabilities without a fixed maturity	324	332
Long-term debt	61,914	52,257
Carrying Value | Disposal Group, Held-for-sale, Not Discontinued Operations
Liabilities:
Long-term debt		3
Estimated Fair Value
Assets:
Mortgage loans	1,203	978
Liabilities:
Investment contracts liabilities with a fixed maturity	1	3
Investment contracts liabilities without a fixed maturity	277	305
Long-term debt	54,807	47,653
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	54,807	47,653
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	1,203	978
Liabilities:
Investment contracts liabilities with a fixed maturity	1	3
Investment contracts liabilities without a fixed maturity	277	305
Long-term debt	$ 0	$ 0

XML

Fair Value - Separate Accounts Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 3,200	$ 3,228
Separate accounts liabilities	3,200	3,228	$ 3,318	$ 5,087
Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3,159	3,313
Recurring | Other Receivables
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	41
Recurring | Other Payables
Fair Value, Separate Account Investment [Line Items]
Separate accounts liabilities		85
Recurring | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	153	156
Recurring | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,563	2,677
Recurring | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	443	480
Recurring | Level 1
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	668	714
Recurring | Level 1 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1	2
Recurring | Level 1 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	667	712
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	2,491	2,599
Recurring | Level 2 | Cash and cash equivalents
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	152	154
Recurring | Level 2 | Debt securities
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,896	1,965
Recurring | Level 2 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	443	480
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 | Common/collective trusts
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 0	$ 0

XML

Health Care Costs Payable - Components of Change in Health Care Costs Payable (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period	$ 10,142
Less: Claims paid
Health care costs payable, end of the period	12,550
Health Care Benefits
Less: Claims paid
Benefit costs recorded in other insurance liabilities	62	$ 59
Corporate / Other
Less: Claims paid
Benefit costs recorded in other insurance liabilities	163	204
Health Insurance Product Line
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Health care costs payable, beginning of the period	10,142	8,678
Less: Reinsurance recoverables	5	8
Less: Impact of discount rate on long-duration insurance reserves	8	0
Health care costs payable, beginning of the period, net	10,129	8,670
Acquisitions, net	1,098	0
Add: Components of incurred health care costs
Current year	64,183	53,216
Prior years	(679)	(670)
Total incurred health care costs	63,504	52,546
Less: Claims paid
Current year	52,952	43,632
Prior years	9,207	7,468
Total claims paid	62,159	51,100
Add: Premium deficiency reserve	0	5
Health care costs payable, end of the period, net	12,572	10,121
Add: Reinsurance recoverables	4	5
Add: Impact of discount rate on long-duration insurance reserves	(26)	5
Health care costs payable, end of the period	12,550	10,131
Premium deficiency reserve	$ 0	$ 5

XML

Health Care Costs Payable - Narrative (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Liability for Claims and Claims Adjustment Expense [Line Items]
Incurred but not reported (IBNR) claims liability, net	$ 8,900
Health Insurance Product Line
Liability for Claims and Claims Adjustment Expense [Line Items]
Decrease in prior years' healthcare costs payable	$ 679	$ 670

XML

Other Insurance Liabilities and Separate Accounts - Changes in Liability for Future Policy Benefits (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Large Case Pensions
Present value of expected future policy benefits
Liability for future policy benefits, beginning of period - current discount rate	$ 2,253	$ 3,034
Beginning liability for future policy benefits at original (locked-in) discount rate	2,425	2,650
Effect of changes in cash flow assumptions			$ 0	$ 0
Effect of actual variances from expected experience			1	(26)
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			2,426	2,624
Issuances	8	4
Interest accrual (using locked-in discount rate)	74	80
Benefit payments (actual)	(210)	(220)
Ending liability for future policy benefits at original (locked-in) discount rate	2,298	2,488
Effect of changes in discount rate assumptions	(247)	(205)
Liability for future policy benefits, end of period - current discount rate	2,051	2,283
Net liability for future policy benefits	2,051	2,283
Less: Reinsurance recoverable	0	0			$ 0
Net liability for future policy benefits, net of reinsurance recoverable	2,051	2,283			3,647
Long-Term Care
Present value of expected net premiums
Liability for future policy benefits, beginning of period - current discount rate	300	389
Beginning liability for future policy benefits at original (locked-in) discount rate	302	323
Effect of changes in cash flow assumptions			0	(14)
Effect of actual variances from expected experience			7	13
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			309	322
Interest accrual (using locked-in discount rate)	11	11
Net premiums (actual)	(29)	(30)
Ending liability for future policy benefits at original (locked-in) discount rate	291	303
Effect of changes in discount rate assumptions	(12)	(5)
Liability for future policy benefits, end of period - current discount rate	279	298
Present value of expected future policy benefits
Liability for future policy benefits, beginning of period - current discount rate	1,566	1,991
Beginning liability for future policy benefits at original (locked-in) discount rate	1,613	1,480
Effect of changes in cash flow assumptions			0	99
Effect of actual variances from expected experience			9	15
Adjusted beginning liability for future policy benefits - original (locked-in) discount rate			$ 1,622	$ 1,594
Issuances	0	0
Interest accrual (using locked-in discount rate)	61	60
Benefit payments (actual)	(53)	(48)
Ending liability for future policy benefits at original (locked-in) discount rate	1,630	1,606
Effect of changes in discount rate assumptions	(146)	(78)
Liability for future policy benefits, end of period - current discount rate	1,484	1,528
Net liability for future policy benefits	1,205	1,230
Less: Reinsurance recoverable	0	0			0
Net liability for future policy benefits, net of reinsurance recoverable	$ 1,205	$ 1,230			$ 1,695

XML

Other Insurance Liabilities and Separate Accounts - Undiscounted Expected Gross Premiums and Expected Future Benefit Payments (Details) - USD ($) $ in Millions	Sep. 30, 2023	Sep. 30, 2022
Large Case Pensions
Liability for Future Policy Benefit, Activity [Line Items]
Expected future benefit payments	$ 3,337	$ 3,622
Expected gross premiums	0	0
Long-Term Care
Liability for Future Policy Benefit, Activity [Line Items]
Expected future benefit payments	3,237	3,269
Expected gross premiums	$ 419	$ 439

XML

Other Insurance Liabilities and Separate Accounts - Weighted-average Interest Rates and Durations (Details)	Sep. 30, 2023	Sep. 30, 2022
Large Case Pensions
Liability for Future Policy Benefit, Activity [Line Items]
Interest accretion rate	4.20%	4.20%
Current discount rate	5.86%	5.42%
Weighted-average duration of long-duration insurance liabilities	7 years 4 months 24 days	7 years 4 months 24 days
Long-Term Care
Liability for Future Policy Benefit, Activity [Line Items]
Interest accretion rate	5.11%	5.11%
Current discount rate	5.99%	5.65%
Weighted-average duration of long-duration insurance liabilities	12 years 2 months 12 days	12 years 9 months 18 days

XML

Other Insurance Liabilities and Separate Accounts - Roll Forward of Policyholders' Funds (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Policyholder Account Balance [Roll Forward]
Policyholders’ funds, beginning of the period	$ 345	$ 522
Deposits received	1	10
Policy charges	(2)	(1)
Surrenders and withdrawals	(23)	(27)
Interest credited	9	10
Change in net unrealized losses	(4)	(163)
Other	(23)	(18)
Policyholders’ funds, end of the period	$ 303	$ 333
Weighted average crediting rate	4.40%	4.80%
Net amount at risk	$ 0	$ 0
Cash surrender value	$ 324	$ 337

XML

Other Insurance Liabilities and Separate Accounts - Separate Account Assets (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 3,200	$ 3,228
Separate accounts liabilities	3,200	3,228	$ 3,318	$ 5,087
Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	3,159	3,313
Other Receivables | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	41
Other Payables | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts liabilities		85
Cash and cash equivalents | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	153	156
Debt securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	2,563	2,677
Debt securities | U.S. government securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	671	717
Debt securities | States, municipalities and political subdivisions | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	26	27
Debt securities | U.S. corporate securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	1,610	1,667
Debt securities | Foreign securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	198	201
Mortgage-backed securities | Residential mortgage-backed securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	37	41
Mortgage-backed securities | Commercial mortgage-backed securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	6	6
Other asset-backed securities | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	15	18
Common/collective trusts | Recurring
Fair Value, Separate Account Investment [Line Items]
Separate accounts assets	$ 443	$ 480

XML

Other Insurance Liabilities and Separate Accounts - Roll Forward of Separate Accounts (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Separate Account, Liability [Roll Forward]
Separate Accounts liability, beginning of the period	$ 3,228	$ 5,087
Premiums and deposits	657	636
Surrenders and withdrawals	(7)	(576)
Benefit payments	(714)	(711)
Investment (earnings) losses	42	(1,057)
Net transfers from general account	4	7
Other	(10)	(68)
Separate Accounts liability, end of the period	3,200	3,318
Cash surrender value, end of the period	$ 2,136	$ 2,153

XML

Borrowings - Schedule of Borrowings (Details) - USD ($) $ in Millions	Sep. 30, 2023	Jun. 02, 2023	Feb. 21, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Finance lease liabilities	$ 1,493			$ 1,465
Total debt principal	62,479			52,753
Debt premiums	190			200
Debt discounts and deferred financing costs	(755)			(696)
Long-term debt and lease obligation	61,914			52,257
Current portion of long-term debt	(2,132)			(1,778)
Long-term debt	$ 59,782			$ 50,479
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Long-term debt			Long-term debt
Senior Notes | 2.8% senior notes due June 2023
Debt Instrument [Line Items]
Debt interest rate	2.80%
Long-term debt	$ 0			$ 1,300
Senior Notes | 4% senior notes due December 2023
Debt Instrument [Line Items]
Debt interest rate	4.00%
Long-term debt	$ 414			414
Senior Notes | 3.375% senior notes due August 2024
Debt Instrument [Line Items]
Debt interest rate	3.375%
Long-term debt	$ 650			650
Senior Notes | 2.625% senior notes due August 2024
Debt Instrument [Line Items]
Debt interest rate	2.625%
Long-term debt	$ 1,000			1,000
Senior Notes | 3.5% senior notes due November 2024
Debt Instrument [Line Items]
Debt interest rate	3.50%
Long-term debt	$ 750			750
Senior Notes | 5% senior notes due December 2024
Debt Instrument [Line Items]
Debt interest rate	5.00%
Long-term debt	$ 299			299
Senior Notes | 5% senior notes due December 2024 | Disposal Group, Held-for-sale, Not Discontinued Operations
Debt Instrument [Line Items]
Long-term debt				3
Senior Notes | 4.1% senior notes due March 2025
Debt Instrument [Line Items]
Debt interest rate	4.10%
Long-term debt	$ 950			950
Senior Notes | 3.875% senior notes due July 2025
Debt Instrument [Line Items]
Debt interest rate	3.875%
Long-term debt	$ 2,828			2,828
Senior Notes | 5% senior notes due February 2026
Debt Instrument [Line Items]
Debt interest rate	5.00%		5.00%
Long-term debt	$ 1,500			0
Senior Notes | 2.875% senior notes due June 2026
Debt Instrument [Line Items]
Debt interest rate	2.875%
Long-term debt	$ 1,750			1,750
Senior Notes | 3% senior notes due August 2026
Debt Instrument [Line Items]
Debt interest rate	3.00%
Long-term debt	$ 750			750
Senior Notes | 3.625% senior notes due April 2027
Debt Instrument [Line Items]
Debt interest rate	3.625%
Long-term debt	$ 750			750
Senior Notes | 6.25% senior notes due June 2027
Debt Instrument [Line Items]
Debt interest rate	6.25%
Long-term debt	$ 372			372
Senior Notes | 1.3% senior notes due August 2027
Debt Instrument [Line Items]
Debt interest rate	1.30%
Long-term debt	$ 2,250			2,250
Senior Notes | 4.3% senior notes due March 2028
Debt Instrument [Line Items]
Debt interest rate	4.30%
Long-term debt	$ 5,000			5,000
Senior Notes | 5% senior notes due January 2029
Debt Instrument [Line Items]
Debt interest rate	5.00%	5.00%
Long-term debt	$ 1,000			0
Senior Notes | 3.25% senior notes due August 2029
Debt Instrument [Line Items]
Debt interest rate	3.25%
Long-term debt	$ 1,750			1,750
Senior Notes | 5.125% senior notes due February 2030
Debt Instrument [Line Items]
Debt interest rate	5.125%		5.125%
Long-term debt	$ 1,500			0
Senior Notes | 3.75% senior notes due April 2030
Debt Instrument [Line Items]
Debt interest rate	3.75%
Long-term debt	$ 1,500			1,500
Senior Notes | 1.75% senior notes due August 2030
Debt Instrument [Line Items]
Debt interest rate	1.75%
Long-term debt	$ 1,250			1,250
Senior Notes | 5.25% senior notes due January 2031
Debt Instrument [Line Items]
Debt interest rate	5.25%	5.25%
Long-term debt	$ 750			0
Senior Notes | 1.875% senior notes due February 2031
Debt Instrument [Line Items]
Debt interest rate	1.875%
Long-term debt	$ 1,250			1,250
Senior Notes | 2.125% senior notes due September 2031
Debt Instrument [Line Items]
Debt interest rate	2.125%
Long-term debt	$ 1,000			1,000
Senior Notes | 5.25% senior notes due February 2033
Debt Instrument [Line Items]
Debt interest rate	5.25%		5.25%
Long-term debt	$ 1,750			0
Senior Notes | 5.3% senior notes due June 2033
Debt Instrument [Line Items]
Debt interest rate	5.30%	5.30%
Long-term debt	$ 1,250			0
Senior Notes | 4.875% senior notes due July 2035
Debt Instrument [Line Items]
Debt interest rate	4.875%
Long-term debt	$ 652			652
Senior Notes | 6.625% senior notes due June 2036
Debt Instrument [Line Items]
Debt interest rate	6.625%
Long-term debt	$ 771			771
Senior Notes | 6.75% senior notes due December 2037
Debt Instrument [Line Items]
Debt interest rate	6.75%
Long-term debt	$ 533			533
Senior Notes | 4.78% senior notes due March 2038
Debt Instrument [Line Items]
Debt interest rate	4.78%
Long-term debt	$ 5,000			5,000
Senior Notes | 6.125% senior notes due September 2039
Debt Instrument [Line Items]
Debt interest rate	6.125%
Long-term debt	$ 447			447
Senior Notes | 4.125% senior notes due April 2040
Debt Instrument [Line Items]
Debt interest rate	4.125%
Long-term debt	$ 1,000			1,000
Senior Notes | 2.7% senior notes due August 2040
Debt Instrument [Line Items]
Debt interest rate	2.70%
Long-term debt	$ 1,250			1,250
Senior Notes | 5.75% senior notes due May 2041
Debt Instrument [Line Items]
Debt interest rate	5.75%
Long-term debt	$ 133			133
Senior Notes | 4.5% senior notes due May 2042
Debt Instrument [Line Items]
Debt interest rate	4.50%
Long-term debt	$ 500			500
Senior Notes | 4.125% senior notes due November 2042
Debt Instrument [Line Items]
Debt interest rate	4.125%
Long-term debt	$ 500			500
Senior Notes | 5.3% senior notes due December 2043
Debt Instrument [Line Items]
Debt interest rate	5.30%
Long-term debt	$ 750			750
Senior Notes | 4.75% senior notes due March 2044
Debt Instrument [Line Items]
Debt interest rate	4.75%
Long-term debt	$ 375			375
Senior Notes | 5.125% senior notes due July 2045
Debt Instrument [Line Items]
Debt interest rate	5.125%
Long-term debt	$ 3,500			3,500
Senior Notes | 3.875% senior notes due August 2047
Debt Instrument [Line Items]
Debt interest rate	3.875%
Long-term debt	$ 1,000			1,000
Senior Notes | 5.05% senior notes due March 2048
Debt Instrument [Line Items]
Debt interest rate	5.05%
Long-term debt	$ 8,000			8,000
Senior Notes | 4.25% senior notes due April 2050
Debt Instrument [Line Items]
Debt interest rate	4.25%
Long-term debt	$ 750			750
Senior Notes | 5.625% senior notes due February 2053
Debt Instrument [Line Items]
Debt interest rate	5.625%		5.625%
Long-term debt	$ 1,250			0
Senior Notes | 5.875% senior notes due June 2053
Debt Instrument [Line Items]
Debt interest rate	5.875%	5.875%
Long-term debt	$ 1,250			0
Senior Notes | 6% senior notes due June 2063
Debt Instrument [Line Items]
Debt interest rate	6.00%	6.00%
Long-term debt	$ 750			0
Convertible Debt | 0% convertible senior notes due March 2026
Debt Instrument [Line Items]
Debt interest rate	0.00%
Long-term debt	$ 3			0
Other Debt Obligations
Debt Instrument [Line Items]
Long-term debt	$ 309			$ 314

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Borrowings - Narrative (Details) - USD ($)						1 Months Ended
	Jul. 21, 2023	Jun. 02, 2023	May 02, 2023	May 01, 2023	Feb. 21, 2023	Feb. 28, 2023	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Proceeds from debt		$ 4,900,000,000		$ 5,000,000,000	$ 6,000,000,000	$ 6,000,000,000
Senior Notes | 5% senior notes due January 2029
Debt Instrument [Line Items]
Face amount of debt		$ 1,000,000,000
Debt interest rate		5.00%					5.00%
Long-term debt							$ 1,000,000,000	$ 0
Senior Notes | 5.25% senior notes due January 2031
Debt Instrument [Line Items]
Face amount of debt		$ 750,000,000
Debt interest rate		5.25%					5.25%
Long-term debt							$ 750,000,000	0
Senior Notes | 5.3% senior notes due June 2033
Debt Instrument [Line Items]
Face amount of debt		$ 1,250,000,000
Debt interest rate		5.30%					5.30%
Long-term debt							$ 1,250,000,000	0
Senior Notes | 5.875% senior notes due June 2053
Debt Instrument [Line Items]
Face amount of debt		$ 1,250,000,000
Debt interest rate		5.875%					5.875%
Long-term debt							$ 1,250,000,000	0
Senior Notes | 6% senior notes due June 2063
Debt Instrument [Line Items]
Face amount of debt		$ 750,000,000
Debt interest rate		6.00%					6.00%
Long-term debt							$ 750,000,000	0
Senior Notes | 5% senior notes due February 2026
Debt Instrument [Line Items]
Face amount of debt					$ 1,500,000,000
Debt interest rate					5.00%		5.00%
Long-term debt							$ 1,500,000,000	0
Senior Notes | 5.125% senior notes due February 2030
Debt Instrument [Line Items]
Face amount of debt					$ 1,500,000,000
Debt interest rate					5.125%		5.125%
Long-term debt							$ 1,500,000,000	0
Senior Notes | 5.25% senior notes due February 2033
Debt Instrument [Line Items]
Face amount of debt					$ 1,750,000,000
Debt interest rate					5.25%		5.25%
Long-term debt							$ 1,750,000,000	0
Senior Notes | 5.625% senior notes due February 2053
Debt Instrument [Line Items]
Face amount of debt					$ 1,250,000,000
Debt interest rate					5.625%		5.625%
Long-term debt							$ 1,250,000,000	0
Convertible Debt | 0% convertible senior notes due March 2026
Debt Instrument [Line Items]
Debt interest rate							0.00%
Repurchase price of convertible senior notes, as a percent of principal			100.00%
Conversion of convertible senior notes with cash	$ 917,000,000
Long-term debt							$ 3,000,000	$ 0
Convertible Debt | 0% convertible senior notes due March 2026 | Oak Street Health Inc.
Debt Instrument [Line Items]
Face amount of debt				$ 920,000,000
Debt interest rate				0.00%
Loans Payable | Term Loan Agreement, 364-Day
Debt Instrument [Line Items]
Debt instrument term				364 days
Face amount of debt				$ 5,000,000,000
Proceeds from debt			$ 5,000,000,000
Debt interest rate			6.20%

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Shareholders' Equity - Share Repurchases (Details) - USD ($) shares in Millions	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Nov. 17, 2022	Dec. 09, 2021
2022 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	$ 10,000,000,000.0
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	$ 4,500,000,000
Stock repurchased during period (in shares)	22.8	19.1
Stock repurchased during period, value	$ 2,000,000,000	$ 2,000,000,000

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Shareholders' Equity - Accelerated Share Repurchases (Details) - 2021 Repurchase Program - USD ($) $ / shares in Units, shares in Millions, $ in Billions	Jan. 04, 2023	Jan. 04, 2022	Feb. 28, 2023	Feb. 28, 2022
Citibank, N.A.
Equity, Class of Treasury Stock [Line Items]
ASR agreement, amount	$ 2.0		$ 2.0
Payments for ASR, amount	$ 2.0
ASR percent of notional amount received in shares	80.00%
Shares repurchased under ASR agreement (in shares)	17.4		5.4
Share price (in dollars per share)	$ 92.19
Transfer of shares to treasury stock value	$ 1.6
ASR, shares to be received at the end of program as a percent of notional amount			20.00%
Citibank, N.A. | Forward contract
Equity, Class of Treasury Stock [Line Items]
Forward contract, notional amount	$ 0.4
Barclays Bank
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%
Barclays Bank | Forward contract
Equity, Class of Treasury Stock [Line Items]
Forward contract, notional amount		$ 0.3

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Shareholders' Equity - Dividends (Details) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Equity [Abstract]
Dividends declared per share (in dollars per share)	$ 0.605	$ 0.55	$ 1.815	$ 1.65

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Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended							9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022		Sep. 30, 2023	Sep. 30, 2022		Dec. 31, 2022	Dec. 31, 2021
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	$ 73,002	$ 71,580	$ 71,769	$ 75,736	$ 74,034	$ 75,381		$ 71,769	$ 75,381
Other comprehensive income (loss)	(146)	17	389	(385)	(540)	(763)		260	(1,688)
Balance at end of period	74,510	73,002	71,580	71,487	75,736	74,034		74,510	71,487
Adoption of new accounting standard, adjustment
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period			454			(540)	[1]	454	(540)	[1]
AOCI Including Portion Attributable to Noncontrolling Interest
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(858)		(1,264)	(969)		965		(1,264)	965
Balance at end of period	(1,004)	(858)		(1,354)	(969)			(1,004)	(1,354)
AOCI Including Portion Attributable to Noncontrolling Interest | Adoption of new accounting standard, adjustment
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	0		0	0		(631)		0	(631)
Balance at end of period		0			0
Net unrealized investment gains (losses)
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(1,113)		(1,519)	(1,199)		778		(1,519)	778
Other comprehensive income (loss) before reclassifications, net of tax	(478)			(725)				(313)	(2,852)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	157			88				398	218
Other comprehensive income (loss)	(321)			(637)				85	(2,634)
Balance at end of period	(1,434)	(1,113)		(1,836)	(1,199)			(1,434)	(1,836)
OCI before reclassifications, pre-tax	(475)			(814)				(310)	(3,361)
Amounts reclassified, pre-tax	157			99				398	253
Net unrealized investment gains (losses) | Adoption of new accounting standard, adjustment
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	0		0	0		20		0	20
Balance at end of period		0			0
Adoption of new accounting standard, pre-tax		0			0						$ 0	$ 26
Change in discount rate on long-duration insurance reserves
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	205		219	28		0		219	0
Other comprehensive income (loss) before reclassifications, net of tax	181			250				167	929
Other comprehensive income (loss)	181			250				167	929
Balance at end of period	386	205		278	28			386	278
OCI before reclassifications, pre-tax	233			321				210	1,195
Change in discount rate on long-duration insurance reserves | Adoption of new accounting standard, adjustment
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	0		0	0		(651)		0	(651)
Balance at end of period		0			0
Adoption of new accounting standard, pre-tax		0			0						$ 0	$ (838)
Foreign currency translation adjustments
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	1		0	2		0		0	0
Other comprehensive income (loss) before reclassifications, net of tax	(2)			(7)				(1)	(5)
Other comprehensive income (loss)	(2)			(7)				(1)	(5)
Balance at end of period	(1)	1		(5)	2			(1)	(5)
Net cash flow hedges
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	252		239	234		222		239	222
Other comprehensive income (loss) before reclassifications, net of tax	0			10				19	28
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	(4)			(2)				(10)	(8)
Other comprehensive income (loss)	(4)			8				9	20
Balance at end of period	248	252		242	234			248	242
OCI before reclassifications, pre-tax	0			13				25	37
Amounts reclassified, pre-tax	(5)			(2)				(13)	(10)
Amount expected to be reclassified	15							15
Pension and other postretirement benefits
Changes in Accumulated Other Comprehensive Income (Loss) by Component
Balance at beginning of period	(203)		$ (203)	(34)		$ (35)		(203)	(35)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	0			1				0	2
Other comprehensive income (loss)	0			1				0	2
Balance at end of period	(203)	$ (203)		(33)	$ (34)			(203)	(33)
Amounts reclassified, pre-tax	$ 0			$ 1				$ 0	$ 2

[1] Reflects the adoption of Accounting Standards Update (“ASU”) 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts (Topic 944) during the three months ended March 31, 2023. See Note 1 ‘‘Significant Accounting Policies’’ for additional information.

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Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS (in shares)		8
Numerator for earnings (loss) per share calculation:
Net income (loss) attributable to CVS Health, Basic	$ 2,261	$ (3,406)	$ 6,298	$ 1,977
Net income (loss) attributable to CVS Health, Diluted	$ 2,261	$ (3,406)	$ 6,298	$ 1,977
Denominator for earnings (loss) per share calculation:
Weighted average shares, basic (in shares)	1,287	1,315	1,284	1,313
Weighted average shares, diluted (in shares)	1,290	1,315	1,289	1,324
Earnings (loss) per share:
Basic (in dollars per share)	$ 1.76	$ (2.59)	$ 4.90	$ 1.51
Diluted (in dollars per share)	$ 1.75	$ (2.59)	$ 4.88	$ 1.49
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)	9	4	7	4
Denominator for earnings (loss) per share calculation:
Effect of dilutive securities (in shares)	1	0	2	5
Restricted stock units and performance stock units
Denominator for earnings (loss) per share calculation:
Effect of dilutive securities (in shares)	2	0	3	6

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Commitments and Contingencies (Details) $ in Millions	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2022 USD ($)	Aug. 31, 2022 USD ($)	Sep. 30, 2023 USD ($) lease	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) lease	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2023 state
Commitments and Contingencies Disclosure [Abstract]
Guarantor obligations, number of leases | lease			63		63
Loss Contingencies [Line Items]
Opioid litigation charges			$ 0	$ 5,220	$ 0	$ 5,704
Settlement Framework
Loss Contingencies [Line Items]
Legal settlement awarded to other party	$ 4,300
Attorneys' fees and costs	$ 625
Legal settlement, period of payment	10 years						10 years
Number of states that elected to join the settlement | state								45
Number of states under separate settlement agreements | state								4
Settlement Framework | Tribal Entities
Loss Contingencies [Line Items]
Legal settlement awarded to other party	$ 113
Attorneys' fees and costs	$ 16
Legal settlement, period of payment	10 years						10 years
Settlement Framework and Other Opioid-Related Claims
Loss Contingencies [Line Items]
Opioid litigation charges							$ 5,300
Federal Court in Ohio Judgment | Pending Litigation
Loss Contingencies [Line Items]
Legal settlement awarded to other party		$ 651
Legal settlement, period of payment		15 years

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Segment Reporting - Narrative (Details)	9 Months Ended
	Sep. 30, 2023 Segment
Segment Reporting [Abstract]
Number of operating segments	3

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Segment Reporting - Retrospective Adjustments to Segment Composition (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	$ 89,764	$ 81,159	$ 263,963	$ 238,621
Adjusted operating income (loss)	4,456	4,349	13,307	13,958
Operating Segments | Health Care Benefits
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	26,296	22,496	78,920	68,331
Adjusted operating income (loss)	1,536	1,641	4,901	5,425
Operating Segments | Health Services
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	46,891	43,254	137,697	125,807
Adjusted operating income (loss)	1,878	1,695	5,452	4,996
Operating Segments | Pharmacy & Consumer Wellness
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	28,872	27,237	85,578	79,881
Adjusted operating income (loss)	1,389	1,401	3,936	4,684
Corporate/ Other | Corporate/ Other
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	105	142	376	378
Adjusted operating income (loss)	(347)	(388)	(982)	(1,147)
Intersegment Eliminations
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues	(12,400)	(11,970)	(38,608)	(35,776)
Adjusted operating income (loss)	$ 0	0	$ 0	0
As Reported
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		81,159		238,621
Adjusted operating income (loss)		4,233		13,526
As Reported | Operating Segments | Health Care Benefits
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		22,511		68,376
Adjusted operating income (loss)		1,544		5,126
As Reported | Operating Segments | Health Services
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		43,216		125,489
Adjusted operating income (loss)		1,877		5,368
As Reported | Operating Segments | Pharmacy & Consumer Wellness
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		26,706		78,410
Adjusted operating income (loss)		1,398		4,865
As Reported | Corporate/ Other | Corporate/ Other
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		142		378
Adjusted operating income (loss)		(417)		(1,277)
As Reported | Intersegment Eliminations
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		(11,416)		(34,032)
Adjusted operating income (loss)		(169)		(556)
Adjustments
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		0		0
Adjusted operating income (loss)		116		432
Adjustments | Operating Segments | Health Care Benefits
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		(15)		(45)
Adjusted operating income (loss)		97		299
Adjustments | Operating Segments | Health Services
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		38		318
Adjusted operating income (loss)		(182)		(372)
Adjustments | Operating Segments | Pharmacy & Consumer Wellness
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		531		1,471
Adjusted operating income (loss)		3		(181)
Adjustments | Corporate/ Other | Corporate/ Other
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		0		0
Adjusted operating income (loss)		29		130
Adjustments | Intersegment Eliminations
Segment Reporting, Other Significant Reconciling Item [Line Items]
Total revenues		(554)		(1,744)
Adjusted operating income (loss)		$ 169		$ 556

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Segment Reporting - Reconciliation of Financial Measures of Segments to Consolidated Totals (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenues from external customers	$ 89,487	$ 80,958	$ 263,078	$ 238,106
Net investment income (loss)	277	201	885	515
Total revenues	89,764	81,159	263,963	238,621
Adjusted operating income (loss)	4,456	4,349	13,307	13,958
Operating Segments | Health Care Benefits
Segment Reporting Information [Line Items]
Revenues from external customers	26,089	22,375	78,302	67,993
Net investment income (loss)	187	101	556	278
Total revenues	26,296	22,496	78,920	68,331
Adjusted operating income (loss)	1,536	1,641	4,901	5,425
Operating Segments | Health Services
Segment Reporting Information [Line Items]
Revenues from external customers	44,064	40,544	127,907	116,801
Net investment income (loss)	0	0	0	0
Total revenues	46,891	43,254	137,697	125,807
Adjusted operating income (loss)	1,878	1,695	5,452	4,996
Co-payments	3,200	2,900	10,700	9,800
Operating Segments | Pharmacy & Consumer Wellness
Segment Reporting Information [Line Items]
Revenues from external customers	19,321	18,007	56,826	53,215
Net investment income (loss)	(2)	(10)	(4)	(44)
Total revenues	28,872	27,237	85,578	79,881
Adjusted operating income (loss)	1,389	1,401	3,936	4,684
Corporate/ Other | Corporate/ Other
Segment Reporting Information [Line Items]
Revenues from external customers	13	32	43	97
Net investment income (loss)	92	110	333	281
Total revenues	105	142	376	378
Adjusted operating income (loss)	(347)	(388)	(982)	(1,147)
Intersegment Eliminations
Segment Reporting Information [Line Items]
Intersegment revenues	(12,400)	(11,970)	(38,608)	(35,776)
Net investment income (loss)	0	0	0	0
Total revenues	(12,400)	(11,970)	(38,608)	(35,776)
Adjusted operating income (loss)	0	0	0	0
Intersegment Eliminations | Health Care Benefits
Segment Reporting Information [Line Items]
Intersegment revenues	20	20	62	60
Intersegment Eliminations | Health Services
Segment Reporting Information [Line Items]
Intersegment revenues	2,827	2,710	9,790	9,006
Intersegment Eliminations | Pharmacy & Consumer Wellness
Segment Reporting Information [Line Items]
Intersegment revenues	$ 9,553	$ 9,240	$ 28,756	$ 26,710

XML

Segment Reporting - Reconciliation of Consolidated Operating Income to Adjusted Operating Income (Details) - USD ($) $ in Millions		3 Months Ended			9 Months Ended
	Jun. 01, 2022	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting [Abstract]
Operating income (loss) (GAAP measure)		$ 3,690		$ (3,919)	$ 10,370	$ 4,295
Amortization of intangible assets		509		458	1,396	1,380
Net realized capital losses		142		110	345	283
Acquisition-related integration costs		94		0	294	0
Restructuring charges		11	$ 496	0	507	0
Office real estate optimization charges		10		0	46	0
Loss on assets held for sale		0		2,480	349	2,521
Opioid litigation charges		0		5,220	0	5,704
Gain on sale of subsidiary		0		0	0	(225)
Adjusted operating income		$ 4,456		$ 4,349	$ 13,307	$ 13,958
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Payflex | Health Care Benefits
Segment Reporting, Other Significant Reconciling Item [Line Items]
Proceeds from divestiture of subsidiary	$ 775

XML

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2018-12 [Member]