Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2017

Segment Reporting

Reconciliation of the Company's business segments to the consolidated financial statements

	Pharmacy
	Services		Retail/LTC		Corporate		Intersegment		Consolidated
In millions	Segment(1)		Segment		Segment		Eliminations(2)		Totals
Three Months Ended
June 30, 2017:
Net revenues	$	32,325	$	19,554	$	—	$	(6,194)	$	45,685
Gross profit (3)		1,469		5,675		—		(209)		6,935
Operating profit (loss) (4)(5)		1,135		1,411		(240)		(189)		2,117
June 30, 2016:
Net revenues		29,510		19,998		—		(5,783)		43,725
Gross profit (3)		1,367		5,837		—		(189)		7,015
Operating profit (loss) (5)(6)		1,039		1,711		(220)		(173)		2,357
Six Months Ended
June 30, 2017:
Net revenues		63,548		38,895		—		(12,244)		90,199
Gross profit (3)		2,565		11,351		—		(401)		13,515
Operating profit (loss) (4)(5)		1,919		2,822		(466)		(365)		3,910
June 30, 2016:
Net revenues		58,275		40,110		—		(11,445)		86,940
Gross profit (3)		2,469		11,667		—		(377)		13,759
Operating profit (loss) (5)(6)		1,823		3,495		(432)		(344)		4,542

(1) Net revenues of the Pharmacy Services Segment include approximately $2.7 billion and $2.6 billion of retail co‑payments for the three months ended June 30, 2017 and 2016, respectively, as well as $5.8 billion and $5.6 billion of retail co-payments for the six months ended June 30, 2017 and 2016, respectively.

(2) Intersegment eliminations relate to intersegment revenue generating activities that occur between the Pharmacy Services Segment and the Retail/LTC Segment. These occur in the following ways: when members of Pharmacy Services Segment clients (“members”) fill prescriptions at the Company’s retail pharmacies to purchase covered products, when members enrolled in programs such as Maintenance Choice® elect to pick up maintenance prescriptions at one of the Company’s retail pharmacies instead of receiving them through the mail, or when members have prescriptions filled at the Company’s long-term care pharmacies. When these occur, both the Pharmacy Services and Retail/LTC segments record the revenues, gross profit and operating profit on a standalone basis.

(3) The Retail/LTC Segment gross profit for the three months ended June 30, 2017 and 2016 includes $5 million and $6 million, respectively, of acquisition-related integration costs. The Retail/LTC Segment gross profit for the six months ended June 30, 2017 and 2016 includes $5 million and $10 million, respectively, of acquisition-related integration costs. The integration costs in 2017 are related to the acquisition of Omnicare and the integration costs in 2016 are related to the acquisitions of Omnicare and the pharmacies and clinics of Target.

(4) The Retail/LTC Segment operating profit for the three and six months ended June 30, 2017 includes a $135 million goodwill impairment charge (see “Note 2 – Goodwill” to the condensed consolidated financial statements). The Retail/LTC Segment operating profit for the three and six months ended June 30, 2017 also includes $6 million and $205 million, respectively, of charges associated with store closures (see “Note 6 – Store Closures” to the condensed consolidated financial statements).

(5) The Retail/LTC Segment operating profit for the three months ended June 30, 2017 and 2016 includes $10 million and $81 million, respectively, of acquisition-related integration costs. The Retail/LTC Segment operating profit for the six months ended June 30, 2017 and 2016 includes $25 million and $142 million, respectively, of acquisition-related integration costs. The integration costs in 2017 are related to the acquisition of Omnicare and the integration costs in 2016 are related to the acquisitions of Omnicare and the pharmacies and clinics of Target.

Amounts revised to reflect the adoption of ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which increased consolidated operating profit by $7 and $16 million for the three and six months ended June 30, 2016, respectively (see “Note 1 – Accounting Policies” to the condensed consolidated financial statements).