| Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Health Care Benefits     | 23,033  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:14]**  | 25,877  **[CVS_3248812_4]**  | 26,700  **[CVS_3383224_5]**  | 26,296  **[0000064803-23-000047_cvs-20230930.htm:13]**  | 26,700  **[CVS_3372169_4]** **[0000064803-24-000006_cvs_ex99x1q4-23.htm:17]**  | 32,236  **[0000064803-24-000016_cvs-20240331.htm:10]**  | 32,475  **[0000064803-24-000029_cvs-20240630.htm:11]**  | 32,996  **[0000064803-24-000034_cvs-20240930.htm:11]**  |
| Health Services          | 43,747  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:14]**  | 44,591  **[CVS_3248812_4]**  | 46,200  **[CVS_3383224_5]**  | 46,891  **[0000064803-23-000047_cvs-20230930.htm:13]**  | 49,100  **[CVS_3372169_4]** **[0000064803-24-000006_cvs_ex99x1q4-23.htm:17]**  | 40,285  **[0000064803-24-000016_cvs-20240331.htm:10]**  | 42,171  **[0000064803-24-000029_cvs-20240630.htm:11]**  | 44,129  **[0000064803-24-000034_cvs-20240930.htm:11]**  |
| Pharmacy & Consumer Wellness | 28,184  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:14]**  | 27,922  **[CVS_3248812_4]**  | 28,800  **[CVS_3383224_5]**  | 28,872  **[0000064803-23-000047_cvs-20230930.htm:13]**  | 31,200  **[CVS_3372169_4]** **[0000064803-24-000006_cvs_ex99x1q4-23.htm:17]**  | 28,725  **[0000064803-24-000016_cvs-20240331.htm:10]**  | 29,838  **[0000064803-24-000029_cvs-20240630.htm:11]**  | 32,423  **[0000064803-24-000034_cvs-20240930.htm:11]**  |
| Corporate/Other          | N/A     | 188  **[CVS_3248812_4]**  | N/A     | 105  **[0000064803-23-000047_cvs-20230930.htm:13]**  | N/A     | 115  **[0000064803-24-000016_cvs-20240331.htm:10]**  | 111  **[0000064803-24-000029_cvs-20240630.htm:11]**  | 142  **[0000064803-24-000034_cvs-20240930.htm:11]**  |
| Intersegment Eliminations| N/A     | (13,300)  **[CVS_3248812_4]**  | N/A     | (12,400)  **[0000064803-23-000047_cvs-20230930.htm:13]**  | N/A     | (12,924)  **[0000064803-24-000016_cvs-20240331.htm:10]**  | (13,361)  **[0000064803-24-000029_cvs-20240630.htm:11]**  | (14,262)  **[0000064803-24-000034_cvs-20240930.htm:11]**  |

f43fb9b4734307ec03a3349812de0ab960005a7ca27316ca6c2dceba6ce19549

| Metric                                             | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Number of Primary Care Medical Clinics             | N/A  **[CVS_3227171_2]**  | N/A    | 177  **[0000064803-23-000033_cvs-20230630.htm:7]**  | 192  **[0000064803-23-000047_cvs-20230930.htm:7]**  | 204  **[0000064803-24-000007_cvs-20231231.htm:183]**  | 205  **[0000064803-24-000016_cvs-20240331.htm:43]**  | 207  **[0000064803-24-000029_cvs-20240630.htm:48]**  | >225  **[0000064803-24-000034_cvs-20240930.htm:6]**  |
| People Served through Health Insurance (millions)  | 35  **[0000064803-23-000009_cvs-20221231.htm:180]**  | 37  **[0000064803-23-000016_cvs-20230331.htm:6]**  | 36  **[0000064803-23-000033_cvs-20230630.htm:7]**  | >35  **[0000064803-23-000047_cvs-20230930.htm:7]**  | >35  **[0000064803-24-000007_cvs-20231231.htm:183]**  | >36  **[0000064803-24-000016_cvs-20240331.htm:43]**  | >36  **[0000064803-24-000029_cvs-20240630.htm:48]**  | >36  **[0000064803-24-000034_cvs-20240930.htm:6]**  |
| Generic Dispensing Rate                            | 85.9%  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:18]**  | 89.4%  **[0000064803-23-000016_cvs-20230331.htm:66]**  | 89.5%  **[0000064803-23-000033_cvs-20230630.htm:78]**  | 88.3%  **[0000064803-23-000047_cvs-20230930.htm:81]**  | 86.6%  **[0000064803-24-000006_cvs_ex99x1q4-23.htm:20]**  | 90.1%  **[0000064803-24-000016_cvs-20240331.htm:58]**  | 90.1%  **[0000064803-24-000029_cvs-20240630.htm:66]**  | 88.2%  **[0000064803-24-000034_cvs-20240930.htm:69]**  |
| Prescriptions Filled (millions)                    | 423.1  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:4]**  | 1,625.4  **[0000064803-23-000021_cvs-20230525_d2.htm:82]**  | 405.7  **[0000064803-23-000032_cvs_ex99x1q2-23.htm:4]**  | 407.1  **[0000064803-23-000046_cvs_ex99x1q3-23.htm:5]**  | 431.5  **[0000064803-24-000006_cvs_ex99x1q4-23.htm:6]**  | 417.6  **[0000064803-24-000015_cvs_ex99x1q1-24.htm:4]**  | 420.4  **[0000064803-24-000028_cvs_ex99x1q2-24.htm:4]**  | 431.6  **[0000064803-24-000033_cvs_ex99x1q3-24.htm:5]**  |
| Pharmacy Claims Processed (millions)               | 600.4  **[0000064803-23-000008_cvs_ex99x1q4-22.htm:3]**  | 587.3  **[0000064803-23-000015_cvs_ex99x1q1-23.htm:3]**  | 576.6  **[0000064803-23-000033_cvs-20230630.htm:74]**  | 579.6  **[0000064803-23-000046_cvs_ex99x1q3-23.htm:4]**  | 600.8  **[0000064803-24-000006_cvs_ex99x1q4-23.htm:5]**  | 462.9  **[0000064803-24-000015_cvs_ex99x1q1-24.htm:3]**  | 471  **[CVS_3396958_7]**  | 484.1  **[0000064803-24-000033_cvs_ex99x1q3-24.htm:4]**  |

19505cbe0d6efc00a28e58f07c11925341e998c15fe8e4a85f2a28957cf3b38a

CVS Health Corporation is a leading health solutions company that operates across four main segments: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness, and Corporate/Other **[0000064803-24-000034_cvs-20240930.htm:51]** **[0000064803-24-000007_cvs-20231231.htm:133]** **[0000064803-24-000007_cvs-20231231.htm:7]**. The company offers a wide range of health insurance products and services, pharmacy benefit management solutions, and retail pharmacy operations **[0000064803-24-000034_cvs-20240930.htm:51]** **[0000064803-24-000007_cvs-20231231.htm:133]** **[0000064803-24-000007_cvs-20231231.htm:31]**. CVS Health leverages its integrated model to enhance care delivery, improve health outcomes, and reduce health care costs **[0000064803-24-000034_cvs-20240930.htm:51]** **[0000064803-24-000007_cvs-20231231.htm:133]** **[0000064803-24-000007_cvs-20231231.htm:7]**.

1. **Pharmacy & Consumer Wellness** - Operates retail pharmacy services, long-term care pharmacy services, specialty and mail order pharmacy offerings, and front store sales, which include health and wellness products and general merchandise **[0000064803-24-000007_cvs-20231231.htm:31]** **[0000064803-24-000007_cvs-20231231.htm:135]**.
2. **Health Care Benefits** - Offers health insurance products and services, including medical, pharmacy, dental, and behavioral health plans, as well as Medicare Advantage and Medicaid management services **[0000064803-24-000034_cvs-20240930.htm:51]** **[0000064803-24-000007_cvs-20231231.htm:133]**.
3. **Health Services** - Provides pharmacy benefit management solutions and health care services through medical clinics, virtual platforms, and home-based care, supported by acquisitions like Signify Health and Oak Street Health **[0000064803-24-000007_cvs-20231231.htm:133]** **[0000064803-24-000007_cvs-20231231.htm:7]**.
4. **Corporate/Other** - Includes management and administrative expenses and products for which the company no longer solicits new customers **[0000064803-24-000007_cvs-20231231.htm:135]** **[0000064803-24-000007_cvs-20231231.htm:35]**.

db1540a6aca4cab929ef2356dd17fc942a9de491c6be46f12c847576405cb64d

af9e47a831b06b4ddc378fcd4c41d0b08f220be8818717a23de5e9966e47f328

1. Given that your Health Care Benefits segment may show operating losses in 2024 after generating over $5.5 billion in adjusted operating income in 2023  **[CVS_3406016_8]** , what are the primary factors driving this significant decline, and what specific measures are you implementing to return this business to profitability?  **[CVS_3406016_8]** 

2. You acknowledged miscalculations during the 2023 bid process for Medicare Advantage and individual exchange products, which significantly burdened Aetna's current results  **[CVS_3406016_2]** . How are you adjusting your bid and pricing strategies to prevent similar issues in future cycles, and what oversight mechanisms are being implemented to ensure accuracy?  **[CVS_3406016_2]** **[CVS_3406016_3]** 

3. With the anticipated Medicare Advantage membership disenrollment of 5% to 10% due to benefit design changes and reduced supplemental benefits  **[CVS_3406016_9]** , how do you plan to maintain market competitiveness and member satisfaction while aiming for margin improvement?  **[CVS_3406016_2]** **[CVS_3406016_9]** 

4. The individual exchange business is facing higher utilization and may result in negative margins approaching double digits  **[CVS_3406016_8]** . What are the underlying factors contributing to this underperformance, and what corrective actions are you taking to stabilize and improve this business line?  **[CVS_3406016_2]** **[CVS_3406016_8]** 

5. Given that Aetna has been more acutely impacted by industry pressures than others  **[CVS_3406016_2]** , what structural or operational deficiencies have you identified, and how will the recent leadership changes and operational enhancements address these issues effectively?  **[CVS_3406016_2]** **[CVS_3406016_3]** 

454b444e95be319461362071293427d6978de556d3572a47d79583563ad12ed7

20fccd4f707d0fe4c53cd5a821907142b80a053a9a9f2e407000adbd5b3dbcc6

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

69e8ae396dbcfe24fee4d9cad4173cab81b9e70c45012b4d76473c08e90875ff

Number of Primary Care Medical Clinics

People Served through Health Insurance (millions)

Generic Dispensing Rate

Prescriptions Filled (millions)

Pharmacy Claims Processed (millions)

d5e4135a13a8668351f6a16147ce7dc9e53a0e7f9f5886a44ce748b949c83ed8

- Prime Therapeutics and MedImpact - Competitors in the PBM services market  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Express Scripts (Cigna Corporation) and OptumRx (UnitedHealth) - PBMs owned by large national health plans  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Aledade, Centerwell - Competitors in primary care operations  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Collaborative Health Systems, Evolent Health, Vytalize Health, Stellar Health - Competitors in ACO operations  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Equality Health, Physicians of Southwest Washington - Geographically focused competitors in ACO operations  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Matrix Medical Network - Competitor in IHE and related services operations  **[0000064803-24-000007_cvs-20231231.htm:29]** .
- Walgreens, Rite Aid - Competitors in the retail pharmacy business  **[0000064803-24-000007_cvs-20231231.htm:35]** .
- Walmart - Competitor as a discount retailer in the retail pharmacy business  **[0000064803-24-000007_cvs-20231231.htm:35]** .
- Amazon - Competitor as an online retailer in the retail pharmacy business  **[0000064803-24-000007_cvs-20231231.htm:35]** .
- PharMerica - Largest LTC pharmacy competitor nationally  **[0000064803-24-000007_cvs-20231231.htm:35]** .
- COST, DG, DLTR, KR, SYY, TGT, WBA, WMT - Companies included in the S&P 500 Food & Staples Retailing Group Index  **[0000064803-24-000007_cvs-20231231.htm:132]** .

884d08c0eec3fdd3f5c0536b6fff5ff8e772f620323dc203798aa3d16a0d60fb

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - CVS did not provide formal numeric guidance for FY 2024 but offered directional commentary:
    - **Health Services and Pharmacy and Consumer Wellness Segments**: Confidence in performance and momentum.
    - **Health Care Benefits Segment**: Challenges due to elevated utilization and higher acuity.
    - **Medicare Advantage**: Expected membership disenrollment of 5% to 10%.
    - **Cost Savings Initiative**: Expected to generate over $500 million in 2025.
    - **Leverage and Cash Flow**: Aim to return leverage ratio to normalized levels with year-to-date cash flow from operations of approximately $7.2 billion.
    - **2025 Outlook**: Transition year with expected improvement in Health Care Benefits and Health Services segments  **[CVS_3406016_7]** **[CVS_3406016_8]** **[CVS_3406016_5]** **[CVS_3406016_15]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Adjusted EPS**: $6.40 to $6.65 per share.
  - **Health Care Benefits Segment**:
    - Adjusted operating income: $2.25 billion to $2.55 billion.
    - Medical benefit ratio (MBR): 90.6% to 90.8%.
  - **Health Services Segment**: Adjusted operating income of at least $7 billion.
  - **Pharmacy & Consumer Wellness Segment**: Adjusted operating income of at least $5.6 billion.
  - **Cash Flow from Operations**: At least $10.5 billion  **[CVS_3396958_7]** **[CVS_3381801_5]** **[CVS_3381801_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Adjusted EPS**: At least $7.
  - **Health Care Benefits Segment**:
    - Adjusted operating income: At least $3.6 billion.
    - Medical benefit ratio: Approximately 89.8%.
  - **Health Services Segment**: Adjusted operating income of at least $7 billion.
  - **Pharmacy & Consumer Wellness Segment**: Adjusted operating income of at least $5.6 billion.
  - **Share Count**: Approximately 1.265 billion shares.
  - **Adjusted Tax Rate**: Approximately 25.6%.
  - **Cash Flow from Operations**: At least $10.5 billion.
  - **Medicare Advantage Business**: Revenue between $65 billion and $70 billion with significant losses.
  - **2025 Preliminary Outlook**: Low double-digit adjusted EPS growth  **[CVS_3381801_5]** **[CVS_3381801_6]** **[CVS_3381801_1]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Adjusted EPS**: At least $8.30.
  - **Cash Flow from Operations**: At least $12 billion.
  - **Medical Benefit Ratio (MBR)**: Approximately 87.7%.
  - **Health Care Benefits Segment**: Adjusted operating income of at least $5.4 billion.
  - **Pharmacy & Consumer Wellness Segment**: Adjusted operating income of at least $5.6 billion.
  - **Health Services Segment**: Adjusted operating income of at least $7.4 billion.
  - **Medicare Advantage Membership**: At least 800,000 new members.
  - **Store Closures**: On track to close 900 stores  **[CVS_3372169_1]** **[CVS_3372169_3]** **[CVS_3372169_6]** **[CVS_3372169_5]** .

2701ad89277e700761d3551b59c9c529dc3c4d604af58328fc4606505472cdde

| Name                  | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Karen S. Lynch        | President and Chief Executive Officer                                     | February 1, 2021 | Karen S. Lynch has been the President and CEO of CVS Health Corporation since February 1, 2021. She has over three decades of experience in the healthcare industry  **[0001308179-24-000463_lcvs2024_def14a.htm:22]** **[0000064803-24-000007_cvs-20231231.htm:126]** **[0001308179-23-000606_cvs4106991-def14a.htm:26]** .                           |
| Thomas F. Cowhey      | Executive Vice President and Chief Financial Officer                      | January 5, 2024  | Thomas F. Cowhey is the EVP and CFO of CVS Health Corporation. He previously served as the Interim CFO and as SVP, Capital Markets  **[0000064803-24-000007_cvs-20231231.htm:125]** **[0001308179-24-000463_lcvs2024_def14a.htm:56]** **[0001308179-24-000463_lcvs2024_def14a.htm:55]** .                                                             |
| Sreekanth K. Chaguturu| Executive Vice President and Chief Medical Officer                        | May 2022         | Sreekanth K. Chaguturu, M.D., has been the EVP and CMO of CVS Health since May 2022. He was previously the Chief Medical Officer of CVS Caremark  **[0000064803-24-000007_cvs-20231231.htm:125]** .                                                     |
| James D. Clark        | Senior Vice President - Controller and Chief Accounting Officer           | November 2018    | James D. Clark has been the SVP - Controller and CAO of CVS Health since November 2018. He was previously VP - Finance and Accounting of CVS Pharmacy, Inc.  **[0000064803-24-000007_cvs-20231231.htm:125]** .                                          |
| Laurie P. Havanec     | Executive Vice President and Chief People Officer                         | February 2021    | Laurie P. Havanec has been the EVP and Chief People Officer of CVS Health since February 2021. She previously held similar roles at Otis Worldwide Corporation  **[0000064803-24-000007_cvs-20231231.htm:125]** **[0000064803-23-000009_cvs-20221231.htm:119]** .                                    |
| J. David Joyner       | Executive Vice President and President of Pharmacy Services               | January 2023     | J. David Joyner has been the EVP and President of Pharmacy Services at CVS Health since January 2023. He has a long history with CVS, including roles at CVS Caremark  **[0001193125-24-239193_d837701d8k.htm:2]** **[0001193125-24-239193_d837701dex991.htm:0]** .                             |
| Brian A. Kane         | Executive Vice President and President of Aetna                           | September 2023   | Brian A. Kane has been the EVP of CVS Health and President of Aetna since September 2023. He was previously an Independent Strategic Advisor and CFO of Humana, Inc.  **[0000064803-24-000007_cvs-20231231.htm:125]** .                                 |
| Samrat S. Khichi      | Executive Vice President, Chief Policy Officer, and General Counsel       | February 2023    | Samrat S. Khichi has been the EVP, Chief Policy Officer, and General Counsel of CVS Health since February 2023. He was previously with Becton Dickinson Company  **[0000064803-24-000007_cvs-20231231.htm:126]** **[0001308179-24-000463_lcvs2024_def14a.htm:55]** **[0001308179-24-000463_lcvs2024_def14a.htm:56]** .                                |
| Tilak Mandadi         | Executive Vice President and Chief Data, Digital and Technology Officer   | July 2022        | Tilak Mandadi has been the EVP and Chief Data, Digital and Technology Officer of CVS Health since July 2022. He was previously the Chief Strategy Officer at MGM Resorts International  **[0000064803-24-000007_cvs-20231231.htm:126]** **[0000064803-23-000009_cvs-20221231.htm:120]** .            |
| Prem S. Shah          | Executive Vice President and Group President                              | November 6, 2024 | Prem S. Shah is the EVP and Group President at CVS Health. He has held various leadership positions at CVS since 2013, including EVP and Chief Pharmacy Officer  **[0001193125-24-251673_d781927d8k.htm:1]** **[0000064803-24-000007_cvs-20231231.htm:126]** **[0001308179-24-000463_lcvs2024_def14a.htm:55]** **[0001193125-24-251673_d781927dex991.htm:0]** .                           |
| Roger Farah           | Executive Chairman of the Board                                           | October 17, 2024 | Roger N. Farah is the Executive Chairman of the Board at CVS Health. He has been an Independent Director since November 2018 and served as the Independent Chair of the Board  **[0001193125-24-239193_d837701d8k.htm:2]** **[0001308179-24-000463_lcvs2024_def14a.htm:18]** **[0001308179-23-000606_cvs4106991-def14a.htm:22]** .                |
| Steve Nelson          | President, Aetna                                                          | November 6, 2024 | Steve Nelson was appointed as the President of Aetna on November 6, 2024. He has extensive experience in leading managed care and healthcare delivery companies  **[0001193125-24-251673_d781927dex991.htm:0]** **[0001193125-24-251673_d781927d8k.htm:2]** .                                 |

571828098ee61fed94e625cd26abeb0bf493c7495b59e877bb5087725f601067

| Program Details          | Program 1          | Program 2          |
|--------------------------|--------------------|--------------------|
| Approval Date            | December 9, 2021   | November 17, 2022  |
| End Date/Duration        | Not specified      | Not specified      |
| Total additional amount  | **$10.0 billion**  **[0000064803-24-000034_cvs-20240930.htm:76]** **[0000064803-24-000034_cvs-20240930.htm:29]**  | **$10.0 billion**  **[0000064803-24-000034_cvs-20240930.htm:76]** **[0000064803-24-000034_cvs-20240930.htm:29]**  |
| Remaining authorization amount | **$1.5 billion**  **[0000064803-24-000034_cvs-20240930.htm:76]** **[0000064803-24-000034_cvs-20240930.htm:29]**  | **$10.0 billion**  **[0000064803-24-000034_cvs-20240930.htm:76]** **[0000064803-24-000034_cvs-20240930.htm:29]**  |
| Details                  | No specific end date provided | No shares repurchased yet  **[0000064803-24-000034_cvs-20240930.htm:76]** **[0000064803-24-000029_cvs-20240630.htm:70]** **[0000064803-24-000007_cvs-20231231.htm:130]**  |

b36e103713380e87f7e6b331e027cb0307ff9f4955162f9bb3610f14ed1ddb98

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

5f42073817d7aaaf900b56af923b293af87cbcfaf4e076390566374591017463

6788c7e6d7ff5302c0ba69ed2ff88fd06fa8cbfd0b87fa625b46a5ed6a30d23e

**Annual guidance for FY 2024:**
- **Medicare Advantage membership disenrollment**: 5% to 10%  **[CVS_3406016_7]** **[CVS_3406016_8]** **[CVS_3406016_5]** **[CVS_3406016_15]**  (no prior guidance)

**Annual guidance for 2025:**
- **Cost Savings Initiative**: Over $500 million  **[CVS_3406016_7]** **[CVS_3406016_8]** **[CVS_3406016_5]** **[CVS_3406016_15]**  (no prior guidance)

No other metrics had updated numeric guidance for comparison.

b53af9a0d7c5ad2e3ce0adb9356626afc0396b5f2032dbbdd7da28de612512f0

Health Care Benefits

Health Services

Pharmacy & Consumer Wellness

Total Revenue

20cad2a2e588dc59a43f648b2fde531b7b490eabb57f4945cdf7f67204afd943

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2007  **[0000064803-24-000007_cvs-20231231.htm:286]**    | Present  | Current auditor   |

5ee29c37aac7f946ee7c6e683637ca6cfce309dc60d2da774e60db2328801e81

- Total Revenue: $95,428 million (+6% YoY)  **[0000064803-23-000047_cvs-20230930.htm:63]** **[0000064803-23-000047_cvs-20230930.htm:2]** **[0000064803-24-000034_cvs-20240930.htm:1]** **[0000064803-24-000034_cvs-20240930.htm:53]**   
- Health Care Benefits: $32,996 million (+26% YoY)  **[0000064803-23-000047_cvs-20230930.htm:55]** **[0000064803-24-000034_cvs-20240930.htm:11]**   
- Health Services: $44,129 million (**-6%** YoY)  **[0000064803-23-000047_cvs-20230930.htm:55]** **[0000064803-24-000034_cvs-20240930.htm:11]**   
- Pharmacy & Consumer Wellness: $32,423 million (+12% YoY)  **[0000064803-23-000047_cvs-20230930.htm:55]** **[0000064803-24-000034_cvs-20240930.htm:11]**   
- Operating Income (EBIT): $832 million (**-77%** YoY)  **[0000064803-23-000047_cvs-20230930.htm:63]** **[0000064803-23-000047_cvs-20230930.htm:2]** **[0000064803-24-000034_cvs-20240930.htm:1]** **[0000064803-24-000034_cvs-20240930.htm:53]**   
- Net Income: $71 million (**-97%** YoY)  **[0000064803-23-000047_cvs-20230930.htm:63]** **[0000064803-23-000047_cvs-20230930.htm:2]** **[0000064803-24-000034_cvs-20240930.htm:1]** **[0000064803-24-000034_cvs-20240930.htm:53]**   

076c5d4b0804240d6aef619c329c01624aae9c68d62cfad1e8e5f983d0d60c42

6a361d52370e0f6b1df54c515dbb39303deb20c4351596db8ac2850908acb88d

- **CVS Health lowered its full-year 2024 adjusted EPS guidance to at least $7**, down from previous expectations, due to **utilization pressures in Medicare Advantage**, resulting in significant losses; the company anticipates a **3 to 4-year journey to return to target margins of 4% to 5%** in this business.  **[CVS_3381801_2]** **[CVS_3381801_5]** **[CVS_3381801_8]**
- CVS **faced pressures in its Health Services segment** driven by **loss of a large client**, **in-sourcing by another client**, **supply shortages**, and **delays in the biosimilar product launch**, impacting earnings and the ability to meet performance guarantees.  **[CVS_3381801_17]** **[CVS_3381801_10]** **[CVS_3381801_12]**
- The company is **considering exiting certain counties** in its Medicare Advantage business to **prioritize margins over membership**, potentially **reducing future growth opportunities** in this segment.  **[CVS_3381801_15]** **[CVS_3381801_8]**

8e2431076865a7cf46f92167b031cc3be574e5424c277c34c8d80ba768a0b09b

- CVS Health **expects double-digit EPS growth in 2025**, aiming for **over $500 million in cost savings**, and expresses confidence in **positive momentum** across businesses, including strong retention in Aetna and Caremark.  **[CVS_3396958_12]**
- The company is **confident in improving Medicare Advantage margins by 100 to 200 basis points in 2025**, with potential benefits from **improved Star Ratings** aiding profitability.  **[CVS_3396958_19]** **[CVS_3396958_14]**
- CVS Health plans to **move the Commercial market to its CostVantage model by January 1, 2025**, which is expected to provide **predictable margins** and drive **cost savings**.  **[CVS_3396958_17]**

3fbda476a805932d746ae9a0dd1979d3910a2fa81fb898bf60846896470caf80

- **Strong prescription volume growth**: CVS's same-store prescription volumes increased by **4%** in the quarter, outperforming the market growth of mid-2%, driven by excellent service and customer experiences, indicating competitive strength.  **[CVS_3372169_17]**
- **Positive reception to new transparent pricing models**: CVS's new CostVantage model is receiving positive feedback from payers and is expected to provide greater transparency in drug pricing, potentially strengthening payer relationships and driving growth.  **[CVS_3372169_12]**
- **Health Care Delivery assets improving outcomes and reducing costs**: CVS's Health Care Delivery assets, including Oak Street Health, reduced trend by **1%** across their patient population through initiatives like e-consults, leading to better care quality and lower medical costs.  **[CVS_3372169_14]**

8acfc919ef0225a49c9d6f02fc584407dee845e9c096a8b525ba9329a514043c

1. **Medicare Advantage Margin Outlook**  
   **Q:** What's the plan to improve MA margins over years?  
   **A:** Management aims to improve Medicare Advantage margins but notes that due to changes from the Inflation Reduction Act affecting the Part D program, their target margin range has shifted from **4%–5%** down to **3%–5%**.  **[CVS_3406016_15]**  They've restructured benefits to drive margin improvement in 2025 and anticipate further gains into 2026, aided by better Star ratings, with two-thirds of members in **4.5-star plans**.  **[CVS_3406016_15]** 

2. **Exchange Business Losses and Actions**  
   **Q:** What's happening with the exchange business and future plans?  
   **A:** The exchange business faced significant losses in 2024, being a **$10 billion** block with over **1.9 million** members.  **[CVS_3406016_11]**  Growth was too fast, especially among SEP members, and they suffered from unfavorable product mix.  **[CVS_3406016_11]**  They've implemented double-digit rate increases and expect to shrink the book by **20%–25%** next year to improve performance.  **[CVS_3406016_11]** 

3. **Potential PDRs and Financial Impacts**  
   **Q:** Are there PDRs needed for 2025, and what's the impact?  
   **A:** Management does not anticipate needing premium deficiency reserves (PDRs) for individual Medicare or exchange businesses in 2025.  **[CVS_3406016_13]**  However, a PDR might be required for the group Medicare business due to multi-year contracts and less flexibility to improve year-over-year.  **[CVS_3406016_13]** 

4. **Pharmacy Services Outlook**  
   **Q:** How is the outlook for pharmacy services next year?  
   **A:** After a slow start in 2024, the Health Services segment gained momentum in Q2 and Q3.  **[CVS_3406016_12]**  They're entering a strong selling season, with successes in biosimilar launches and high client satisfaction.  **[CVS_3406016_12]**  Management expects continued strong performance but remains cautious given last year's slow start.  **[CVS_3406016_12]** 

5. **Signify and Oak Street Performance**  
   **Q:** Are Signify and Oak Street meeting expectations?  
   **A:** Signify had a great year with volumes up **37%** year-over-year in Q3.  **[CVS_3406016_16]**  Oak Street performed in line with guidance; while facing Medicare market pressures, they've maintained a risk adjustment headwind below **3%**.  **[CVS_3406016_16]**  There's potential for positive tailwinds next year as they grow Aetna membership in clinics.  **[CVS_3406016_16]** 

6. **Cost Vantage Program Progress**  
   **Q:** What's the status of the Cost Vantage program?  
   **A:** The Cost Vantage program, launched to address reimbursement pressures, now has over **50%** of clients enrolled.  **[CVS_3406016_17]**  They expect to have **100%** of their commercial book signed by year-end.  **[CVS_3406016_17]**  Management is excited about its potential to transform pharmaceutical pricing and reduce cross-subsidization.  **[CVS_3406016_17]** 

7. **Medicare Advantage Bids and Disenrollment**  
   **Q:** How are MA bids affecting membership and margins?  
   **A:** Early indicators suggest membership will decline by **5%–10%**, mainly in individual and dual-eligible populations.  **[CVS_3406016_9]**  They've made deliberate benefit design changes and exited underperforming areas, impacting nearly **0.5 million** members, to improve profitability in 2025.  **[CVS_3406016_9]**  An **$800 million** tailwind is expected from contracts now rated **4 stars or better**.  **[CVS_3406016_9]** 

edb12e6983765fa9038c6f09b724c54b9d7fb36905f5cfcd8777059cfdef342a

1. **2025 EPS Growth**  
   **Q:** Will you still deliver double-digit EPS growth in 2025?  
   **A:** Karen Lynch affirmed that their goal remains double-digit EPS growth in 2025 and they are striving to achieve that. They feel good about positive momentum going into 2025 but will provide more detailed guidance later in the year.  **[CVS_3396958_12]** 

2. **Medicare Advantage Margins**  
   **Q:** Can you achieve 100–200 bps margin improvement in Medicare Advantage?  
   **A:** They expect to achieve **100 to 200 basis points** of margin improvement in Medicare Advantage in 2025.  **[CVS_3396958_10]**  They have made meaningful adjustments to their offerings and feel confident in this target, though achieving the higher end will depend on trends over the remainder of the year.  **[CVS_3396958_14]** 

3. **Cost Trends in Medicare**  
   **Q:** How are elevated cost trends impacting your outlook?  
   **A:** They are experiencing all-in, including pharmacy, **double-digit trends** in Medicare costs.  **[CVS_3396958_13]**  They have assumed these elevated trends will persist into 2025 and have been very conservative in both the baseline and trend assumptions.  **[CVS_3396958_14]** 

4. **Membership Declines in Medicare Advantage**  
   **Q:** Should we expect up to 10% MA membership decline in 2025?  
   **A:** They anticipate a **5% to 10%** decline in Medicare Advantage membership in 2025 due to county exits and restructuring products to achieve target margins, which may result in lower resales.  **[CVS_3396958_11]** 

5. **$500 Million Cost Savings**  
   **Q:** How will the $500 million cost savings affect 2025 earnings?  
   **A:** They have line of sight to over **$500 million** of incremental cost savings in 2025, which will help drive results and invest in products and infrastructure.  **[CVS_3396958_12]**  These efficiencies will allow them to strive toward their double-digit EPS growth goal.

6. **Stars Ratings Impact**  
   **Q:** Has anything changed regarding Stars Ratings benefits in 2025?  
   **A:** Their Stars Ratings have actually improved due to changes earlier in the quarter, providing an incremental tailwind for 2025.  **[CVS_3396958_19]** 

7. **Aetna Leadership Changes**  
   **Q:** What are your priorities after the Aetna leadership change?  
   **A:** Karen Lynch is establishing a strong management process and driving execution of improved financial and operational performance at Aetna, as the financial performance was not meeting her expectations.  **[CVS_3396958_20]** 

8. **PBM Pricing Model Changes**  
   **Q:** How is the CostVantage model progressing with PBMs?  
   **A:** They have signed contracts with eight PBMs and are transitioning all Commercial contracts to the CostVantage model by **January 1, 2025**.  **[CVS_3396958_15]**  They continue to have productive discussions with large PBM partners.  **[CVS_3396958_15]** 

9. **Part D Marketplace Stability**  
   **Q:** Does the CMS Part D demo help de-risk the marketplace?  
   **A:** They are pleased that CMS offered the Part D program to restabilize premiums. They have applied for the demonstration and are looking forward to working out the details.  **[CVS_3396958_16]** 

10. **Addressing PBM Criticism**  
    **Q:** How are you addressing negative perceptions of PBMs?  
    **A:** They have aggressively been educating Congress on the role of PBMs and demonstrating the savings they provide.  **[CVS_3396958_21]**  They are leading industry change by evolving pricing models for greater transparency.  **[CVS_3396958_21]** 

11. **Managing Dual Reimbursement Structures**  
    **Q:** How will you handle dual reimbursement if not all PBMs adopt CostVantage?  
    **A:** They intend to move all Commercial contracts to CostVantage by **January 1, 2025**, while Medicare and Medicaid will transition later. They are prepared to handle multiple pricing models during the transition.  **[CVS_3396958_17]** 

12. **Confidence in Revised Guidance**  
    **Q:** How can investors be confident in your revised guidance?  
    **A:** They have incorporated prudent assumptions, expecting trends to persist or modestly increase, and have accounted for pressures from Medicare, risk adjustment, and Medicaid acuity.  **[CVS_3396958_22]**  They have tried to incorporate as much prudence into the outlook as appropriate.  **[CVS_3396958_22]** 

7621ee4ce601c232e7355aa43fc45e397255b39f37331c939fb1abf02e475956

1. **Medicare Advantage Margin Recovery**  
   **Q:** Will you recover margins in Medicare Advantage in 2025?  
   **A:** Management is committed to achieving the **4%-5% margin** target for Medicare Advantage in 2025.  **[CVS_3372169_9]**  They acknowledge challenges like flat rates not covering cost trends and uncertainties from the Inflation Reduction Act.  **[CVS_3372169_9]**  They plan to take additional margin actions beyond the Stars rating improvements and expect significant tailwinds from **800,000 new members**, whose coding and distribution costs will improve in 2025.  **[CVS_3372169_9]** 

2. **2024 Medical Benefit Ratio Increase**  
   **Q:** What is driving the increase in 2024 Medical Benefit Ratio?  
   **A:** The year-over-year increase in Medical Benefit Ratio is almost entirely due to Medicare Advantage.  **[CVS_3372169_11]**  About **65 basis points** relates to the **$800 million Stars rating headwind**, with the remainder from new member mix and provisions for Medicare utilization pressure.  **[CVS_3372169_11]** 

3. **New Retail Pharmacy Pricing Model**  
   **Q:** How are payers reacting to your new pharmacy pricing model?  
   **A:** Initial feedback from payers on the new pricing model has been generally positive.  **[CVS_3372169_12]**  CVS is leading in providing greater transparency in drug pricing, passing through acquisition costs to payers.  **[CVS_3372169_12]**  This approach aims to address issues like cross-subsidization and focuses on affordability and simplicity.  **[CVS_3372169_12]** 

4. **Medicare Advantage Bidding Strategy**  
   **Q:** How will your 2025 bid strategy impact margins and growth?  
   **A:** The company prioritizes margin recovery over market share gains.  **[CVS_3372169_10]**  While committed to achieving the **4%-5% margin** target, they believe they can still grow by leveraging their assets and providing superior customer experiences.  **[CVS_3372169_10]**  The return of higher Stars ratings and significant membership growth offer tailwinds for 2025.  **[CVS_3372169_10]** 

5. **Health Services Guidance Adjustment**  
   **Q:** Why did you adjust Health Services profit guidance for 2024?  
   **A:** Management adjusted the guidance due to potential utilization pressures in the external environment.  **[CVS_3372169_14]**  They incorporated prudence into their outlook, especially within Health Care Delivery assets, in light of marketplace trends and their own fourth-quarter experience.  **[CVS_3372169_14]** 

6. **Impact of New Members on Future Earnings**  
   **Q:** How will new members affect your performance in 2025?  
   **A:** The new membership provides an important tailwind for 2025.  **[CVS_3372169_8]** **[CVS_3372169_9]**  As these **800,000 new members** are fully coded next year and distribution costs decrease, margins are expected to improve.  **[CVS_3372169_9]**  Risk scores for new members look reasonable, and **one-third are D-SNPs** without Stars issues.  **[CVS_3372169_8]** 

7. **Pharmacy Script Volume Growth**  
   **Q:** What is driving growth in pharmacy script volume?  
   **A:** Pharmacy script volume saw same-store growth in the **high 4% range**, outpacing market growth in the mid-2% range.  **[CVS_3372169_16]**  Strong service and customer experiences are contributing factors.  **[CVS_3372169_16]**  The company is confident about script performance and continues to focus on market share growth to offset reimbursement pressures.  **[CVS_3372169_16]** 

8. **Cordavis Contribution to Profit**  
   **Q:** How is Cordavis contributing to your financials?  
   **A:** Cordavis is expected to make a positive contribution to the Health Services segment profit.  **[CVS_3372169_19]**  While specific figures are not disclosed, management is pleased with the progress to date and will provide more details as the year progresses.  **[CVS_3372169_19]** 

9. **Potential PBM Regulatory Changes**  
   **Q:** What are your thoughts on potential PBM transparency regulations?  
   **A:** Management anticipates that any legislation passed will focus on transparency.  **[CVS_3372169_19]**  CVS's initiatives like TrueCost and CostVantage are resonating with legislators and are aimed at improving cost transparency, aligning with potential regulatory directions.  **[CVS_3372169_19]** 

10. **RSV Impact on Financials**  
    **Q:** How did RSV vaccinations affect your results?  
    **A:** RSV vaccinations were a net tailwind for the enterprise in the fourth quarter.  **[CVS_3372169_18]**  While there was pressure in the Medicare business due to vaccination costs, the Pharmacy & Consumer Wellness segment benefited.  **[CVS_3372169_18]**  For 2024, management is cautious due to the newness of these vaccines.  **[CVS_3372169_18]** 

affd09eddaf18b728fc70c998e784174a01d61172c8c0ce868ccc9ab20acd56a

- **Strong performance in Pharmacy and Consumer Wellness segment**: CVS achieved a record-high retail pharmacy script share of **27.3%**, up **70+ basis points year-over-year**  **[CVS_3406016_14]** . This growth is attributed to improved service levels, with Net Promoter Score (NPS) levels up **hundreds of basis points** year-over-year, driving strong prescription growth  **[CVS_3406016_14]** .
- **Strategic initiatives driving margin expansion in 2025**: CVS expects margin expansion due to deliberate benefit design changes, exiting underperforming products, and an anticipated **$800 million tailwind** from improved Star ratings for 2025, with **two-thirds of Medicare Advantage members** in **4.5-star plans**  **[CVS_3406016_9]** **[CVS_3406016_16]** . These actions are aimed at improving profitability and driving margin growth into 2026  **[CVS_3406016_9]** **[CVS_3406016_16]** .
- **Successful rollout of Cost Vantage program**: CVS's Cost Vantage program, aimed at addressing reimbursement pressure and transforming pharmaceutical pricing, has over **50% of clients enrolled**, with expectations to have **100% of the commercial book** signed by the end of the year  **[CVS_3406016_17]** . This initiative is expected to bring stability to pricing strategies and improve service to members and clients  **[CVS_3406016_17]** .

0a530bd9648992a21b6baa2ff194dfce454d5d38dead56f045e3d8aba12df42c

1. **Medicare Advantage Margin Improvement**  
   **Q:** How much will MA margins improve in 2025?  
   **A:** CVS aims for up to **200 basis points** of margin improvement in Medicare Advantage in 2025.  **[CVS_3381801_8]**  They plan to achieve this through pricing actions, benefit adjustments, and exiting certain service areas.  **[CVS_3381801_8]**  A **$700 million** Stars rating tailwind is expected, assuming stabilized membership.  **[CVS_3381801_8]** 

2. **Focus on Margin Over Membership**  
   **Q:** Will pricing changes lead to MA membership loss?  
   **A:** CVS is focused on **margin over membership** and is willing to lose some Medicare Advantage members due to pricing actions and benefit reductions.  **[CVS_3381801_10]**  While they aim for membership stability, they acknowledge that significant pricing actions may result in a membership decline.  **[CVS_3381801_10]** 

3. **Q1 Cost Trends and $500M Non-Recurring Costs**  
   **Q:** What caused the $500M non-recurring costs in Q1?  
   **A:** The **$500 million** in non-recurring costs in Q1 was driven by seasonality adjustments on inpatient costs, negative prior year developments, provider liability settlements, policy liberalizations, and initial reserve builds for new membership growth.  **[CVS_3381801_7]**  These costs are not expected to recur.  **[CVS_3381801_7]** 

4. **Health Services Guidance Reduction**  
   **Q:** How much of the $400M reduction is Oak Street?  
   **A:** Of the **$400 million** reduction in Health Services guidance, the majority is from Health Care Delivery, with unfavorability on CVS Accountable Care being the largest driver.  **[CVS_3381801_15]**  The remaining portion is related to Oak Street.  **[CVS_3381801_15]** 

5. **Pharmacy Services and GLP-1 Impact**  
   **Q:** What's pressuring pharmacy services mix?  
   **A:** Changes in mix and challenges in managing the GLP-1 category led to missing some guarantees in pharmacy services.  **[CVS_3381801_17]**  The unprecedented demand and high price of GLP-1 drugs are causing significant costs for clients and increased expenses for CVS.  **[CVS_3381801_17]** 

6. **Care Management Tools Impact**  
   **Q:** How are care management tools affecting results?  
   **A:** CVS is using advanced AI tools to enhance care management, identifying high-risk members and improving engagement.  **[CVS_3381801_16]**  These efforts are expected to have modest impacts in 2024 and become a differentiator over time.  **[CVS_3381801_16]** 

7. **Cordavis Launch and Biosimilars**  
   **Q:** How is Cordavis performing with biosimilars?  
   **A:** After launching the biosimilar to Humira on April 1, CVS achieved over **90% volume migration** in the first month, surpassing all 2023 biosimilar volume in just 3 weeks.  **[CVS_3381801_14]**  They are delivering **50% savings** on prior run rates, with **80% of members** experiencing **$0 out-of-pocket** costs.  **[CVS_3381801_14]** 

a18a1620431e1873a051402a259a1616e5ad6747f040b0c8a2151d3c6c85d7d4

- **CVS Health expects a decline in Medicare Advantage membership of 5% to 10% in 2025**, due to county exits and restructuring of products, which could impact revenue growth.  **[CVS_3396958_11]**
- **Aetna's financial performance is not meeting expectations**, leading to leadership changes, including Karen Lynch assuming direct leadership and establishing new priorities to improve financial and operational performance.  **[CVS_3396958_20]**
- **There is uncertainty around achieving the higher end of the Medicare Advantage margin improvement target** (100 to 200 basis points), due to trends in medical cost utilization, which may pressure profit margins.  **[CVS_3396958_14]**

1d6e3c0de3ec8d2d7c6603e248654afa443cd3690674e957c83c47987b6bff1e

- **Significant success in biosimilars strategy:** CVS Health has demonstrated strong performance with its Cordavis business by effectively launching the Humira biosimilar. In just three weeks since April 1, they surpassed all of **2023's biosimilar volume**, achieving over **90% conversion** and delivering a **50% cost savings** on the **2022 run rate** for the drug. This highlights their leadership in specialty pharmacy and positions them for growth in the **$100 billion biosimilars market by 2030**.  **[CVS_3381801_14]**
- **Commitment to improving Medicare Advantage margins:** CVS is taking decisive actions to enhance profitability in its Medicare Advantage business, including adjusting pricing, benefits, and potentially exiting certain markets. They are focusing on **margin over membership**, aiming to return to target margins of **4% to 5%** over the next **three to four years**. This strategic focus is expected to drive significant earnings improvement.  **[CVS_3381801_15]** **[CVS_3381801_8]**
- **Leveraging AI and integrated care management tools:** CVS is investing in advanced AI capabilities to enhance care management programs, better engage members, and improve health outcomes. By integrating resources from acquisitions like **Signify Health and Oak Street Health**, they expect to differentiate themselves and positively impact medical cost trends over time.  **[CVS_3381801_16]**

ea60ab5c70c53bfc31f6411f59fc58bbc3df1e8ebf79190f251c3c6bafa266a3

- **CVS Health observed elevated medical cost trends in their Medicare Advantage business in Q4 2023**, leading to an increase in their full-year 2024 medical benefit ratio guidance by 50 basis points to **87.7%**, reflecting higher-than-expected utilization in outpatient services, supplemental benefits, and vaccinations.  **[CVS_3372169_7]**
- **The Medicare Advantage business is now projected to be only marginally profitable in 2024**, indicating potential margin pressure and challenges in managing medical cost trends and utilization.  **[CVS_3372169_7]**
- **CVS Health increased their estimate for medical costs by over $400 million in their 2024 guidance**, due to trend pressures in Medicare, which could negatively impact the company's financial performance.  **[CVS_3372169_7]**

3749a2bc312e5eabea789638652d4076b1ee19ff314f05ba396d100a5dd50fb5

- **CVS anticipates Medicare Advantage membership disenrollment of 5% to 10% in 2025**, due to benefit reductions and exiting underperforming counties, potentially impacting revenue and profitability.  **[CVS_3406016_9]**
- **Unfavorable medical cost trends in the Health Care Benefits segment are expected to reach the highest levels**, with these trends projected to persist through Q4 2024.  **[CVS_3406016_10]**
- **Medical Loss Ratios (MLR) are expected to increase significantly**, potentially reaching **95.5%** in Q4 2024, indicating rising costs and pressure on margins.  **[CVS_3406016_10]**

6f33f816554453b8fa5f4c9afda92a785551c65038742663b2ba763409a4dc15

CVS Health Corp (CVS)

Financials