CVS Health (CVS) 10-K risk factor changes: FY2018 vs FY2017

In that regard, we maintain contractual relationships with generic [removed: pharmaceutical] [added: drug] manufacturers and brand name [removed: pharmaceutical] [added: drug] manufacturers that provide for purchase discounts and/or rebates on drugs dispensed by pharmacies in our retail network and by our specialty and mail order pharmacies (all or a portion of which may be passed on to clients).

[removed: Manufacturer] [added: Manufacturer’s] rebates often depend on a PBM’s ability to meet contractual market share or other requirements, including in some cases the placement of a manufacturer’s products on the PBM’s formularies.

[added: If we lose our relationship with one] or more [removed: pharmaceutical] [added: drug] manufacturers, or if the discounts or rebates provided by [removed: pharmaceutical] [added: drug] manufacturers decline, our [removed: business] [added: businesses] and [removed: financial] results [added: of operations] could be adversely affected.

Further, competitive pressures in the PBM industry have resulted in our clients sharing in a larger portion of rebates and/or discounts received from [removed: pharmaceutical] [added: drug] manufacturers.

[removed: Market] [added: Marketplace] dynamics and regulatory changes [added: also] have impacted our ability to offer plan sponsors pricing that includes the use of retail “differential” or “spread”, which could [removed: negatively impact] [added: adversely affect] our future [removed: profitability.][added: profitability, and we expect these trends to continue.]

Further, changes in existing federal or state laws or regulations or the adoption of new laws or regulations relating to [added: additional regulation of PBMs, drug pricing or purchasing,] patent term extensions, purchase discount [removed: and] [added: and/or] rebate arrangements with [removed: pharmaceutical] [added: drug] manufacturers, or [removed: to] [added: additional regulation of PBMs,] formulary management or other PBM services could also reduce the discounts or rebates we receive.

In addition, changes in federal or state laws or regulations or the adoption of new laws or regulations relating to claims processing and billing, including our ability to use MAC lists and collect transmission fees, could adversely [removed: impact] [added: affect] our profitability.

Our retail pharmacy, specialty pharmacy and LTC pharmacy operations [removed: have] also [added: have] been affected by the margin pressures described above, including client demands for lower prices, generic pricing and network reimbursement pressure.

In addition, as competition increases in the [removed: markets] [added: geographies] in which we operate, [added: including competition from new entrants,] a significant increase in general pricing pressures could occur, and this could require us to reevaluate our pricing structures to remain competitive.

A shift in the mix of our pharmacy prescription volume towards programs offering lower reimbursement rates could adversely affect our margins, including the [added: ongoing] shift in pharmacy mix towards 90-day prescriptions at retail and the [added: ongoing] shift in pharmacy mix towards Medicare Part D prescriptions.

Efforts to reduce reimbursement levels and alter health care financing [removed: practices.][added: practices could adversely affect our businesses.]

The continued efforts of [removed: health maintenance organizations, managed care organizations,] [added: HMOs, MCOs,] PBMs, government entities, and other third party payors to reduce prescription drug costs and pharmacy reimbursement rates, as well as litigation and other legal proceedings relating to how drugs are priced, may [removed: impact] [added: adversely affect] our profitability.

In particular, increased utilization of generic [removed: pharmaceuticals] [added: drugs] (which normally yield a higher gross profit rate than equivalent brand named drugs) has resulted in pressure to decrease reimbursement payments to retail, specialty, LTC and mail order pharmacies for generic drugs, causing a reduction in [removed: the] [added: our margins on sales of] generic [removed: profit rate.][added: drugs.]

Historically, the effect of this trend on generic profitability has been mitigated by [added: the introduction of new multi-source generic drugs as well as inflation on brand name drugs and by] our efforts to negotiate reduced acquisition costs of generic [removed: pharmaceuticals] [added: drugs] with manufacturers.

However, in recent years, there has been significant consolidation within the generic manufacturing [removed: industry,] [added: industry] and [added: in 2019 we expect fewer new multi-source generic drugs to be introduced and lower brand name drug inflation than in recent prior years, and] it is possible that [removed: this] [added: these] and other external factors may enhance the ability of manufacturers to sustain or increase pricing of generic [removed: pharmaceuticals] [added: drugs] and diminish our ability to negotiate reduced acquisition costs.

[removed: Any inability to offset increased] [added: generic prescription drug] costs or to modify our activities to lessen the [added: financial] impact [added: of such increased costs] could have a significant adverse effect on our results of operations.

For example, we anticipate that federal and state governments will continue to review and assess alternative health care delivery systems, payment methodologies and operational requirements for health care providers, including LTC facilities and [removed: pharmacies.][added: pharmacies, and participants in government funded health care programs.]

A change in the composition of pharmacy prescription volume toward programs offering lower reimbursement rates could [removed: negatively impact] [added: adversely affect] our profitability.

Any action taken to repeal or replace all or significant parts of ACA [removed: could] also [removed: impact] [added: could adversely affect] our profitability, though it is unclear at this time what the full effects [removed: will] [added: of any such changes would] be.

[added: The] ACA made several significant changes to Medicaid rebates and to [removed: reimbursement.][added: reimbursement rates.]

One of these changes was to revise the definition of the Average Manufacturer Price, a pricing element common to most payment formulas, and the reimbursement formula for [removed: multi-source (i.e., generic)] [added: generic] drugs.

In addition, [added: the] ACA made other changes that affect the coverage and plan designs that are or will be provided by many of our health plan clients, including the requirement for health insurers to meet a minimum [removed: medical loss ratio] [added: MLR] to avoid having to pay rebates to enrollees.

These ACA changes may not affect our [removed: business] [added: businesses] directly, but they could indirectly impact our [removed: services and/or] [added: services,] business [removed: practices.][added: practices and/or results of operations.]

[removed: A] [added: We operate in a] highly competitive business environment.

Each of our [removed: retail pharmacy, LTC pharmacy, retail health clinic and pharmacy services operations] [added: businesses] currently operates in a highly competitive and evolving [removed: health care] [added: business] environment.

The competitive success of our retail pharmacy business, as well as our specialty pharmacy operations with [removed: non-Caremark] [added: third-party] payors, is [removed: derived by their] [added: dependent on our] ability to establish and maintain contractual relationships with PBMs and other payors on acceptable terms in an environment where some PBM clients are considering adopting narrow or restricted retail pharmacy networks.

As a pharmacy retail business, we compete with other drugstore chains, supermarkets, [removed: on-line] [added: online] and other discount retailers, independent pharmacies, membership clubs, convenience stores and mass merchants, some of which are aggressively expanding into markets we serve.

We also face competition from other retail health [added: care] clinics, as well as other mail order pharmacies and PBMs.

Competition [removed: may] also [added: may] come from other sources in the future.

Changes in market dynamics or the actions of competitors or manufacturers, including industry consolidation, the emergence of new competitors and strategic alliances, and [removed: the exclusion] [added: decisions to exclude us] from new narrow or restricted [added: retail pharmacy] networks, could materially and adversely [removed: impact us.][added: affect our businesses, results of operations, cash flows and prospects.]

We [removed: could] also [added: could] be adversely affected if we fail to identify or effectively respond to changes in market dynamics.

Because our specialty pharmacy operations [removed: focuses] [added: focus] on complex and high-cost medications that serve a relatively limited universe of patients, the future growth of this business depends to a significant extent upon expanding our ability to access key drugs and successfully penetrate key treatment categories.

In the geographic regions we serve, we compete with PharMerica, our largest [added: LTC pharmacy] competitor, as well as with numerous local and regional institutional pharmacies, pharmacies owned by long-term care facilities and local retail pharmacies.

Our [removed: long-term care] [added: LTC pharmacy] customers consist of skilled nursing facilities, assisted living facilities, independent living communities, hospitals, correctional facilities, and other health care service providers.

The ability of a resident of an assisted living facility to select the pharmacy that supplies him or her with [removed: pharmaceuticals] [added: prescription drugs] could adversely affect our business, financial condition and results of operations because there can be no assurance that such resident will select us.

[removed: Competitors in the PBM industry (e.g., Express Scripts,] OptumRx, Prime Therapeutics, MedImpact and Humana), include large, national PBM companies, PBMs owned by large national health plans and smaller standalone PBMs.

Competitors in each of our [removed: business areas] [added: businesses] may offer services and pricing terms that we may not be willing or able to offer.

[removed: Strong] [added: For example, strong] competition in the PBM marketplace has generated greater client demand for lower pricing, increased revenue sharing and enhanced product and service offerings.

[removed: While it] [added: It] is not possible to predict whether [removed: and] [added: or] when any such changes will occur or what form any such changes may take (including through the use of [removed: Executive Orders), specific proposals discussed by the] [added: United States] Presidential [removed: Administration could have a material adverse effect on our business, liquidity and results of operations include, but are not limited to, immigration policies, the modification of ACA.][added: Executive Orders).]

Other significant changes to health care system legislation or regulation as well as changes with respect to tax and trade policies, tariffs and other government regulations affecting trade between the United States and other countries are also [removed: possible.][added: possible and could adversely affect us.]

You should carefully consider each of the following risks and uncertainties and all of the other information set forth in this Annual Report on Form 10-K.

These risks and uncertainties and other factors may affect forward-looking statements, including those we make in this Annual Report on Form 10-K or elsewhere, such as in news releases or investor or analyst calls, meetings or presentations.

The risks and uncertainties described below are not the only ones we face.

There can be no assurance that we have identified all the risks that affect us.

Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may adversely affect our businesses.

Any of these risks or uncertainties could cause our actual results to differ materially from our expectations and the expected results discussed in our forward-looking statements.

You should not consider past results to be an indication of future performance.

If any of the following risks or uncertainties develops into actual events or if the circumstances described in the risks or uncertainties occur or continue to occur, these events or circumstances could have a material adverse effect on our businesses, results of operations, cash flows and/or financial condition.

In that case, our stock price could decline materially, among other effects on us.

Overarching Risks

Risks to our brand and reputation, the Aetna Acquisition, data governance risks, effectiveness of our talent management and alignment of talent to our business needs, and potential changes in public policy, laws and regulations present overarching risks to our enterprise in 2019 and beyond.

We expect to face significant business challenges and uncertainties in 2019.

Risks to our brand and reputation, the Aetna Acquisition, data governance risks, effectiveness of our talent management and alignment of talent to our business needs, and potential changes in public policy, laws and regulations present overarching risks to our enterprise in 2019 and beyond.

There can be no assurance regarding our ability to avoid harm to our brand and reputation, our ability to manage the risks inherent in the Aetna Acquisition or our data governance risks, our ability to manage and align our talent to our business needs or our ability to manage the risks presented by changes in public policy, laws or regulations.

In addition, there can be no assurance that the Aetna Acquisition, United States government fiscal policy, changes to the United States health care system (including changes to the ACA, to drug reimbursement and/or drug pricing laws and regulations and/or to laws and regulations governing PBMs’ interactions with government funded health care programs) or other unanticipated risks will not require us to revise the ways in which we conduct business, put us at risk of loss of business or materially adversely affect our businesses, cash flows, financial condition or results of operations.

Page 28

Our brand and reputation are two of our most important assets; negative public perception of the industries in which we operate, or of our industries’ or our practices, can adversely affect our businesses, results of operations, cash flows and prospects.

Reputational risk is inherent in many of the risks we face.

The industries in which we operate regularly are negatively perceived by the public and subject to negative publicity, including as a result of adverse media coverage, litigation against us and other industry participants, the ongoing public debates over drug pricing, government involvement in drug pricing and purchasing, PBMs and the future of the ACA, governmental hearings and/or investigations and actual or perceived shortfalls regarding our industries’ or our own products and/or business practices (including PBM operations, drug pricing, insurance coverage determinations and social media and other media relations activities).

This risk may be increased as the federal government continues to consider increased involvement in drug reimbursement, pricing and/or purchasing and changes to the laws and regulations governing PBMs’, PDPs’ and/or Managed Medicaid organizations’ interactions with government funded health care programs, and as states seek to maintain, replace or repeal elements of the ACA such as Public Exchanges and Medicaid expansion within increasingly challenging budget constraints.

This risk also may be increased as we continue to offer products and services that make greater use of data and as our business model becomes more focused on delivering health care to consumers.

Significant reductions or interruptions in funding for government health programs we serve also may lead us to reduce our exposure to these programs, which could adversely affect our brand and reputation.

Negative public perception and/or publicity of our industries in general, or of us or our key vendors, brokers or product distribution networks in particular, can further increase our costs of doing business and adversely affect our results of operations and our stock price by:

| | |

| --- | --- |

| • | Adversely affecting our brand and reputation; |

| | |

| --- | --- |

| • | Adversely affecting our ability to market and sell our products and/or services and/or retain our existing customers and members; |

| | |

| --- | --- |

| • | Requiring us to change our products and/or services; |

| | |

| --- | --- |

| • | Reducing or restricting the compensation we can receive for our products and/or services; and/or |

| | |

| --- | --- |

| • | Increasing or significantly changing the regulatory and legislative requirements with which we must comply. |

Data governance failures can adversely affect our reputation, businesses and prospects.

Our use and disclosure of members’, customers’ and other constituents’ sensitive information is subject to complex regulations at multiple levels.

Our business is subject to various industry, economic, regulatory and other risks and uncertainties.

Our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected by any one or more of the following risk factors and by additional risks and uncertainties not presently known to us or that we currently deem to be immaterial:

Risks of declining gross margins in the PBM, retail pharmacy and LTC pharmacy industries.

If we lose our relationship with one

This change has negatively affected our reimbursement.

We believe that the assisted living segment, where residents can choose which pharmacy will provide them with pharmaceuticals, is projected to grow the most as a percentage of the total LTC sector over the near term.

Changes in U.S. policy, laws and regulations, including reform of the United States health care system.

The results of the November 2016 elections continue to generate some uncertainty with respect to, and could result in, significant changes in legislation, regulation and government policy that could significantly impact our business and the health care and retail industries.

Risks related to compliance with a broad and complex regulatory framework.

Our business is subject to numerous federal, state and local laws and regulations.

See “Business - Government Regulation.” In addition, during the past several years, the United States health care industry has been subject to an increase in governmental regulation and enforcement activity at both the federal and state levels.

Further, uncertainties exist regarding the application of many of these legal requirements to our business.

In addition, it is possible that certain provisions of the current health care reform legislation may be modified, repealed or otherwise invalidated.

Changes in these laws and regulations and the related interpretations and enforcement practices may require extensive system and operating changes that may be difficult to implement.

Untimely compliance or noncompliance with applicable laws and regulations could adversely affect the continued operation of our business, including, but not limited to: imposition of civil or criminal penalties; significant fines or monetary penalties; suspension or disgorgement of payments from government programs; loss of required government certifications or approvals; loss of authorizations to participate in or exclusion from government reimbursement programs, such as the Medicare and Medicaid programs; or loss of registrations or licensure.

The regulations to which we are subject include, but are not limited to: the laws and regulations described in the Government Regulation section; accounting standards; financial disclosure; securities laws and regulations; federal anti-trust laws; tax laws and regulations and their possible reform; laws and regulations relating to the protection of the environment and health and safety matters, including those governing exposure to, and the management and disposal of, hazardous materials and wastes; and laws and regulations of the FTC, the FCC, and the Consumer Product Safety Commission, as well as state regulatory authorities, governing the sale, advertisement and promotion of products that we sell, such as Boards of Pharmacy.

The FDA, DEA and various states regulate the distribution of pharmaceuticals and controlled substances.

We are required to hold valid DEA and state-level registrations and licenses, meet various security and operating standards and comply with the federal and various states’ controlled substances acts and their accompanying regulations governing the sale, marketing, packaging, holding and distribution of controlled substances.

The DEA, FDA and state regulatory authorities have broad enforcement powers, including the ability to suspend our registrations and licenses, seize or recall products and impose significant criminal, civil and administrative sanctions for violations of these laws and regulations.

In addition, our business interests outside of the United States are subject to the Foreign Corrupt Practices Act and other applicable domestic and international laws and regulations.

We are also subject to the terms of various government agreements and mandates, including those described in the Government Regulation section.

In that regard, our business, financial position and results of operations could be adversely affected by existing and new government legislative, regulatory action and enforcement activity, including, without limitation, any one or more of the following:

| | · | | federal and state laws and regulations concerning the submission of claims for reimbursement by Medicare, Medicaid and other government programs, whether at retail, mail, specialty or LTC; |

| --- | --- | --- | --- |

| | · | | federal and state laws and regulations governing the purchase, distribution, tracking, management, compounding, dispensing and reimbursement of prescription drugs and related services, whether at retail, mail, specialty or LTC, and applicable registration or licensing requirements; |

| | · | | heighted enforcement of controlled substances regulations; |

| | · | | the effect of the expiration of patents covering brand name drugs and the introduction of generic products; |

| | · | | the frequency and rate of approvals by the FDA of new brand name and generic drugs, or of over-the-counter status for brand name drugs; |

| | · | | rules and regulations issued pursuant to HIPAA and the HITECH Act; and other federal and state laws affecting the collection, use, disclosure and transmission of health or other personal information, such as federal laws on information privacy precipitated by concerns about information collection through the Internet, state security breach laws and state laws limiting the use and disclosure of prescriber information; |

| | · | | health care fraud and abuse laws regulations; |

| | · | | consumer protection laws affecting our health care services, our loyalty programs, our drug discount card programs, the products we sell, the informational calls we make and/or the marketing of our goods and services; |

| | · | | federal, state and local environmental, health and safety laws and regulations applicable to our business, including the management of hazardous substances, storage and transportation of hazardous materials, and various recordkeeping disclosure and procedure requirements promulgated by the Occupational Safety and Health Administration that may apply to our operations; |

| | · | | health care reform, managed care reform and plan design legislation; |

| | · | | laws against the corporate practice of medicine; |

| | · | | FDA regulation affecting the retail, LTC, specialty or PBM industry; |

| | · | | government regulation of the development, administration, review and updating of formularies and drug lists including requirements and/or limitations around formulary tiering and patient cost sharing; |

| | · | | state laws and regulations related to increased oversight of PBM activities by state departments of insurance pharmacy reimbursement for generics and pharmacy audits; |

| | · | | drug pricing legislation, including “most favored nation” pricing; |

| | · | | federal and state laws and regulations establishing or changing prompt payment requirements for payments to retail pharmacies; |

| | · | | impact of network access legislation or regulations, including “any willing provider” laws, on our ability to manage pharmacy networks; |

[removed: We refer you to] [added: The information contained in] “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations,”] [added: Operations” in the Annual Report,] which includes [removed: our] [added: the] “Cautionary Statement Concerning Forward-Looking Statements” at the end of such [removed: section of our Annual Report to Stockholders for the year ended December 31, 2017, which section] [added: section,] is incorporated by reference herein.

The information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk” in the Annual Report is incorporated by reference herein.

As of December 31, 2017, the Company had outstanding interest rate derivative instruments and believes that as of December 31, 2017, its exposure to interest rate risk (inherent in the Company's debt portfolio) is not material.

We refer you to Note 1 “Significant Accounting Policies” contained in the “Notes to the Consolidated Financial Statements” of our Annual Report to Stockholders for the year ended December 31, 2017, which section is incorporated by reference herein.

As of December 31, 2017, the Company did not have any foreign currency exchange rate or commodity derivative instruments in place and believes that as of December 31, 2017, its exposure to foreign currency exchange rate risk and commodity price risk is not material

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is [removed: a pharmacy] [added: the nation’s premier health] innovation company helping people on their path to better health.

[removed: Through] [added: The Company has] more than [removed: 9,800] [added: 9,900] retail locations, [removed: more than] [added: approximately] 1,100 walk-in [removed: health care] [added: medical] clinics, a leading pharmacy benefits manager with [removed: more than 94] [added: approximately 92] million plan members, a dedicated senior pharmacy care business serving more than one million patients per year, expanding specialty pharmacy [removed: services] [added: services,] and a leading stand-alone Medicare Part D prescription drug [removed: plan, we enable people, businesses, and communities to manage health in more affordable, effective ways.][added: plan.]

Under the terms of the merger agreement, Aetna shareholders [removed: will receive] [added: received] $145.00 [removed: per share] in cash and 0.8378 CVS Health shares for each Aetna share.

Including the assumption of Aetna’s debt, the total value of the transaction [removed: is] [added: was] approximately [removed: $77] [added: $78] billion.

The [added: Company’s] Pharmacy Services [removed: Segment provides a full range of pharmacy benefit management (“PBM”) solutions, as described more fully below, to] clients [removed: consisting] [added: are] primarily [removed: of] employers, insurance companies, unions, government employee groups, health plans, Medicare Part D plans, Managed Medicaid [removed: plans,] plans [added: and plans] offered on [removed: the] public and private [added: health insurance] exchanges, other sponsors of health benefit plans and individuals [added: located] throughout the United States.

In addition, [removed: through our SilverScript Insurance] [added: the] Company [removed: (“SilverScript”) subsidiary, we are] [added: is] a national provider of drug benefits to eligible beneficiaries under the [removed: federal government’s] Medicare Part D [added: prescription drug] program.

[removed: As of December 31, 2017, the] [added: The] Pharmacy Services [removed: Segment operated 23] [added: segment operates] retail specialty pharmacy stores, [removed: 18] specialty mail order [removed: pharmacies and four] [added: pharmacies,] mail order dispensing pharmacies, [added: compounding pharmacies] and [removed: 83] branches for infusion and enteral [removed: services, including approximately 73 ambulatory infusion suites and three centers of excellence, located in 42 states, Puerto Rico and the District of Columbia.][added: nutrition services.]

During the year ended December 31, [removed: 2017, our] [added: 2018, the Company’s] PBM filled or managed approximately [removed: 1.8] [added: 1.9] billion prescriptions on a 30-day equivalent basis.

[removed: Our goal is to produce superior results for our clients and their plan members by leveraging our expertise in core PBM services, including:] [added: The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including] plan design offerings and administration, formulary management, [removed: Medicare Part D] [added: retail pharmacy network management] services, mail [removed: order,] [added: order pharmacy,] specialty pharmacy and infusion services, [removed: retail pharmacy network management] [added: Medicare Part D] services, [removed: prescription management systems,] clinical services, disease management services and medical spend management.

[removed: Plan Design Offerings and Administration - We administer] [added: The Company administers] pharmacy benefit plans for clients who contract with [removed: us] [added: it] to facilitate prescription [added: drug] coverage and claims processing for their eligible plan members.

[removed: We assist our] [added: The Company assists its PBM] clients in designing pharmacy benefit plans that help improve health outcomes while minimizing the costs to the client.

[removed: We] [added: The Company] also [removed: assist] [added: assists PBM] clients in monitoring the effectiveness of their plans through frequent, informal communications, [removed: their] [added: the] use of [removed: our] proprietary software, as well as through formal annual, quarterly and sometimes monthly performance reviews.

[removed: We] [added: The Company makes recommendations to] help [removed: our] [added: PBM] clients [added: design benefit plans that promote the use of lower cost, clinically appropriate drugs and helps its PBM clients] control costs by recommending plan designs that encourage the use of generic equivalents of brand name drugs when such equivalents are available.

[removed: Our clients] [added: Clients] also have the option, through plan design, to further lower their pharmacy benefit plan costs by setting different member payment levels for different products on their drug lists or “formularies,” which helps guide members to choose lower cost alternatives through appropriate financial incentives.

[removed: Formulary Management - We utilize] [added: The Company utilizes] an independent panel of doctors, pharmacists and other medical experts, referred to as [removed: our] [added: the] CVS Caremark National Pharmacy and Therapeutics Committee, to review and approve the selection of drugs that meet [removed: our high] [added: the Company’s] standards of safety and efficacy for inclusion on one of [removed: our] [added: the Company’s] template formularies.

[removed: Our] [added: The Company’s] formularies provide recommended products in numerous drug classes to help ensure member access to clinically appropriate drugs with alternatives within a class under the client’s pharmacy benefit plan, while helping to drive the lowest net cost for [removed: our] clients that select one of [removed: our] [added: the Company’s] formularies.

To help improve clinical outcomes for members and clients, [removed: we conduct] [added: the Company conducts] ongoing, independent reviews of all drugs, including, but not limited to, those appearing on the formularies and generic equivalent products.

Many of [removed: our] [added: the Company’s] clients choose to adopt [removed: one of our] [added: a] template formulary [removed: offerings] [added: offering] as part of their plan design.

Beginning in 2018, clients [removed: will have] [added: had] new capabilities to offer real time benefits information for a member’s specific plan design, provided digitally at the point of prescribing, at the pharmacy and directly to members.

[removed: Medicare Part D Services - We participate] [added: The Company participates] in the administration of the [removed: drug benefit added to the] Medicare [removed: program under] Part D [removed: of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”)] [added: prescription drug program] through the provision of PBM services to those [removed: of our] health plan clients and other clients that have qualified as a [removed: Medicare Part D prescription drug plans (“PDP”)] [added: PDP] or as a Medicare Advantage prescription drug plan [removed: (“MA-PD”)] and by offering Medicare Part D pharmacy benefits through [removed: SilverScript,] [added: its SilverScript subsidiary that is] a PDP that has contracted with the United States Centers for Medicare [removed: and] [added: &] Medicaid Services (“CMS”).

[removed: We] [added: The Company] also [removed: assist] [added: assists] employer, union and other health plan clients that qualify for the retiree drug subsidy made available under [removed: the MMA] [added: Medicare Part D] by collecting and submitting eligibility and/or drug cost data to CMS in order for [removed: them] [added: such clients] to obtain the subsidy and [removed: offer] [added: offers] Medicare Part D pharmacy benefits to such [removed: clients'] [added: clients’] retirees through [removed: SilverScript-sponsored] Employer Group Waiver Plans [removed: (“EGWPs”).][added: (“EGWPs”) sponsored by SilverScript.]

[removed: Mail Order] [added: The] Pharmacy [removed: - As of December 31, 2017, we operated four] [added: Services segment operates] mail order dispensing pharmacies in the United States.

Plan members or their prescribers submit prescriptions or refill requests, primarily for maintenance medications, to these pharmacies via mail, telephone, fax, e-prescribing or the [removed: Internet.][added: Internet, and staff pharmacists review these prescriptions and refill requests with the assistance of the Company’s prescription management systems.]

[removed: These] [added: The Company’s mail order dispensing] pharmacies have been awarded Mail Order Pharmacy accreditation from Utilization Review Accreditation Commission (“URAC”), a [removed: Washington DC-based] health care accrediting organization that establishes quality standards for the health care industry.

[removed: As of December 31, 2017, our specialty pharmacy operations included 18] [added: These] specialty mail order pharmacies [removed: located throughout the United States, including Puerto Rico, that] are used for delivery of advanced medications to individuals with chronic or genetic diseases and disorders.

[removed: These] [added: The Company’s specialty mail order] pharmacies [removed: have] also [added: have] been awarded Specialty Pharmacy accreditation from URAC.

[removed: Retail Pharmacy Network Management - We maintain] [added: The Company maintains] a national network of more than 68,000 retail pharmacies, consisting of approximately 41,000 chain pharmacies (which includes [removed: our] CVS Pharmacy locations) and 27,000 independent pharmacies, in the United States, including Puerto Rico, the District of Columbia, Guam and the [removed: U.S.] [added: United States] Virgin Islands.

When a customer fills a prescription in a retail pharmacy, the pharmacy sends prescription data electronically to [removed: us] [added: the Company] from the point-of-sale.

This data interfaces with [removed: our] [added: the Company’s] proprietary prescription management systems, which verify relevant plan member data and eligibility, while also performing a drug utilization review to help evaluate clinical appropriateness and safety and confirming that the pharmacy will receive payment for the prescription.

[removed: We are also able to build client-specific networks and] managed [added: pharmacy] network solutions to further drive savings for [removed: our] clients.

These include a performance-based pharmacy network with approximately 30,000 stores that [removed: will be] [added: is] anchored by CVS Pharmacy and Walgreens, along with up to 10,000 [removed: community-based, independently owned] [added: independent] pharmacies across the United States.

The [added: performance-based] network is designed to deliver unit cost savings and to improve clinical outcomes [removed: that will] [added: in order to] help to lower overall health [added: care costs for participating payors and their members.]

These systems provide essential features and functionality to allow a plan member to [removed: use] [added: utilize] their prescription drug [removed: benefit.][added: benefits.]

These systems also streamline the process by which prescriptions are processed by staff and network [removed: pharmacists,] [added: pharmacists] by enhancing review of various items through automation, [removed: including, but not limited to,] [added: including] plan eligibility, early refills, duplicate dispensing, appropriateness of dosage, drug interactions or allergies, over-utilization and potential fraud.

[removed: Clinical Services - We offer] [added: The Company offers] multiple clinical programs and services to help clients manage overall pharmacy and health care costs in a clinically appropriate manner.

[removed: Our] [added: These] programs are primarily designed to promote [removed: good] [added: better] health outcomes, and to help target inappropriate [added: medication] utilization and non-adherence to medication, each of which may result in adverse medical events that negatively [removed: impact] [added: affect] member health and client pharmacy and medical spend.

[removed: In this regard, we offer various] [added: These programs include] utilization management (“UM”), medication management, quality assurance, adherence and counseling programs to complement the client’s plan design and clinical strategies.

To help address the opioid epidemic, [removed: we] [added: the Company] introduced an industry-leading UM approach that limits to seven days the supply of opioids dispensed for certain acute prescriptions for patients who are new to therapy; limits the daily dosage of opioids dispensed based on the strength of the opioid; and requires the use of immediate-release formulations of opioids before extended-release opioids are dispensed.

[removed: To support improved adherence, our] [added: The Company’s] Pharmacy Advisor program facilitates pharmacist counseling, both face-to-face and over the telephone, to help participating plan members with certain chronic diseases, such as diabetes and cardiovascular conditions, to identify gaps in care, adhere to their prescribed medications and manage their health conditions.

[removed: We] [added: The Company] also [removed: have] [added: has] digital connectivity that helps to lower drug costs for patients by providing expanded visibility to lower cost alternatives through enhanced analytics and data sharing.

Whether in one of its pharmacies or through its health services and plans, CVS Health is pioneering a bold new approach to total health by making quality care more affordable, accessible, simple and seamless.

CVS Health is community-based and locally focused, engaging consumers with the care they need when and where they need it.

CVS Health also serves an estimated 38 million people through traditional, voluntary and consumer-directed health insurance products and related services, including rapidly expanding Medicare Advantage offerings.

The Company believes its innovative health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

On November 28, 2018 (the “Aetna Acquisition Date”), the Company acquired Aetna Inc. (“Aetna”) for a combination of cash and CVS Health stock (the “Aetna Acquisition”).

The Company acquired Aetna to help improve the consumer health care experience by combining Aetna’s health care benefits products and services with CVS Health’s more than 9,900 retail locations, approximately 1,100 walk-in medical clinics and integrated pharmacy capabilities with the goal of becoming the new, trusted front door to health care.

The transaction valued Aetna at approximately $212 per share or approximately $70 billion.

The Company financed the cash portion of the purchase price through a combination of cash on hand and by issuing approximately $45.0 billion of new debt, including senior notes and term loans.

For additional information, see Note 2 ‘‘Acquisition of Aetna’’ contained in the “Notes to Consolidated Financial Statements” in the Annual Report, which is incorporated by reference herein.

On October 10, 2018, the Company and Aetna entered into a consent decree with the United States Department of Justice (the “DOJ”) that allowed the Company’s proposed acquisition of Aetna to proceed, provided Aetna agreed to sell its individual standalone Medicare Part D prescription drug plans.

As part of the agreement reached with the DOJ, Aetna entered into a purchase agreement with a subsidiary of WellCare Health Plans, Inc. (“WellCare”) for the divestiture of Aetna’s standalone Medicare Part D prescription drug plans effective December 31, 2018.

On November 30, 2018, Aetna completed the sale of its standalone Medicare Part D prescription drug plans.

Aetna’s standalone Medicare Part D prescription drug plans had an aggregate of approximately 2.3 million members as of December 31, 2018.

Aetna will provide administrative services to, and will retain the financial results of, the divested plans through 2019.

As a result of the Aetna Acquisition, the Company added the Health Care Benefits segment, which is the equivalent of the former Aetna Health Care segment.

Certain aspects of Aetna’s operations, including products for which the Company no longer solicits or accepts new customers, such as large case pensions and long-term care insurance products, are included in the Company’s Corporate/Other segment.

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

Business Strategy

The combined company expects to transform the consumer health care experience and build healthier communities through a new innovative health care model that is local, easier to use, less expensive and puts consumers at the center of their care.

The Company believes that improving the consumer’s health care experience will improve consumer engagement with their health which will lead to improved health outcomes and lower total health care costs.

The Company believes there are three imperatives to accomplishing this transformation: be local, make it simple and improve health.

These imperatives also guide the Company’s five key strategies for delivering medical cost savings for its customers: improve common chronic disease management, reduce unnecessary hospital readmissions, improve the efficiency of the sites at which medical members receive care, optimize primary care delivery and improve the Company’s complex chronic disease management capabilities.

Page 1

PBM Services

The Company dispenses prescription drugs directly through its mail order dispensing and specialty mail order pharmacies and through pharmacies in its retail network.

All prescriptions processed by the Company are analyzed, processed and documented by the Company’s proprietary prescription management systems.

Plan Design Offerings and Administration

Formulary Management

Retail Pharmacy Network Management Services

The Company is also able to build client-specific pharmacy networks and

Page 2

Mail Order Pharmacy Services

Specialty Pharmacy and Infusion Services

The Pharmacy Services segment operates specialty mail order pharmacies, retail specialty pharmacy stores and branches for infusion and enteral nutrition services in the United States.

Substantially all of the Company’s mail service specialty mail order pharmacies also have been accredited by the Joint Commission, which is an independent, not-for-profit organization that accredits and certifies health care programs and organizations in the United States.

Medicare Part D Services

Clinical Services

Disease Management Programs

Medical Benefit Management

Page 3

At the forefront of a changing health care landscape, the Company has an unmatched suite of capabilities and the expertise needed to drive innovations that will help shape the future of health care.

We are currently the only integrated pharmacy health care company with the ability to impact consumers, payors, and providers with innovative, channel-agnostic solutions.

We have a deep understanding of their diverse needs through our unique integrated model, and we are bringing them innovative solutions that help increase access to quality care, deliver better health outcomes and lower overall health care costs.

We are delivering break-through products and services, from advising patients on their medications at our CVS Pharmacy® locations, to introducing unique programs to help control costs for our clients at CVS Caremark®, to innovating how care is delivered to our patients with complex conditions through CVS Specialty®, to improving pharmacy care for the senior community through Omnicare®, or by expanding access to high-quality, low-cost care at CVS MinuteClinic®.

We have three reportable segments: Pharmacy Services, Retail/LTC and Corporate.

Proposed Acquisition of Aetna

On December 3, 2017, we entered into a definitive merger agreement to acquire all of the outstanding shares of Aetna Inc. (“Aetna”) for a combination of cash and stock (the “Aetna Acquisition”).

The transaction values Aetna at approximately $207 per share or approximately $69 billion based on the Company’s 5-day volume weighted average price ending December 1, 2017 of $74.21 per share.

The final purchase price will be determined based on the Company’s stock price on the date of closing of the transaction.

The proposed acquisition is currently projected to close in the second half of 2018 and remains subject to approval by CVS Health and Aetna shareholders and customary closing conditions, including the expiration of the waiting period under the federal Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) and approvals of state departments of insurance and U.S. and international regulators.

The Pharmacy Services Segment operates under the CVS Caremark Pharmacy Services, Caremark®, CVS Specialty®, AccordantCareTM, SilverScript®, Wellpartner®, NovoLogix®, Coram®, Navarro® Health Services and ACS Pharmacy names.

Pharmacy Services Business Strategy - Our pharmacy services business strategy centers on providing innovative tools and strategies, as well as quality client service, in order to help improve clinical outcomes for our clients’ plan members while assisting them with better managing pharmacy and overall health care costs.

In addition, as a fully integrated pharmacy services company that helps clients improve quality and lower their pharmacy costs, we offer our clients and their plan members a variety of programs and tools, including plan design offerings, that benefit from our integrated systems and the ability of our almost 36,000 pharmacists, nurses, nurse practitioners and physician assistants to interact personally with the many plan members we serve.

Through our multiple member touch points (retail stores, mail order, infusion, long-term care and specialty pharmacies, retail clinics, digital resources and cost management tools), we seek to engage plan members in behaviors that help lower cost and improve health care outcomes.

Examples of these programs and services include: Maintenance Choice®, a program where eligible client plan members can elect to fill their maintenance prescriptions through delivery to their home or business or at our CVS Pharmacy retail stores for the same price as mail order; Pharmacy Advisor®, a program that facilitates face-to-face and telephone counseling by our pharmacists to help participating plan members with certain chronic diseases, such as diabetes and cardiovascular conditions, to identify gaps in care, adhere to their prescribed medications and manage their health conditions; enhanced disease management programs, such as our TransformCareTM offerings, that are targeted at managing chronic disease states; Specialty Connect®, our specialty pharmacy offering that integrates specialty mail and retail capabilities, providing members with disease-state specific counseling from our experienced specialty pharmacists and the convenience of picking up their prescriptions at their local CVS Pharmacy or having them delivered to their home or office and an ExtraCare® Health Card program that offers discounts to eligible plan members on certain over-the-counter health care products sold in our CVS Pharmacy stores.

In addition, CVS MinuteClinic (“MinuteClinic”) is an important and differentiated part of the enterprise that offers certain capabilities to PBM clients and their members.

For example, we offer plan-sponsored co-pay reductions to encourage use of MinuteClinic, thereby helping to reduce emergency room visits and to lower overall health care costs.

We also partner with our health plan clients sponsoring patient-centered medical homes, biometric screenings for plan members, closing gaps in care, and onsite clinics at client corporate headquarters.

PBM Services - Our PBM solutions are described more fully below.

We make recommendations to help clients design benefit plans that promote the use of the lower cost, clinically appropriate drugs.

We also operate a network of smaller mail order specialty pharmacies described below.

Our staff pharmacists review mail order prescriptions and refill requests with the assistance of our prescription management systems.

Specialty Pharmacy - Our specialty pharmacies support individuals who require complex and expensive drug therapies.

As of December 31, 2017, the Company operated a network of 23 retail specialty pharmacy stores, which operate under the CVS Pharmacy specialty services and Navarro® Health Services names.

These stores average 1,100 square feet in size and sell prescription drugs and a limited assortment of front store items such as alternative medications, homeopathic remedies and vitamins.

Our care management program, AccordantCare, is a differentiated clinical model that focuses on whole patient care, including comorbidity management.

It embeds specially trained nurses into the CVS Specialty CareTeam for members who fill their specialty medications through CVS Specialty helping deliver better care and improved outcomes.

Through our affiliate Coram LLC and its subsidiaries (collectively, “Coram”), one of the nation’s largest providers of comprehensive infusion services, we care for approximately 165,000 patients annually, providing specialty infusion and enteral nutrition services.

Our Specialty Connect® offering integrates our specialty pharmacy mail and retail capabilities, providing members with disease-state specific counseling from our experienced specialty pharmacists and the convenience of picking-up their prescriptions at their local CVS Pharmacy, or having them delivered to their preferred address.

Whether submitted through our specialty mail order pharmacy or at a CVS Pharmacy, all prescriptions are filled through our specialty mail order pharmacies, so all revenue from this specialty prescription services program is recorded within the Pharmacy Services Segment.

Members then can choose to pick up their medication at their local CVS Pharmacy, or have it sent to their home through the mail.

Specialty Connect is available where allowed by law.

Innovative digital tools for specialty pharmacy provide a more accessible, connected, and personal health experience.

Members can manage all their specialty medications in real-time using the CVS Specialty app and more than 60 percent have opted in to receive email and text messages including refill reminders and order status.

Patients can also use secure messaging to contact their Specialty CareTeam with any questions.

Additionally, with the acquisition of Omnicare, Inc. (“Omnicare”), we expanded our specialty pharmacy to include the specialty pharmacy operations of Omnicare which operates under the name ACS Pharmacy.

care costs for participating payors and their members.

This network will be available beginning March 2018 to eligible commercial and Medicaid clients.

Prescription Management Systems - We dispense prescription drugs both directly, through one of our mail order or specialty pharmacies, or through a network of retail pharmacies, described above.

All prescriptions processed through our systems, whether they are filled through one of our mail order or specialty dispensing pharmacies or through a pharmacy in our retail network, are analyzed, processed and documented by our proprietary prescription management systems.

[removed: We refer you to the Note 12 “Commitments and Contingencies”] [added: The information] contained in [added: Note 16 ‘‘Commitments and Contingencies’’ of] the “Notes to [removed: the] Consolidated Financial Statements” [removed: of our] [added: in the] Annual Report [removed: to Stockholders for the year ended December 31, 2017, which section] is incorporated by reference herein.

Item 103 of SEC Regulation S-K requires disclosure of [removed: certain] environmental legal proceedings [added: with a governmental authority] if management reasonably believes that the proceedings involve potential monetary sanctions of $100,000 or more.

The Company is in the process of negotiating with the New York State Department of Environmental Conservation to resolve claims of alleged historical noncompliance with hazardous waste regulations in connection with [removed: long-term care] [added: LTC] pharmacies in the State of New York.

These proceedings are not material to the [removed: Company's] [added: Company’s] business or financial [removed: position.][added: condition.]

[removed: ☒] [added: þ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, [removed: 2017][added: 2018]

[removed: ☐] [added: o] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from [removed: to][added: _________ to_________]

[removed: ][added: ]

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

| One CVS Drive, Woonsocket, Rhode Island [added: (Address of principal executive offices)] | | [added: | | |] 02895 [added: (Zip Code)] | [added: | | | |]

[added: |] (401) 765-1500 [added: | | | | | | | | | |]

[added: |] (Registrant’s telephone number, including area code) [added: | | | | | | | | | |]

[added: |] Securities registered pursuant to Section 12(b) of the [removed: Exchange] Act: [added: | | | | | | | | | |]

| Common Stock, par value $0.01 per share [added: Title of each class] | | [added: | | |] New York Stock Exchange [added: Name of each exchange on which registered] | [added: | | | |]

[added: |] Securities registered pursuant to Section 12(g) of the [removed: Exchange] Act: [added: | | | | | None | | | | |]

[added: |] Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. [added: | | | | | | | | | þ Yes o No |]

[added: |] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. [added: | | | | | | | | | o Yes þ No |]

[added: |] 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 [removed: reports)] [added: reports),] and (2) has been subject to such filing requirements for the past 90 days. [added: | | | | | | | | | þ Yes o No |]

[added: |] Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Website, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [added: (§232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files). [added: | | | | | | | | | þ Yes o No |]

[added: |] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (§229.405 of this chapter)] is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: | | | | | | | | | o |]

[added: |] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting [removed: company,] [added: company] or an emerging growth company. [added: 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 [removed: ☒] [added: þ] | | [added: | | | | | |] Accelerated filer [removed: ☐] [added: o] | [added: |]

| Non-accelerated filer [removed: ☐ (Do not check if a smaller reporting company)] [added: o] | | [added: | | | | | |] Smaller reporting company [removed: ☐] [added: o] | [added: |]

| | | [added: | | | | | |] Emerging growth company [removed: ☐] [added: o] | [added: |]

[added: |] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). [added: | | | | | | | | | o Yes þ No |]

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately [removed: $81,440,458,676] [added: $65,262,991,789] as of June 30, [removed: 2017,] [added: 2018,] based on the closing price of the common stock on the New York Stock Exchange.

As of February [removed: 9, 2018,] [added: 19, 2019,] the registrant had [removed: 1,014,532,157] [added: 1,297,082,165] shares of common stock issued and outstanding.

Portions of [removed: our] [added: the] Annual Report to Stockholders for the fiscal year ended December 31, [removed: 2017] [added: 2018 (the “Annual Report”)] are incorporated by reference in [removed: our] response to Items [added: 1, 1A, 2 and 3 of Part I and Items 5, 6,] 7, [added: 7A,] 8 and [removed: 9] [added: 9A] of Part [removed: II.][added: II, in each case to the extent described therein.]

Information contained in [removed: our Proxy Statement for] the [removed: 2018] [added: definitive proxy statement for CVS Health Corporation’s 2019] Annual Meeting of [removed: Stockholders] [added: Stockholders, to be filed on or about April 5, 2019 (the “Proxy Statement”),] is incorporated by reference in [removed: our] response to Items 10 through 14 of Part [removed: III.][added: III to the extent described therein.]

| [removed: [](#Item1BUnresolvedStaffComments_484249)] [added: Item 1B:] | [Unresolved Staff [removed: Comments](#Item1BUnresolvedStaffComments_484249)] [added: Comments](#sCE12717B247E546FB9F1B84A9E6B1405)] | [removed: 33] [added: [59](#sCE12717B247E546FB9F1B84A9E6B1405)] |

| [removed: [](#Item4MineSafetyDisclosures_191187)] [added: Item 4:] | [Mine Safety [removed: Disclosures](#Item4MineSafetyDisclosures_191187)] [added: Disclosures](#sBEFD8CBE47EF5776AD1BDEC060396094)] | [removed: 36] [added: [60](#sBEFD8CBE47EF5776AD1BDEC060396094)] |

| [removed: [](#Item5MarketforRegistrantsCommonEquityRel)] [added: Item 5:] | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#Item5MarketforRegistrantsCommonEquityRel)] [added: Securities](#s49451D73943A5651AD0C543F0968B94E)] | [removed: 38] [added: [61](#s49451D73943A5651AD0C543F0968B94E)] |

| [removed: [](#Item6SelectedFinancialData_416141)] [added: Item 6:] | [Selected Financial [removed: Data](#Item6SelectedFinancialData_416141)] [added: Data](#s90719DEAC6E35E958574F69AFAF94FFA)] | [removed: 39] [added: [62](#s90719DEAC6E35E958574F69AFAF94FFA)] |

| [removed: [](#Item7ManagementsDiscussionandAnalysisofF)] [added: Item 7:] | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#Item7ManagementsDiscussionandAnalysisofF)] [added: Operations](#s26BE0AF2EC84553D8BF2778776554499)] | [removed: 40] [added: [62](#s26BE0AF2EC84553D8BF2778776554499)] |

| [removed: [](#Item7AQuantitativeandQualitativeDisclosu)] [added: Item 7A:] | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#Item7AQuantitativeandQualitativeDisclosu)] [added: Risk](#sD65FBEF6CD6D58FA87B5A3B4B019C249)] | [removed: 40] [added: [62](#sD65FBEF6CD6D58FA87B5A3B4B019C249)] |

| [removed: [](#Item8FinancialStatementsandSupplementary)] [added: Item 8:] | [Financial Statements and Supplementary [removed: Data](#Item8FinancialStatementsandSupplementary)] [added: Data](#s26C260C330065FE2B1EEE9AC8C57061C)] | [removed: 40] [added: [62](#s26C260C330065FE2B1EEE9AC8C57061C)] |

| [removed: [](#Item9ChangesinandDisagreementswithAccoun)] [added: Item 9:] | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#Item9ChangesinandDisagreementswithAccoun)] [added: Disclosure](#s7DE7FB44ACAC5E528B0EDAE3BA4A4B35)] | [removed: 40] [added: [62](#s7DE7FB44ACAC5E528B0EDAE3BA4A4B35)] |

| [removed: [](#Item9AControlsandProcedures_947228)] [added: Item 9A:] | [Controls and [removed: Procedures](#Item9AControlsandProcedures_947228)] [added: Procedures](#s6C2E53CDB3905D3698801D86B81F9C72)] | [removed: 40] [added: [62](#s6C2E53CDB3905D3698801D86B81F9C72)] |

| [removed: [Part III](#PARTIII_111473)] [added: Part III] | | |

| [removed: [](#Item10DirectorsExecutiveOfficersandCorpo)] [added: Item 10:] | [Directors, Executive Officers and Corporate [removed: Governance](#Item10DirectorsExecutiveOfficersandCorpo)] [added: Governance](#s6731113E273957548EFE99DA4AA41660)] | [removed: 41] [added: [63](#s6731113E273957548EFE99DA4AA41660)] |

| [removed: [](#Item12SecurityOwnershipofCertainBenefici)] [added: Item 12:] | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#Item12SecurityOwnershipofCertainBenefici)] [added: Matters](#s7C432AF6F44F5DCD851B52B4C968B4AE)] | [removed: 41] [added: [64](#s7C432AF6F44F5DCD851B52B4C968B4AE)] |

| [removed: [](#Item13CertainRelationshipsandRelatedTran)] [added: Item 13:] | [Certain Relationships and Related Transactions and Director [removed: Independence](#Item13CertainRelationshipsandRelatedTran)] [added: Independence](#s1086E387592059D3B35C4956D99F9CDF)] | [removed: 41] [added: [65](#s1086E387592059D3B35C4956D99F9CDF)] |

| [removed: [](#Item14PrincipalAccountantFeesandServices)] [added: Item 14:] | [Principal Accountant Fees and [removed: Services](#Item14PrincipalAccountantFeesandServices)] [added: Services](#s2784461A288C5600A1A17C6538214577)] | [removed: 41] [added: [65](#s2784461A288C5600A1A17C6538214577)] |

10-K 1 cvs-2018231x10k.htm FORM 10-K

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| 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. o | | | | | | | | | |

| Item 1: | [Business](#s818286CA50D457899B0F48E82F4F2C61) | [1](#s818286CA50D457899B0F48E82F4F2C61) |

| Item 1A: | [Risk Factors](#s2EBDAD10671A57C7BCC63B8D4926BD71) | [28](#s2EBDAD10671A57C7BCC63B8D4926BD71) |

| Item 2: | [Properties](#s019F552D9BEC54F884952E4BA3558484) | [59](#s019F552D9BEC54F884952E4BA3558484) |

| Item 3: | [Legal Proceedings](#sD010ADD8AE1E5AB9AA9C8F6E9AE598AD) | [60](#sD010ADD8AE1E5AB9AA9C8F6E9AE598AD) |

| Part II | | |

| Item 9B: | [Other Information](#s7F28BC5A63A7568594EA3CF5F0069155) | [63](#s7F28BC5A63A7568594EA3CF5F0069155) |

| Item 11: | [Executive Compensation](#s60D75D6F6A2D59A28E5DF518ABC56E43) | [64](#s60D75D6F6A2D59A28E5DF518ABC56E43) |

| Part IV | | |

| Item 16: | [Form 10-K Summary](#s30baf0aa1a294d94a9139dcb676a88d8) | [70](#s30baf0aa1a294d94a9139dcb676a88d8) |

| | [Signatures](#sED9C9D24545A5438A592CDA3AF364B6C) | [71](#sED9C9D24545A5438A592CDA3AF364B6C) |

| | | |

10-K 1 cvs-20171231x10k.htm 10-K

| Delaware | | 05-0494040 |

| --- | --- | --- |

| (Address of principal executive offices) | | (Zip Code) |

| Title of each class | | Name of each exchange on which registered |

None

Yes ☒ No ☐

Yes ☐ No ☒

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

Filings made by companies with the Securities and Exchange Commission sometimes “incorporate information by reference.” This means that the company is referring you to information that was previously filed or is to be filed with the SEC, and this information is considered to be part of the filing you are reading.

| [Part I](#PARTI_29537) | | |

| [](#Item1Business_580619) | [Business](#Item1Business_580619) | 3 |

| [](#Item1ARiskFactors_343648) | [Risk Factors](#Item1ARiskFactors_343648) | 16 |

| [](#Item2Properties_761207) | [Properties](#Item2Properties_761207) | 33 |

| [](#Item3LegalProceedings_510503) | [Legal Proceedings](#Item3LegalProceedings_510503) | 36 |

| | [Executive Officers of the Registrant](#ExecutiveOfficersoftheRegistrant_69637) | 37 |

| [Part II](#PARTII_653631) | | |

| [](#Item9BOtherInformation_960725) | [Other Information](#Item9BOtherInformation_960725) | 40 |

| [](#Item11ExecutiveCompensation_746510) | [Executive Compensation](#Item11ExecutiveCompensation_746510) | 41 |

| | [Signatures](#SIGNATURES_519127) | 49 |

For additional information on the amount of [removed: our] rental obligations for [removed: our] [added: the Company’s] leases, [removed: we refer you to] [added: see] Note [removed: 7 “Leases”] [added: 6 ‘‘Leases’’ contained] in [removed: our Annual Report] [added: the “Notes] to [removed: Stockholders for] [added: Consolidated Financial Statements” in] the [removed: year ended December 31, 2017,] [added: Annual Report,] which [removed: section] is incorporated by reference herein.

[removed: We lease 1,695] [added: | • | Approximately 1,700] retail pharmacies and [removed: 79] [added: approximately 80] clinics in Target [removed: stores located in 47 states and the District of Columbia.][added: stores; |]

[removed: As of December 31, 2017, we] [added: | • | Six] owned [removed: six and] [added: LTC pharmacies, approximately 150] leased [removed: 139] LTC pharmacies in [removed: 44] [added: 46] states and [removed: owned] one [added: owned] LTC repackaging [removed: facility in Kentucky.][added: facility. |]

[removed: We own our corporate offices] [added: The Company’s principal office is an owned building complex] located in Woonsocket, Rhode Island, which totals approximately one million square feet.

In addition, [removed: we lease] [added: the Company leases] corporate offices in [removed: Scottsdale,] Arizona, [removed: Northbrook,] Illinois, [removed: Cincinnati,] Ohio, [removed: Monroeville,] Pennsylvania, [removed: Irving,] Texas, and [removed: Sao Paulo,] Brazil.

In connection with certain business dispositions completed between 1991 and 1997, [removed: we continue] [added: the Company continues] to guarantee lease obligations for approximately 85 former stores.

[removed: We are] [added: The Company is] indemnified for these guarantee obligations by the respective purchasers.

For additional [removed: information, we refer you to] [added: information on these guarantees, see “Lease Guarantees” in] Note [removed: 12] [added: 16] “Commitments and Contingencies” [added: contained] in [removed: our Annual Report] [added: the “Notes] to [removed: Stockholders for] [added: Consolidated Financial Statements” in] the [removed: year ended December 31, 2017,] [added: Annual Report,] which [removed: section] is incorporated by reference herein.

At the end of the existing lease terms, management believes the leases can be renewed or replaced by [removed: alternative space.]

Pharmacy Services Segment

As of December 31, 2018, the Pharmacy Services segment had the following properties:

| | |

| --- | --- |

| • | An owned mail service dispensing pharmacy located in Texas; |

| | |

| --- | --- |

| • | Leased mail order dispensing pharmacies located in Hawaii, Illinois and Pennsylvania; |

| | |

| --- | --- |

| • | Leased call centers located in California, Missouri, Pennsylvania, Tennessee and Texas; |

| | |

| --- | --- |

| • | Approximately 40 leased on-site pharmacy stores, approximately 25 leased retail specialty pharmacy stores, approximately 20 specialty mail order pharmacies and approximately 90 branches for infusion and enteral services. |

Retail/LTC Segment

As of December 31, 2018, the Retail/LTC segment had the following properties:

| | |

| --- | --- |

| • | Approximately 8,200 retail stores, of which approximately 4% were owned. Net selling space for retail stores was approximately 80.5 million square feet as of December 31, 2018. Approximately 25% of the store base was opened or significantly remodeled within the last five years; |

| | |

| --- | --- |

| | |

| --- | --- |

| • | Nine owned distribution centers located in eight states and 13 leased distribution facilities located in twelve additional states and Brazil. The 22 distribution centers totaled approximately 10.4 million square feet as of December 31, 2018; and |

| | |

| --- | --- |

Health Care Benefits Segment

The Health Care Benefits segment’s principal office is an owned building complex that is approximately 1.7 million square feet in size and is located in Hartford, Connecticut.

The Health Care Benefits segment also owns or leases other space in the greater Hartford area, Maryland, Pennsylvania, and various field locations in the United States and several other countries.

Page 59

alternative space.

We lease most of our stores under long-term leases that vary as to rental amounts, expiration dates, renewal options and other rental provisions.

As of December 31, 2017, we owned approximately 4% of our 8,108 retail stores.

Net selling space for our retail stores was approximately 79.5 million square feet as of December 31, 2017.

Approximately 20% of our store base was opened or significantly remodeled within the last five years.

We own nine distribution centers located in Alabama, California, Hawaii, New York, Rhode Island, South Carolina, Tennessee and Texas and lease 13 additional distribution facilities located in Arizona, Florida, Indiana, Michigan, Missouri, New Jersey, Pennsylvania, Texas, Virginia and Brazil.

The 22 distribution centers total approximately 10.4 million square feet as of December 31, 2017.

As of December 31, 2017, we owned one mail service dispensing pharmacy located in Texas and leased three additional mail order dispensing pharmacies located in Hawaii, Illinois and Pennsylvania; we leased call centers located in California, Missouri, Pennsylvania, Tennessee and Texas; we leased 37 onsite pharmacy stores and 23 specialty pharmacy stores, and leased 18 specialty mail order pharmacies; we leased 83 branches for infusion and enteral services, including approximately 73 ambulatory infusion suites and three centers of excellence.

The following is a breakdown by state, District of Columbia, Puerto Rico and Brazil of our retail stores, pharmacies and clinics in Target stores, LTC hub and spoke pharmacies, onsite pharmacy stores, specialty pharmacy stores, specialty mail order pharmacies, mail order dispensing pharmacies and branches and centers of excellence for infusion and enteral services as of December 31, 2017:

| | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | Infusion & | | |

| | | | | Pharmacies | | LTC Hub & | | Onsite | | Specialty | | Specialty | | Mail Order | | Enteral | | |

| | | Retail | | within | | Spoke | | Pharmacy | | Pharmacy | | Mail Order | | Dispensing | | Services | | |

| | | Stores (1) | | Target (1) | | Pharmacies | | Stores | | Stores | | Pharmacies | | Pharmacies | | Locations | | Total |

| United States: | | | | | | | | | | | | | | | | | | |

| Alabama | | 160 | | 22 | | 2 | | 1 | | 1 | | — | | — | | 1 | | 187 |

| Alaska | | 3 | | 3 | | — | | — | | — | | — | | — | | — | | 6 |

| Arizona | | 152 | | 46 | | 2 | | — | | 1 | | 1 | | — | | 2 | | 204 |

| Arkansas | | 15 | | 8 | | 1 | | — | | — | | — | | — | | 1 | | 25 |

| California | | 886 | | 260 | | 8 | | — | | 3 | | 1 | | — | | 8 | | 1,166 |

| Colorado | | 3 | | 39 | | 3 | | — | | 1 | | — | | — | | 1 | | 47 |

| Connecticut | | 154 | | 20 | | 1 | | 1 | | — | | — | | — | | 1 | | 177 |

| Delaware | | 17 | | 3 | | — | | — | | — | | — | | — | | — | | 20 |

| District of Columbia | | 58 | | 1 | | — | | — | | 1 | | — | | — | | — | | 60 |

| Florida | | 754 | | 121 | | 5 | | 1 | | 1 | | 2 | | — | | 7 | | 891 |

| Georgia | | 311 | | 41 | | 1 | | 3 | | 1 | | — | | — | | 1 | | 358 |

| Hawaii | | 64 | | 7 | | — | | — | | 1 | | — | | 1 | | — | | 73 |

| Idaho | | — | | 2 | | 1 | | — | | — | | — | | — | | 1 | | 4 |

| Illinois | | 282 | | 90 | | 7 | | 2 | | — | | 1 | | 1 | | 3 | | 386 |

| Indiana | | 309 | | 30 | | 4 | | — | | — | | — | | — | | 3 | | 346 |

| Iowa | | 20 | | 18 | | 2 | | — | | — | | — | | — | | 1 | | 41 |

| Kansas | | 39 | | 14 | | 2 | | — | | — | | 1 | | — | | 2 | | 58 |

| Kentucky | | 70 | | 9 | | 9 | | — | | — | | 1 | | — | | — | | 89 |

| Louisiana | | 119 | | 14 | | 3 | | — | | — | | — | | — | | 1 | | 137 |

| Maine | | 22 | | 5 | | 1 | | — | | — | | — | | — | | 1 | | 29 |

| Maryland | | 185 | | 39 | | 2 | | 5 | | — | | — | | — | | 1 | | 232 |

| Massachusetts | | 376 | | 40 | | 5 | | 2 | | 2 | | 1 | | — | | 1 | | 427 |

| Michigan | | 248 | | 50 | | 4 | | 1 | | — | | 1 | | — | | 2 | | 306 |

| Minnesota | | 61 | | 75 | | 6 | | 1 | | — | | — | | — | | 2 | | 145 |

| Mississippi | | 52 | | 5 | | 1 | | 1 | | — | | — | | — | | 1 | | 60 |

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Executive Officers of the Registrant

The following sets forth the name, age and biographical information for each of our executive officers as of February 14, 2018.

In each case the officer’s term of office extends to the date of the board of directors meeting following the next annual meeting of stockholders of the Company.

Previous positions and responsibilities held by each of the executive officers over the past five years are indicated below:

Lisa G.

Bisaccia, age 61, Executive Vice President of CVS Health Corporation since March 2016 and Chief Human Resources Officer of CVS Health Corporation since January 2010; Senior Vice President of CVS Health Corporation from January 2010 through February 2016; Vice President, Human Resources of CVS Pharmacy, Inc. from September 2004 through December 2009.

Ms. Bisaccia is also a member of the Board of Directors of Aramark, a leading global provider of food, facilities and uniform services.

Eva C.

Boratto, age 51, Executive Vice President - Controller and Chief Accounting Officer of CVS Health Corporation since March 2017; Senior Vice President - Controller and Chief Accounting Officer of CVS Health Corporation from July 2013 through February 2017; Senior Vice President of PBM Finance from July 2010 through June 2013; Vice President, U.S. Market Finance Leader of Merck & Co., Inc. from June 2009 through June 2010.

Troyen A.

Brennan, M.D., age 63, Executive Vice President and Chief Medical Officer of CVS Health Corporation since November 2008; Executive Vice President and Chief Medical Officer of Aetna, Inc. from February 2006 through November 2008.

David M.

Denton, age 52, Executive Vice President and Chief Financial Officer of CVS Health Corporation since January 2010; Senior Vice President and Controller and Chief Accounting Officer of CVS Health Corporation from March 2008 until December 2009; Senior Vice President, Financial Administration of CVS Health Corporation and CVS Pharmacy, Inc. from April 2007 to March 2008.

Mr. Denton is also a member of the Board of Directors of Tapestry, Inc. (formerly known as Coach, Inc.), a leading retailer of premium bags and luxury accessories.

Larry J.

Merlo, age 62, President and Chief Executive Officer of CVS Health Corporation since March 2011; President and Chief Operating Officer of CVS Health Corporation from May 2010 through March 2011; President of CVS Pharmacy from January 2007 through August 2011; Executive Vice President of CVS Health Corporation from January 2007 through May 2010; also a director of CVS Health Corporation since May 2010.

Thomas M.

Moriarty, age 54, Executive Vice President and General Counsel of CVS Health Corporation since October 2012 and Chief Policy and External Affairs Officer since March 2017; Chief Strategy Officer from March 2014 through February 2017; General Counsel of Celgene Corporation, a global biopharmaceutical company, from May 2012 through September 2012; General Counsel and Corporate Secretary of Medco Health Solutions, Inc. (“Medco”), a pharmacy benefit management company, from March 2008 through April 2012; also President of Global Pharmaceutical Strategies of Medco from March 2011 through April 2012.

Jonathan C.

Roberts, age 62, Executive Vice President and Chief Operating Officer of CVS Health Corporation since March 2017; Executive Vice President of CVS Health Corporation and President of CVS Caremark from September 2012 through February 2017; Executive Vice President of CVS Health Corporation and Chief Operating Officer of CVS Caremark from October 2010 through August 2011; Executive Vice President, Rx Purchasing, Pricing and Network Relations of CVS Health Corporation from January 2009 through October 2010.

Future [removed: dividend payments] [added: dividends] will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the [removed: Company’s Board of Directors.][added: Board.]

The following share repurchase programs were authorized by the [removed: Company’s Board of Directors:][added: Board:]

| In billions | | | | | Remaining as of | | [added: |]

| Authorization Date | [removed: |] Authorized | | | [added: |] December 31, [removed: 2017] [added: 2018] | | [added: |]

| November 2, 2016 (“2016 Repurchase Program”) | [removed: |] $ | 15.0 | | [added: |] $ | 13.9 | [added: |]

| December 15, 2014 (“2014 Repurchase Program”) | [removed: | |] 10.0 | | | [added: |] — | [added: | |]

The share Repurchase Programs, each of which was effective immediately, permit the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions, accelerated share repurchase [removed: (“ASR”)] transactions, and/or other derivative transactions.

The 2016 Repurchase Program can be modified or terminated by the Board [removed: of Directors] at any time.

Market information

The Company’s common stock is listed on the New York Stock Exchange under the symbol “CVS.”

Holders of common stock

The information under the heading “Holders of Common Stock” in the Annual Report is incorporated by reference herein.

Dividends

The quarterly cash dividend declared by the Company’s Board of Directors (the “Board”) was $0.50 per share in 2018 and 2017.

Issuer purchases of equity securities

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| | | | | | | | |

| | | | | | | | |

During the three months ended December 31, 2018 the Company did not repurchase any shares of common stock.

See Note 12 ‘‘Shareholders’ Equity’’ of the “Notes to Consolidated Financial Statements” in the Annual Report, which is incorporated by reference herein, for additional information regarding the Company’s share repurchases.

Page 61

Our common stock is listed on the New York Stock Exchange under the symbol “CVS.” The table below sets forth the high and low closing prices of our common stock on the New York Stock Exchange Composite Tape and the quarterly cash dividends declared per share of common stock during the periods indicated.

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Year | |

| 2017 High | | $ | 83.92 | | $ | 82.79 | | $ | 83.31 | | $ | 80.91 | | $ | 83.92 |

| Low | | $ | 74.80 | | $ | 75.95 | | $ | 75.35 | | $ | 66.80 | | $ | 66.80 |

| Cash dividends per common share | | $ | 0.50 | | $ | 0.50 | | $ | 0.50 | | $ | 0.50 | | $ | 2.00 |

| 2016 High | | $ | 104.05 | | $ | 106.10 | | $ | 98.06 | | $ | 88.80 | | $ | 106.10 |

| Low | | $ | 89.65 | | $ | 93.21 | | $ | 88.99 | | $ | 73.53 | | $ | 73.53 |

| Cash dividends per common share | | $ | 0.425 | | $ | 0.425 | | $ | 0.425 | | $ | 0.425 | | $ | 1.70 |

As of February 9, 2018, there were 21,453 registered shareholders according to the records maintained by our transfer agent.

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| December 17, 2013 (“2013 Repurchase Program”) | | | 6.0 | | | — |

Pursuant to the authorization under the 2014 Repurchase Program, in August 2016, the Company entered into two fixed dollar ASRs with Barclays Bank PLC (“Barclays”) for a total of $3.6 billion.

Upon payment of the $3.6 billion purchase price in January 2017, the Company received a number of shares of its common stock equal to 80% of the $3.6 billion notional amount of the ASRs or approximately 36.1 million shares, which were placed into treasury stock in January 2017.

The ASRs were accounted for as an initial treasury stock transaction for $2.9 billion and a forward contract for $0.7 billion.

In April 2017, the Company received 9.9 million shares of common stock, representing the remaining 20% of the $3.6 billion notional amount of the ASRs, thereby concluding the ASRs.

The remaining 9.9 million shares of common stock delivered to the Company by Barclays were placed into treasury stock and the forward contract was reclassified from capital surplus to treasury stock in April 2017.

In the ASR transactions described above, the initial repurchase of the shares and delivery of the remainder of the shares to conclude the ASR, 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.

During the year ended December 31, 2017, the Company repurchased an aggregate of 55.4 million shares of common stock for approximately $4.4 billion under the 2014 and 2016 Repurchase Programs.

As of December 31, 2017, there remained an aggregate of approximately $13.9 billion available for future repurchases under the 2016 Repurchase Program and the 2014 Repurchase Program was complete.

During the fourth quarter of 2017, the Company suspended share repurchase activity in connection with the Aetna Acquisition.

| | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | Approximate Dollar | |

| | | | | | | | Total Number of Shares | | Value of Shares that | |

| | | Total Number | | Average | | | Purchased as Part of | | May Yet Be | |

| | | of Shares | | Price Paid per | | | Publicly Announced | | Purchased Under the | |

| Fiscal Period | | Purchased | | Share | | | Plans or Programs | | Plans or Programs | |

| October 1, 2017 through October 31, 2017 | | — | | $ | — | | — | | $ | 13,869,392,446 |

| November 1, 2017 through November 30, 2017 | | — | | $ | — | | — | | $ | 13,869,392,446 |

| December 1, 2017 through December 31, 2017 | | — | | $ | — | | — | | $ | 13,869,392,446 |

| | | — | | | | | — | | | |

The selected consolidated financial data of CVS Health Corporation as of and for the periods indicated in the five-year period ended December 31, [removed: 2017,] [added: 2018,] have been derived from the consolidated financial statements of CVS Health [removed: Corporation.][added: Corporation and is incorporated herein by reference to the information contained in the Annual Report under the heading “Five-Year Financial Summary.” The selected consolidated financial data should be read in conjunction with the consolidated financial statements and the audit reports of Ernst & Young LLP, which are incorporated by reference elsewhere in this Annual Report on Form 10-K.]

The selected consolidated financial data should be read in conjunction with the consolidated financial statements and the audit reports of Ernst & Young LLP, which are incorporated elsewhere herein.

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| In millions, except per share amounts | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |

| Statement of operations data: | | | | | | | | | | | | | | | |

| Net revenues | | $ | 184,765 | | $ | 177,526 | | $ | 153,290 | | $ | 139,367 | | $ | 126,761 |

| Gross profit | | | 28,545 | | | 28,857 | | | 26,528 | | | 25,367 | | | 23,783 |

| Operating expenses (1) | | | 19,028 | | | 18,491 | | | 17,053 | | | 16,545 | | | 15,713 |

| Operating profit | | | 9,517 | | | 10,366 | | | 9,475 | | | 8,822 | | | 8,070 |

| Interest expense, net | | | 1,041 | | | 1,058 | | | 838 | | | 600 | | | 509 |

| Loss on early extinguishment of debt | | | — | | | 643 | | | — | | | 521 | | | — |

| Other expense (1) | | | 208 | | | 28 | | | 21 | | | 23 | | | 33 |

| Income tax provision | | | 1,637 | | | 3,317 | | | 3,386 | | | 3,033 | | | 2,928 |

| Income from continuing operations | | | 6,631 | | | 5,320 | | | 5,230 | | | 4,645 | | | 4,600 |

| Income (loss) from discontinued operations, net of tax | | | (8) | | | (1) | | | 9 | | | (1) | | | (8) |

| Net income | | | 6,623 | | | 5,319 | | | 5,239 | | | 4,644 | | | 4,592 |

| Net income attributable to noncontrolling interest | | | (1) | | | (2) | | | (2) | | | — | | | — |

| Net income attributable to CVS Health | | $ | 6,622 | | $ | 5,317 | | $ | 5,237 | | $ | 4,644 | | $ | 4,592 |

| Per common share data: | | | | | | | | | | | | | | | |

| Basic earnings per common share: | | | | | | | | | | | | | | | |

| Income from continuing operations attributable to CVS Health | | $ | 6.48 | | $ | 4.93 | | $ | 4.65 | | $ | 3.98 | | $ | 3.78 |

| Income (loss) from discontinued operations attributable to CVS Health | | $ | (0.01) | | $ | — | | $ | 0.01 | | $ | — | | $ | (0.01) |

| Net income attributable to CVS Health | | $ | 6.47 | | $ | 4.93 | | $ | 4.66 | | $ | 3.98 | | $ | 3.77 |

| Diluted earnings per common share: | | | | | | | | | | | | | | | |

| Income from continuing operations attributable to CVS Health | | $ | 6.45 | | $ | 4.91 | | $ | 4.62 | | $ | 3.96 | | $ | 3.75 |

| Net income attributable to CVS Health | | $ | 6.44 | | $ | 4.90 | | $ | 4.63 | | $ | 3.96 | | $ | 3.74 |

| Cash dividends per common share | | $ | 2.00 | | $ | 1.70 | | $ | 1.40 | | $ | 1.10 | | $ | 0.90 |

| Balance sheet and other data: | | | | | | | | | | | | | | | |

| Total assets | | $ | 95,131 | | $ | 94,462 | | $ | 92,437 | | $ | 73,202 | | $ | 70,550 |

| Long-term debt | | $ | 22,181 | | $ | 25,615 | | $ | 26,267 | | $ | 11,630 | | $ | 12,767 |

| Total shareholders’ equity | | $ | 37,695 | | $ | 36,834 | | $ | 37,203 | | $ | 37,963 | | $ | 37,938 |

| Number of stores (at end of year) | | | 9,846 | | | 9,750 | | | 9,681 | | | 7,866 | | | 7,702 |

| | (1) | | As of January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which resulted in a retrospective reclassification of $28 million, $21 million, $23 million and $33 million of net benefit costs from operating expenses to other expense in the years ended December 31, 2016, 2015, 2014, and 2013, respectively. |

| --- | --- | --- | --- |

[removed: We refer you to the] [added: The information contained in] “Consolidated Statements of [removed: Income,”] [added: Operations,”] “Consolidated Statements of Comprehensive [removed: Income,”] [added: Income (Loss),”] “Consolidated Balance Sheets,” “Consolidated Statements of Shareholders’ Equity,” “Consolidated Statements of Cash Flows,” “Notes to Consolidated Financial Statements,” and “Report of Independent Registered Public Accounting Firm” [removed: of our Annual Report to Stockholders for] [added: in] the [removed: year ended December 31, 2017, which sections are] [added: Annual Report, is] incorporated by reference herein.

[removed: 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 Rules 13a-15 (f) and 15d-15(f) under the Securities Exchange Act of 1934) as of December 31, [removed: 2017,] [added: 2018,] have concluded that as of such date the Company’s disclosure controls and procedures were adequate and effective at a reasonable assurance level and designed to ensure that material information relating to the Company and its [added: consolidated] subsidiaries would be made known to such officers on a timely basis.

[removed: Internal control over financial reporting: We refer you to “Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” of our Annual Report to Stockholders for the fiscal year ended December 31, 2017, which are incorporated by reference herein, for] [added: These sections contain] management’s report on the Company’s internal control over financial reporting and the Independent Registered Public Accounting Firm’s report with respect to the effectiveness [removed: of] [added: the Company’s] internal control over financial reporting.

[removed: Changes in internal control over financial reporting: There have] [added: Other than the foregoing, there has] been no [removed: changes] [added: change] in [removed: our] [added: the Company’s] internal [removed: controls] [added: control] over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that occurred during the fourth quarter ended December 31, [removed: 2017] [added: 2018] that [removed: have] [added: has] materially affected, or [removed: are] [added: is] reasonably likely to materially affect, [removed: our] [added: the Company’s] internal control over financial reporting.

Evaluation of disclosure controls and procedures

Internal control over financial reporting

The “Management’s Report on Internal Control Over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” sections of the Annual Report are incorporated by reference herein.

Changes in internal control over financial reporting

On November 28, 2018, the Company completed its acquisition of Aetna.

In conducting its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018, management has elected to exclude Aetna from that assessment, as permitted under SEC rules.

The Company is in the process of integrating the historical internal control over financial reporting of Aetna with the rest of the Company.

Aetna’s operations are included in the Company’s 2018 consolidated financial statements for the period from November 28, 2018 to December 31, 2018 and represented 21% of the Company’s consolidated total assets as of December 31, 2018 and 3% of the Company’s consolidated total revenues for the year ended December 31, 2018.

Page 62

No events have occurred during the fourth quarter [added: ended December 31, 2018] that would require disclosure under this item.

[removed: We refer you to our] [added: The sections of the] Proxy Statement [removed: for the 2018 Annual Meeting of Stockholders] under the captions “Committees of the Board,” “Code of Conduct,” [removed: “Director Nominations,”] “Audit Committee Report,” “Biographies of our [added: Incumbent] Board Nominees,” and “Section 16(a) Beneficial Ownership Reporting [removed: Compliance,” which sections] [added: Compliance”] are incorporated by reference herein.

Executive Officers of the Registrant

The following sets forth the name, age and biographical information for each of the Registrant’s executive officers as of February 28, 2019.

In each case the officer’s term of office extends to the date of the board of directors meeting following the next annual meeting of stockholders of the Company.

Previous positions and responsibilities held by each of the executive officers over the past five years or more are indicated below:

Lisa G.

Bisaccia, age 62, Executive Vice President of CVS Health Corporation since March 2016 and Chief Human Resources Officer of CVS Health Corporation since January 2010; Senior Vice President of CVS Health Corporation from January 2010 through February 2016; Vice President, Human Resources of CVS Pharmacy, Inc. from September 2004 through December 2009.

Ms. Bisaccia is also a member of the board of directors of Aramark, a leading global provider of food, facilities and uniform services.

Eva C.

Boratto, age 52, Executive Vice President and Chief Financial Officer of CVS Health Corporation since November 2018; Executive Vice President - Controller and Chief Accounting Officer of CVS Health Corporation from March 2017 through November 2018; Senior Vice President - Controller and Chief Accounting Officer of CVS Health Corporation from July 2013 through February 2017; Senior Vice President of PBM Finance from July 2010 through June 2013.

Troyen A.

Brennan, M.D., age 64, Executive Vice President and Chief Medical Officer of CVS Health Corporation since November 2008; Executive Vice President and Chief Medical Officer of Aetna Inc. from February 2006 through November 2008.

James D.

Clark, age 54, Senior Vice President - Controller and Chief Accounting Officer of CVS Health Corporation since November 2018; Vice President - Finance and Accounting of CVS Pharmacy, Inc. from September 2009 through October 2018.

Joshua M.

Flum, age 49, Executive Vice President, Enterprise Strategy and Digital since November 2018; Executive Vice President, Corporate Strategy and Business Development of CVS Pharmacy, Inc. from June 2016 through October 2018; Executive Vice President - Pharmacy Services of CVS Pharmacy, Inc. from March 2015 through May 2016; Senior Vice President of Retail Pharmacy of CVS Pharmacy, Inc. from December 2010 through February 2015.

Mr. Flum is a member of the board of directors of CreditRiskMonitor.com, Inc., a company that facilitates the analysis of corporate financial risk, mostly in the context of the extension of trade credit from one business to another.

Kevin P.

Hourican, age 45, Executive Vice President of CVS Health Corporation and President of CVS Pharmacy since April 2018; Executive Vice President - Retail Pharmacy and Supply Chain of CVS Pharmacy, Inc. from June 2016 through March 2018; Senior Vice President, Field Operations and Supply Chain of CVS Pharmacy, Inc. from June 2014 through May 2016; Senior Vice President, Field Operations of CVS Pharmacy, Inc. from June 2012 through May 2014.

Alan M.

Lotvin, M.D., age 57, Executive Vice President - Transformation of CVS Health Corporation since June 2018; Executive Vice President - Specialty Pharmacy, CVS Caremark from November 2012 through May 2018.

Page 63

Karen S.

Lynch, age 56, Executive Vice President of CVS Health Corporation and President of Aetna since November 2018; President of Aetna from January 2015 to the present; Executive Vice President, Local and Regional Businesses of Aetna from February 2013 through December 2014; Executive Vice President, Head of Specialty Products of Aetna from July 2012 through January 2013.

Ms. Lynch is a member of the board of directors of U.S. Bancorp, a banking and financial services company.

Larry J.

Merlo, age 63, President and Chief Executive Officer of CVS Health Corporation since March 2011; President and Chief Operating Officer of CVS Health Corporation from May 2010 through March 2011; President of CVS Pharmacy from January 2007 through August 2011; Executive Vice President of CVS Health Corporation from January 2007 through May 2010; also a director of CVS Health Corporation since May 2010.

Thomas M.

Moriarty, age 55, Executive Vice President and General Counsel of CVS Health Corporation since October 2012 and Chief Policy and External Affairs Officer since March 2017; Chief Strategy Officer from March 2014 through February 2017.

Derica W.

Rice, age 54, Executive Vice President of CVS Health Corporation and President of CVS Caremark since March 2018; Executive Vice President of Global Services and Chief Financial Officer of Eli Lilly & Co. from May 2006 through December 2017.

Mr. Rice was formerly a director of Target Corporation from September 2007 until January 2018, and is a candidate for election to the board of directors of The Walt Disney Company in March 2019.

Jonathan C.

Roberts, age 63, Executive Vice President and Chief Operating Officer of CVS Health Corporation since March 2017; Executive Vice President of CVS Health Corporation and President of CVS Caremark from September 2012 through February 2017; Executive Vice President of CVS Health Corporation and Chief Operating Officer of CVS Caremark from October 2010 through August 2011.

Biographical information on our executive officers is contained in Part I of this Annual Report on Form 10-K.

[removed: We refer you to our] [added: The sections of the] Proxy Statement [removed: for the 2018 Annual Meeting of Stockholders] under the captions [added: “Non-Employee Director Compensation” and] “Executive Compensation and Related Matters,” including “Compensation Discussion [removed: & Analysis”] and [removed: “Management] [added: Analysis,” “Letter from the Management] Planning and Development [added: Committee,” “Compensation] Committee [removed: Report,” which sections] [added: Report” and “Executive Compensation Tables”] are incorporated by reference herein.

[removed: We refer you to our] [added: The sections of the] Proxy Statement [removed: for the 2018 Annual Meeting of Stockholders] under the captions “Share Ownership of Directors and Certain Executive [removed: Officers,”] [added: Officers”] and “Share Ownership of Principal Stockholders” [removed: which sections] are incorporated by reference [removed: herein, for information concerning security ownership of certain beneficial owners and management and related stockholder matters.][added: herein.]

The following table summarizes information about the Company’s common stock that may be issued upon the exercise of options, warrants and rights under all of [removed: our] equity compensation plans as of December 31, [removed: 2017.][added: 2018.]

| | [removed: |] Number of | | | | | [added: | |] Number of securities | [added: |]

| | [removed: |] securities to be | | [added: |] Weighted | | | [added: |] remaining available for | [added: |]

| | [removed: |] issued upon | | [added: |] average exercise | | | [added: |] future issuance under | [added: |]

| | [removed: |] exercise of | | [added: |] price of | | | [added: |] equity compensation | [added: |]

| | [removed: |] outstanding | | [added: |] outstanding | | | [added: |] plans (excluding | [added: |]

| | [removed: |] options, warrants | | [added: |] options, warrants | | | [added: |] securities reflected in | [added: |]

| | [removed: |] and [removed: rights(1)] [added: rights (1)(2)] | | [added: |] and rights | | | [added: |] first column) (1) | [added: |]

| Equity compensation plans approved by stockholders [added: (3)] | [added: 27,102] | [removed: 32,219] | | $ | [removed: 75.32] [added: 77.51] | | [removed: 20,530] | [added: 25,927 | |]

| Equity compensation plans not approved by stockholders [added: (4)(5)] | [added: 5,136] | [removed: —] | | [added: 43.01] | [removed: —] | | [removed: —] | [added: 31,633 | |]

| [removed: |] (1) | [removed: |] Shares in thousands. |

Those sections contain information concerning security ownership of certain beneficial owners and management and related stockholder matters.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| | | | | | | | | | |

| | (a) | | | (b) | | | | (c) | |

| Total | 32,238 | | | $ | 75.04 | | | 57,560 | |

| | | | | | | | | | |

_____________________________________________

| | |

| --- | --- |

| | |

| --- | --- |

| (2) | Consists of: (i) 18,597 shares of common stock underlying outstanding options, (ii) 1,435 shares of common stock issuable upon the exercise of outstanding stock appreciation rights (“SARs”) and (iii) 12,206 shares of common stock issuable on the vesting of outstanding restricted stock units, deferred stock units and performance stock units, assuming target level performance in the case of performance stock units. The number of shares included with respect to |

Page 64

outstanding SARs is the number of shares of the Company’s common stock that would have been issued had the SARs been exercised based on the closing price per share of the Company’s common stock on December 31, 2018, as reported on the NYSE, which was $65.52.

| | |

| --- | --- |

| (3) | Consists of the CVS Health 2017 Incentive Compensation Plan. |

| | |

| --- | --- |

| (4) | Consists of the Amended Aetna Inc. 2010 Stock Incentive Plan (the “Aetna Stock Plan”). |

| | |

| --- | --- |

| (5) | Amount in column (c) consists of the maximum number of shares of the Company’s common stock available for future issuance under the Aetna Stock Plan as of December 31, 2018. |

The Aetna Stock Plan was last approved by Aetna’s shareholders at Aetna’s 2017 Annual Meeting on May 19, 2017.

The Company elected to continue to grant awards under the Aetna Stock Plan to employees of Aetna and its subsidiaries following the completion of the Aetna Acquisition.

The Aetna Stock Plan is designed to promote the Company’s interests and those of its stockholders and to further align the interests of stockholders and employees by tying awards to total return to stockholders, enabling plan participants to acquire additional equity interests in the Company and providing compensation opportunities dependent upon the Company’s performance.

The Aetna Stock Plan has not been submitted to the Company’s stockholders and will expire on May 21, 2020.

Under the Aetna Stock Plan, eligible participants can be granted stock options to purchase shares of the Company’s common stock, SARs, time vesting and/or performance vesting incentive stock or incentive units and other stock based awards.

As of December 31, 2018, the maximum number of shares of the Company’s common stock that may be issued under the awards outstanding under the Aetna Stock Plan was 5.1 million shares, subject to adjustment for corporate transactions and 31.6 million shares remained available for future awards.

If an award under the Aetna Stock Plan is paid solely in cash, no shares are deducted from the number of shares available for issuance under the Aetna Stock Plan.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Total | | 32,219 | | $ | 75.32 | | 20,530 |

| --- | --- | --- | --- |

[removed: We refer you to our] [added: The sections of the] Proxy Statement [removed: for the 2018 Annual Meeting of Stockholders] under the [removed: caption] [added: captions] “Independence Determinations for Directors” and [removed: “Certain Transactions with Directors and Officers,” which sections] [added: “Related Person Transaction Policy”] are incorporated by reference herein.

[removed: We refer you to our] [added: The section of the] Proxy Statement [removed: for the 2018 Annual Meeting of Stockholders] under the caption “Item 2: Ratification of Appointment of Independent Registered Public Accounting [removed: Firm,” which section] [added: Firm”] is incorporated by reference herein.

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[removed: Documents] [added: The following documents are] filed as part of this [removed: report:][added: Annual Report on Form 10-K:]

[added: | Notes to Consolidated] Financial [removed: Statements:][added: Statements |]

[added: | 1. | Financial Statements.] The following financial [removed: statements] [added: statements, related notes and report] are incorporated by reference from [removed: our] [added: the] Annual Report [removed: to Stockholders for the fiscal year ended December 31, 2017, as provided] in Item 8 hereof: [added: |]

| Consolidated Statements of [added: Comprehensive] Income [added: (Loss)] for the Years Ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015 |] [added: 2016] |

| Consolidated Statements of [removed: Comprehensive Income] [added: Operations] for the Years Ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015 |] [added: 2016] |

| Consolidated Balance Sheets as of December 31, [removed: 2017] [added: 2018] and [removed: 2016 |] [added: 2017] |

| Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015 |] [added: 2016] |

| Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015 |] [added: 2016] |

| Report of Independent Registered Public Accounting Firm | [removed: |]

[added: | 2. | Financial Statement Schedules.] All financial statement schedules are omitted because they are not applicable, not required under the instructions, or the information is included in the consolidated financial statements or related notes. [added: |]

[removed: Exhibits][added: INDEX TO EXHIBITS]

| Exhibit | | Description | [removed: | |]

| [removed: 2.1*] [added: 2.2] | | [Agreement and Plan of [removed: Merger] [added: Merger,] dated as of [removed: November 1, 2006 among, the Registrant, Caremark Rx, Inc. and Twain MergerSub] [added: December 3, 2017, among CVS Health Corporation, Hudson Merger Sub] Corp. [added: and Aetna Inc.] (incorporated by reference to Exhibit 2.1 to the Registrant’s [removed: Registration Statement No. 333-139470] [added: Current Report] on Form [removed: S-4] [added: 8-K] filed December [removed: 19, 2006).](http://www.sec.gov/Archives/edgar/data/64803/000095010306002824/dp04245_s4.htm) | |] [added: 5, 2017; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517361800/d444237dex21.htm)] |

| [removed: 2.2*] [added: 2.1] | | [removed: [Amendment No. 1 dated as of January 16, 2007 to the Agreement] [added: [Agreement] and Plan of [removed: Merger] [added: Merger,] dated as of [removed: November 1, 2006] [added: May 20, 2015,] among [removed: the Registrant, Caremark Rx,] [added: CVS Pharmacy, Inc., Tree Merger Sub,] Inc. and [removed: Twain Merger Sub Corp.] [added: Omnicare, Inc.] (incorporated by reference to Exhibit [removed: 2.2] [added: 2.1] to the Registrant’s [removed: Registration Statement No. 333-139470] [added: Current Report] on Form [removed: S-4/A] [added: 8-K] filed [removed: January 16, 2007).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000074/dp04436_s4a2.htm) | |] [added: May 21, 2015; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000030/exhibit21agreementandplano.htm)] |

| [removed: 2.3*] [added: 10.15*] | | [removed: [Waiver Agreement dated as of January 16, 2007 between the Registrant and Caremark] [added: [Caremark] Rx, Inc. [removed: with respect to the Agreement and] [added: 2004 Incentive Stock] Plan [removed: Merger dated as of November 1, 2006 by and between Registrant and Caremark Rx, Inc] (incorporated by reference to Exhibit [removed: 2.3 to] [added: 99.2 of] the Registrant’s Registration Statement No. [removed: 333-139470] [added: 333-141481] on Form [removed: S-4/A] [added: S-8] filed [removed: January 16, 2007).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000074/dp04436_ex0203.htm) | |] [added: March 22, 2007; Commission File No. 011-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000715/dp05021_ex9902.htm)] |

| [removed: 2.4*] [added: 10.52*] | | [Amendment [removed: to Waiver Agreement,] dated [removed: as of February 12, 2007,] [added: January 22, 2015 to Nonqualified Stock Option Agreements] between [added: the] Registrant and [removed: Caremark Rx, Inc.] [added: Larry Merlo] (incorporated by reference to Exhibit [removed: 99.2] [added: 10.1] to the Registrant’s Current Report on Form 8-K [removed: dated February 13, 2007;] [added: filed January 23, 2015;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000368/dp04704_ex9902.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000002/exhibit101amendmentdatedja.htm)] |

| [removed: 2.5*] [added: 4.5] | | [removed: [Amendment to Waiver Agreement, dated as] [added: [Form] of [removed: March 8, 2007, between Registrant and Caremark Rx, Inc.] [added: the Registrant’s 2020 Note] (incorporated by reference to Exhibit [removed: 99.2] [added: 4.3] to the Registrant’s Current Report on Form 8-K [removed: dated] [added: filed] March [removed: 8, 2007;] [added: 12, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000603/dp04970_ex9902.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex43.htm)] |

| [removed: 2.6*] [added: 3.2] | | [removed: [Agreement and Plan of Merger dated as] [added: [By-laws] of [removed: August 12, 2008, among] the Registrant, [removed: Longs Drug Stores Corporation] [added: as amended] and [removed: Blue MergerSub Corp.] [added: restated] (incorporated by reference to Exhibit [removed: 2.1] [added: 3.2] to the Registrant’s Current Report on Form 8-K [removed: dated August 13, 2008;] [added: filed June 5, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010308002106/dp10986_ex0201.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518184593/d456958dex32.htm)] |

| [removed: 2.7*] [added: 10.7] | | [removed: [Agreement and Plan of Merger,] [added: [Term Loan Agreement] dated as of [removed: May 20, 2015,] [added: December 15, 2017, by and] among [removed: CVS Pharmacy, Inc., Tree Merger Sub, Inc.] [added: the Registrant, the lenders party thereto] and [removed: Omnicare, Inc.] [added: Barclays Bank PLC, as administrative agent] (incorporated by reference to Exhibit [removed: 2.1] [added: 10.1] to the Registrant’s Current Report on Form 8-K [removed: dated May 21, 2015;] [added: filed December 19, 2017;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000030/exhibit21agreementandplano.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex101.htm)] |

| [removed: 2.8*] [added: 10.5] | | [removed: [Agreement and Plan of Merger,] [added: [Amendment No. 1 to Five Year Credit Agreement] dated as of December [removed: 3,] [added: 15,] 2017, [added: to the Five Year Credit Agreement dated as of May 18, 2017, by and] among [removed: CVS Health Corporation, Hudson Merger Sub Corp.] [added: the Registrant, the lenders party thereto] and [removed: Aetna Inc.] [added: The Bank of New York Mellon, as Administrative Agent] (incorporated by reference to Exhibit [removed: 2.1] [added: 10.3] to the Registrant’s Current Report on Form 8-K [removed: dated] [added: filed] December [removed: 5,] [added: 19,] 2017; Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517361800/d444237dex21.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex103.htm)] |

| [removed: 2.9*] [added: 10.11] | | [Bridge Facility Commitment Letter dated December 3, 2017, by and among the Registrant, Barclays Bank PLC, Goldman Sachs Bank USA, Goldman Sachs Lending Partners LLC, Bank of America, N.A., and Merrill Lynch, Pierce Fenner & Smith Incorporated (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K [removed: dated] [added: filed] December 5, 2017; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517361800/d444237dex22.htm) | [removed: | |]

| [removed: 2.10*] [added: 10.12] | | [Joinder to Bridge Facility Commitment Letter dated as of December 15, 2017, by and among the Registrant, Barclays Bank PLC, Goldman Sachs Bank USA, Goldman Sachs Lending Partners LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and each of the Additional Commitment Parties party thereto (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K [removed: dated] [added: filed] December 19, 2017; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex21.htm) | [removed: | |]

| [removed: 3.1*] [added: 10.14*] | | [removed: [Amended] [added: [The Registrant’s 1996 Directors Stock Plan, as amended] and [removed: Restated Certificate of Incorporation of the Registrant] [added: restated November 5, 2002] (incorporated by reference to Exhibit [removed: 3.1 of] [added: 10.18 to the] Registrant’s Annual Report on Form 10-K for the fiscal year ended December [removed: 31, 1996;] [added: 28, 2002;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950135-97-001475.txt) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000110465903004471/j8483_ex10d18.htm)] |

| [removed: 3.1B*] [added: 3.1] | | [removed: [Certificate of Amendment to the Amended and Restated] [added: [Restated] Certificate of Incorporation [added: of the Registrant] (incorporated by reference to Exhibit [removed: 3.1 to] [added: 3.1C of] Registrant’s Current Report on Form 8-K [removed: dated March 22, 2007;] [added: filed June 5, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010307000726/dp05079e_ex0301.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518184593/d456958dex31c.htm)] |

| [removed: 3.1C*] [added: 4.6] | | [removed: [Certificate] [added: [Form] of [removed: Merger dated May 9, 2007] [added: the Registrant’s 2021 Note] (incorporated by reference to Exhibit [removed: 3.1C] [added: 4.4] to [added: the] Registrant’s [removed: Quarterly] [added: Current] Report on Form [removed: 10-Q dated November 1, 2007;] [added: 8-K filed March 12, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312507232584/dex31c.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex44.htm)] |

| [removed: 3.1D*] [added: 4.7] | | [removed: [Certificate] [added: [Form] of [removed: Amendment to] the [removed: Amended and Restated Certificate of Incorporation] [added: Registrant’s 2023 Note] (incorporated by reference to Exhibit [removed: 3.1] [added: 4.5] to [added: the] Registrant’s Current Report on Form 8-K [removed: dated May 13, 2010;] [added: filed March 12, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312510119116/dex31.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex45.htm)] |

| [removed: 3.1E*] [added: 10.49*] | | [removed: [Certificate of Amendment to the Amended] [added: [Amended] and Restated [removed: Certificate] [added: Employment Agreement dated as] of [removed: Incorporation] [added: December 21, 2012 between the Registrant and Larry Merlo] (incorporated by reference to Exhibit [removed: 3.1] [added: 10.31] to the Registrant’s [removed: Current] [added: Annual] Report [removed: On] [added: on] Form [removed: 8-K dated May 10,] [added: 10-K for the fiscal year ended December 31,] 2012; Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312512231727/d354761dex31.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000110465913011354/a12-28799_1ex10d31.htm)] |

| [removed: 3.1F*] [added: 4.8] | | [removed: [Certificate] [added: [Form] of [removed: Amendment to] the [removed: Amended and Restated Certificate of Incorporation] [added: Registrant’s 2025 Note] (incorporated by reference to Exhibit [removed: 3.1] [added: 4.6] to the Registrant’s Current Report [removed: On] [added: on] Form 8-K [removed: dated May 13, 2013;] [added: filed March 12, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480313000007/exhibit31certificateofamen.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex46.htm)] |

| [removed: 3.1G*] [added: 4.9] | | [removed: [Certificate] [added: [Form] of [removed: Amendment to] the [removed: Amended and Restated Certificate of Incorporation] [added: Registrant’s 2028 Note] (incorporated by reference to Exhibit [removed: 3.1] [added: 4.7] to the Registrant’s Current Report on Form 8-K [removed: dated September 3, 2014 (Commission] [added: filed March 12, 2018; Commission] File No. [removed: 001-01011)).](http://www.sec.gov/Archives/edgar/data/64803/000006480314000031/exhibit31certificateofamen.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex47.htm)] |

| [removed: 3.2*] [added: 4.10] | | [removed: [By-laws] [added: [Form] of the [removed: Registrant, as amended and restated] [added: Registrant’s 2038 Note] (incorporated by reference to Exhibit [removed: 3.2] [added: 4.8] to the Registrant’s Current Report on Form 8-K [removed: dated January 26, 2016;] [added: filed March 12, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480316000070/exhibit32amendmenttoby-laws.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex48.htm)] |

| [removed: 4.1*] [added: 4.1] | | [Specimen common stock certificate (incorporated by reference to Exhibit 4.1 to the Registration Statement of the Registrant [added: ((then known as CVS Corporation) as successor to Melville Corporation)] on Form 8-B [removed: dated] [added: filed] November 4, 1996; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-96-001174.txt) | [removed: | |]

| [removed: 10.5*] [added: 10.53*] | | [removed: [Stockholder] [added: [Change in Control] Agreement dated [removed: as of] December [removed: 2, 1996] [added: 22, 2008] between the [removed: Registrant, Nashua Hollis CVS, Inc.] [added: Registrant] and [removed: Linens ‘n Things, Inc.] [added: David Denton] (incorporated by reference to Exhibit [removed: 10(i)(6)] [added: 10.39] to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 1997;] [added: 2010;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0001047469-98-012979.txt) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312511040351/dex1039.htm)] |

| [removed: 10.6*] [added: 10.59*] | | [removed: [Tax Disaffiliation] [added: [Restrictive Covenant] Agreement dated [removed: as of December 2, 1996] [added: May 20, 2016] between the Registrant and [removed: Linens ‘n Things, Inc. and certain of their respective affiliates] [added: Jonathan C. Roberts] (incorporated by reference to Exhibit [removed: 10(i)(7)] [added: 10.45] to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 1997;] [added: 2016;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0001047469-98-012979.txt) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480317000006/ex1045robertsrestrictiveco.htm)] |

| [removed: 10.7*] [added: 10.1] | | [removed: [Second Amended and Restated Credit Agreement,] [added: [Credit Agreement] dated as of July [removed: 24, 2014,] [added: 1, 2015,] by and among the Registrant, the lenders party [removed: thereto, Barclays Bank PLC and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Bank of America, N.A. and Wells Fargo Bank, N.A., as Co-Documentation Agents,] [added: thereto] and The Bank of New York Mellon, as Administrative Agent (incorporated by reference to Exhibit [removed: 10.1] [added: 10.2] to the Registrant’s Quarterly Report on Form 10-Q for the [added: fiscal] quarter ended June 30, [removed: 2014] [added: 2015] (Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480314000028/exhibit1012014amendedandre.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000054/exhibit102creditagreementj.htm)] |

| [removed: 10.8*] [added: 10.2] | | [Amendment No. 1 to [removed: Second Amended and Restated] Credit [removed: Agreement,] [added: Agreement] dated as of December 15, 2017, [added: to the Credit Agreement dated as of July 1, 2015,] by and among the Registrant, the lenders party thereto and The Bank of New York Mellon, as [removed: administrative agent] [added: Administrative Agent] (incorporated by reference to Exhibit [removed: 10.4] [added: 10.5] to the Registrant’s Current Report on Form 8-K [removed: dated] [added: filed] December 19, 2017; Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex104.htm) | |] [added: 001-01-011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex105.htm)] |

| [removed: 10.9*] [added: 10.4] | | [Five Year Credit [removed: Agreement] [added: Agreement,] dated as of [removed: July 1, 2015,] [added: May 18, 2017,] by and among the Registrant, the lenders party [removed: thereto, Barclays Bank PLC and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Bank of America, N.A. and Wells Fargo Bank, N.A., as Co-Documentation Agents,] [added: thereto] and The Bank of New York Mellon, as Administrative Agent (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, [removed: 2015 (Commission] [added: 2017; Commission] File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000054/exhibit102creditagreementj.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837017006198/cvs-20170630ex1026f1efc.htm)] |

| [removed: 10.10*] [added: 10.6] | | [Amendment No. [removed: 1,] [added: 2 to Five Year Credit Agreement] dated as of [removed: December 15, 2017,] [added: May 17, 2018,] to [added: the] Five Year Credit Agreement dated as of [removed: July 1, 2015,] [added: May 18, 2017,] by and among the Registrant, the lenders party thereto and The Bank of New York Mellon, as [removed: administrative agent] [added: Administrative Agent] (incorporated by reference to Exhibit [removed: 10.5] [added: 10.4] to the Registrant’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K dated December 19, 2017;] [added: 10-Q for the fiscal quarter ended June 30, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex105.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837018006683/cvs-20180630ex1045acd05.htm)] |

| [removed: 10.11*] [added: 10.9] | | [364-Day Credit [removed: Agreement,] [added: Agreement] dated as of May [removed: 18, 2017,] [added: 17, 2018,] by and among the Registrant, the lenders party thereto and The Bank of New York Mellon, as [removed: administrative agent] [added: Administrative Agent] (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, [removed: 2017;] [added: 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837017006198/cvs-20170630ex101b6eb7e.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837018006683/cvs-20180630ex101574691.htm)] |

| [removed: 10.12*] [added: 10.10] | | [removed: [Amendment No. 1, dated as of December 15, 2017, to 364-Day] [added: [Five Year] Credit Agreement dated as of May [removed: 18, 2017,] [added: 17, 2018,] by and among the Registrant, the lenders party thereto and The Bank of New York Mellon, as [removed: administrative agent] [added: Administrative Agent] (incorporated by reference to Exhibit 10.2 to the Registrant’s [removed: Current] [added: Quarterly] Report on Form [removed: 8-K dated December 19, 2017;] [added: 10-Q for the fiscal quarter ended June 30, 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex102.htm) | |] [added: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837018006683/cvs-20180630ex102e86994.htm)] |

| [removed: 10.13*] [added: 10.3] | | [removed: [Five Year] [added: [Amendment No. 2 to] Credit [removed: Agreement,] [added: Agreement] dated as of May [removed: 18, 2017,] [added: 17, 2018, to the Credit Agreement dated as of July 1, 2015,] by and among the Registrant, the lenders party thereto and The Bank of New York Mellon, as [removed: administrative agent] [added: Administrative Agent] (incorporated by reference to Exhibit [removed: 10.2] [added: 10.3] to the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, [removed: 2017;] [added: 2018;] Commission File No. [removed: 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000155837017006198/cvs-20170630ex1026f1efc.htm) | |] [added: 001-01-011).](http://www.sec.gov/Archives/edgar/data/64803/000155837018006683/cvs-20180630ex1031b224c.htm)] |

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| 3. | Exhibits. The exhibits listed in the “Index to Exhibits” in this Item 15 are filed or incorporated by reference as part of this Annual Report on Form 10-K. Exhibits marked with an asterisk (*) are management contracts or compensatory plans or arrangements. Exhibits other than those listed are omitted because they are not required to be listed or are not applicable. Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the Registrant hereby agrees to furnish to the Securities and Exchange Commission a copy of any omitted instrument that is not required to be listed. |

| | | |

| | | |

| 2 | | Plan of acquisition, reorganization, arrangement, liquidation or succession |

| 2.3 | | [Master Transaction Agreement by and between Aetna Inc. and Hartford Life and Accident Insurance Company dated as of October 22, 2017.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex23.htm) |

| | | |

| 3 | | Articles of Incorporation and Bylaws |

| | | |

| 4 | | Instruments defining the rights of security holders, including indentures |

| 4.2 | | [Senior Indenture dated August 15, 2006, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed August 15, 2006; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000095010306001962/ex0401.htm) |

| 4.3 | | [Form of the Registrant’s 2020 Floating Rate Note (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed March 12, 2018; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex41.htm) |

| 4.4 | | [Form of the Registrant’s 2021 Floating Rate Note (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed March 12, 2018; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex42.htm) |

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| 4.11 | | [Form of the Registrant’s 2048 Note (incorporated by reference to Exhibit 4.9 to the Registrant’s Current Report on Form 8-K filed March 12, 2018; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000119312518079390/d547656dex49.htm) |

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| 10 | | Material Contracts |

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| 10.36* | | [The Registrant’s 2018 Management Incentive Plan.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex1036.htm) |

| 10.37* | | [The Registrant’s Severance Plan for Non-Store Employees amended as of November 28, 2018.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex1037.htm) |

| 10.38* | | [The Registrant’s Performance-Based Restricted Stock Unit Program, as amended.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex1038.htm) |

| 10.39* | | [Form of Non-Qualified Stock Option Agreement between the Registrant and selected employees of the Registrant.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex1039.htm) |

| 10.40* | | [Form of Restricted Stock Unit Agreement - Annual Grant - between the Registrant and selected employees of the Registrant.](https://www.sec.gov/Archives/edgar/data/64803/000006480319000013/ex1040.htm) |

A.

1.

| Notes to Consolidated Financial Statements | |

2.

Financial Statement Schedules

B.

Exhibits marked with an asterisk (*) are hereby incorporated by reference to exhibits or appendices previously filed by the Registrant as indicated in brackets following the description of the exhibit.

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| 3.1A* | | [Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective May 13, 1998 (incorporated by reference to Exhibit 4.1A to Registrant’s Registration Statement No. 333-52055 on Form S-3/A dated May 18, 1998).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-98-000528.txt) | | |

| 4 | | Pursuant to Regulation S-K, Item 601(b)(4)(iii)(A), no instrument which defines the rights of holders of long-term debt of the Registrant and its subsidiaries is filed with this report. The Registrant hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. | | |

| 10.1* | | [Stock Purchase Agreement dated as of October 14, 1995 between The TJX Companies, Inc. and Melville Corporation, as amended November 17, 1995 (incorporated by reference to Exhibits 2.1 and 2.2 to Melville’s Current Report on Form 8-K dated December 4, 1995; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-95-000438.txt) | | |

| 10.2* | | [Stock Purchase Agreement dated as of March 25, 1996 between Melville Corporation and Consolidated Stores Corporation, as amended May 3, 1996 (incorporated by reference to Exhibits 2.1 and 2.2 to Melville’s Current Report on Form 8-K dated May 5, 1996; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-96-000884.txt) | | |

| 10.3* | | [Distribution Agreement dated as of September 24, 1996 among Melville Corporation, Footstar, Inc. and Footstar Center, Inc. (incorporated by reference to Exhibit 99.1 to Melville’s Current Report on Form 8-K dated October 28, 1996; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-96-001151.txt) | | |

| 10.4* | | [Tax Disaffiliation Agreement dated as of September 24, 1996 among Melville Corporation, Footstar, Inc. and certain subsidiaries named therein (incorporated by reference to Exhibit 99.2 to Melville’s Current Report on Form 8-K dated October 28, 1996; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/0000950103-96-001151.txt) | | |

| 10.49* | | [Change in Control Agreement dated December 22, 2008 between the Registrant and the Registrant’s Executive Vice President and President of CVS Pharmacy (incorporated by reference to Exhibit 10.43 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000008/ex1043changeincontrolagree.htm) | | |

| 10.50* | | [Amendment dated as of December 31, 2012 to the Change in Control Agreement between the Registrant and the Registrant’s Executive Vice President and President of CVS Pharmacy (incorporated by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000008/ex1044amendmenttocidwpresi.htm) | | |

| 10.51* | | [Change in Control Agreement dated October 1, 2012 between the Registrant and the Registrant’s Executive Vice President, Chief Policy and External Affairs Officer and General Counsel (incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2015; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000023/ex101changeincontrolagreem.htm) | | |

| 10.52* | | [Restrictive Covenant Agreement dated June 1, 2014 between the Registrant and the Registrant’s Executive Vice President, Chief Policy and External Affairs Officer and General Counsel (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2015; Commission File No. 001-01011).](http://www.sec.gov/Archives/edgar/data/64803/000006480315000023/ex102restrictivecovenantag.htm) | | |

| 12 | | [Computation of Ratios of Earnings to Fixed Charges.](https://www.sec.gov/Archives/edgar/data/64803/000155837018000707/cvs-20171231ex12f296371.htm) | | |

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

| | CVS HEALTH CORPORATION | |

| Date: February 14, 2018 | By: | /s/ DAVID M. DENTON |

| | | David M. Denton |

| | | Executive Vice President and Chief Financial Officer |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

| Signature | | Title(s) | | Date |

| /s/ RICHARD M. BRACKEN | | Director | | February 14, 2018 |

| Richard M. Bracken | | | | |

| /s/ C. DAVID BROWN II | | Director | | February 14, 2018 |

| C. David Brown II | | | | |

| /s/ EVA C. BORATTO | | Executive Vice President - Controller and | | February 14, 2018 |

| Eva C. Boratto | | Chief Accounting Officer | | |

| | | (Principal Accounting Officer) | | |

| /s/ ALECIA A. DECOUDREAUX | | Director | | February 14, 2018 |

| Alecia A. DeCoudreaux | | | | |

| /s/ DAVID M. DENTON | | Executive Vice President and Chief | | February 14, 2018 |

| David M. Denton | | Financial Officer (Principal Financial | | |

| | | Officer) | | |

None.

Page 70

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

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| | | CVS HEALTH CORPORATION | |

| Date: | February 28, 2019 | By: | /s/ EVA C. BORATTO |

| | | | Eva C. Boratto |

| | | | Executive Vice President and Chief Financial Officer |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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