CVS Health (CVS) 10-K risk factor changes: FY2024 vs FY2023

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, those events or circumstances could have a material adverse effect on our businesses, [removed: operating results, cash flows, financial condition and/or stock price, among other effects on us.]

- Our [removed: litigation and regulatory] risk [removed: profiles are] [added: profile is] changing as we offer new products and services and expand in business areas beyond our historical businesses, and we may face increased regulatory risks related to our vertical integration strategy.

- We [removed: expect to continue to] [added: may] pursue acquisitions, joint ventures, strategic alliances and other inorganic growth opportunities, [added: as well as strategic divestitures,] which may be unsuccessful, cause us to assume unanticipated liabilities, disrupt our existing businesses, be dilutive or lead us to assume significant debt, among other things.

- Failure to meet customer and investor expectations, including with respect to [removed: environmental, social] [added: corporate responsibility] and [removed: governance (“ESG”)] [added: sustainability] goals, may harm our brand and reputation, our ability to retain and grow our customer base and membership.

Our use and disclosure of members’, customers’ and other constituents’ [removed: sensitive] [added: personal] information is subject to complex regulations.

Premiums for our Insured Health Care Benefits products, which comprised 94% of our Health Care Benefits [added: segment] revenues for [removed: 2023,] [added: 2024,] are priced in advance based on our forecasts of health care and other benefit costs during a fixed premium period, which is generally twelve months.

For example, our revenue on [added: Individual] Medicare policies is based on bids submitted in June of the year before the contract year.

As a result, our profits are particularly sensitive to the accuracy of our forecasts of the increases in health care and other benefit costs that we expect to [removed: occur] [added: incur] and our ability to anticipate and detect medical cost trends.

A number of factors contribute to rising health care and other benefit costs, including previously uninsured members entering the health care system; Medicare members’ utilization of supplemental benefits; other changes in members’ behavior, health care utilization patterns and utilization management; turnover in our membership, health care provider and member fraud; additional government mandated benefits or other regulatory changes, including changes to or as a result of the [removed: ACA;] [added: ACA and IRA;] changes in the health status of our members; the aging of the population and other changing demographic characteristics; advances in medical technology; increases in the number and cost of prescription drugs (including specialty pharmacy drugs and ultra-high cost drugs and therapies); direct-to-consumer marketing by drug manufacturers; the increasing influence of social media on our members’ health care utilization and other behaviors; the shift to a consumer-driven business model; changes in health care practices and general economic conditions (such as inflation and employment levels); increases in labor costs; pandemics, epidemics or disease outbreaks; influenza-related health care costs (which may be substantial and higher than we expected); clusters of high-cost cases; natural disasters and extreme weather events (which may increase in frequency or intensity as a result of climate change); and numerous other factors that are or may be beyond our control.

[removed: For example, the] [added: In] 2022-2023 influenza season had an earlier than average [removed: start;] [added: start, including as compared to] the [added: 2023-2024 influenza season; the] 2020-2021 influenza season was impacted by efforts taken to reduce the spread of COVID-19; and the 2019-2020 influenza season maintained a high level of severity for a longer period of time than average.

Furthermore, if we are not able to accurately and promptly anticipate and detect medical cost trends or accurately estimate the cost of incurred but not yet reported claims or reported claims that have not been paid, our ability to take timely corrective [added: actions to limit future health care costs and reflect our current benefit cost experience in our pricing process may be limited, which would further amplify the extent of any adverse impact on our operating results.]

Adverse economic conditions in the U.S. and abroad can materially and adversely impact our businesses, operating results, cash flows and financial [removed: condition, and we do not expect these conditions to improve in the near future.][added: condition.]

Adverse economic conditions in the U.S. and abroad, including those caused by inflation, high interest [removed: rates] [added: rates, declines in consumer confidence, increases in unemployment] and supply chain disruptions, [added: all of which we have experienced over the last number of years,] can materially and adversely impact our businesses, operating results, cash flows and financial condition, including:

- In our Health Care Benefits segment, by causing unanticipated increases and volatility in utilization of [removed: medical and other] covered [removed: services by our medical members,] [added: services,] increases in fraudulent claims and [removed: claim] disputes, changes in medical claim submission patterns and/or increases in medical unit costs and/or provider behavior as hospitals and other providers attempt to maintain revenue levels in [removed: their efforts to adjust] [added: response] to [removed: their own] economic [removed: challenges,] [added: conditions,] each of which would increase our costs and limit our ability to accurately detect, forecast, manage, reserve and price for our (and our self-insured customers’) medical cost trends and incurred and future health care and other benefits [removed: costs.][added: costs; causing customers and potential customers of our Health Care Benefits segment, particularly smaller employers and individuals, to forego obtaining or renewing their health and other coverage with us; and also affect our ability to profitably grow and diversify our Health Care Benefits membership.]

- By [removed: weakening the ability of our] [added: causing] customers, including self-insured customers in our Health Care Benefits segment, medical [added: members, medical] providers and the other companies [removed: with which we do business as well as our medical members] to [added: be unable to] perform their obligations to us [removed: or causing them not to perform those obligations, either of] which could reduce our operating results.

[added: -] In [removed: many instances, to acquire and retain] our [removed: government customers’ business,] [added: Health Care Benefits segment,] we must [added: often] bid against our competitors in a highly competitive [removed: environment.][added: environment to acquire and retain our government customers’ business.]

Winning bids [added: for Medicaid and dual eligible programs] often are challenged successfully by unsuccessful bidders, and may also be withdrawn or cancelled by the issuing agency.

CMS has proposed requiring that health plans offering certain dual eligible programs must also offer Medicaid programs, which [added: has resulted in the Company refraining from bidding in certain jurisdictions and] could further impact the Company’s ability to obtain or retain membership in its dual eligible programs.

- [removed: Customer contracts in] [added: In] our Health Care Benefits [removed: segment are generally for a period of one year, and] [added: segment,] our customers have considerable flexibility in moving between us and our competitors.

In addition, our Medicare, [added: Medicare Advantage,] Medicaid and CHIP products [removed: are] [added: may be] subject to termination without cause, periodic re-bid, rate adjustment and program redesign, as customers seek to contain their benefit costs, particularly in an uncertain [removed: economy, and our exposure to this risk is increasing as we grow our Government products membership.][added: economy.]

- We requested increases in our premium rates in our Commercial Health Care Benefits business for [removed: 2024] [added: 2025] and expect to request future increases in those rates in order to adequately price for projected medical cost trends, required expansions of coverage and rating limits, and significant assessments, fees and taxes imposed by federal and state governments, including as a result of the ACA.

Disruptive innovation by existing or new competitors [removed: could alter] [added: has altered, and is expected to continue to alter,] the competitive landscape in the future and require us to accurately identify and assess such alterations and make timely and effective changes to our strategies and business model to compete effectively.

[removed: We consummated the Signify Health acquisition in March 2023 through] [added: Our health care delivery businesses,] which we expanded [removed: our offerings] [added: with acquisitions] to include health risk assessments, value-based care and provider enablement [removed: services, and we also consummated the Oak Street Health acquisition in May 2023] [added: services] through [removed: which we offer multi-payor, senior-focused,] [added: our Signify Health business, and additional senior-focused] value-based primary care [added: services] for [removed: Medicare-eligible patients, broadening] [added: Medicare eligible patients through] our [removed: ability to provide primary care services.][added: Oak Street Health business, face unique risks.]

[removed: The additional risks to which our] [added: Our] Signify Health business [removed: is subject] [added: faces risks which] include, but are not limited to, the following:

- the regulatory and business risks associated with participation in certain government health care programs, [removed: including] [added: including, among others,] the [removed: Medicare Shared Savings Program through Signify Health’s Caravan accountable care organizations (“ACOs”)] [added: MSSP] and [added: ACO REACH models, and] identification of diagnosis codes related to risk adjustment payments under Part C of the Medicare program;

- health reform initiatives and changes in the rules governing government health care programs, including rules related to the use of in-home health risk [removed: assessments; and][added: assessments for the purpose of capturing individual risk use to calculate an individual’s risk adjustment factor or a change to how patient-level risk is determined for CMS programs;]

- use of “open source” software in its technology, which may make it easier for others to gain access or compromise its proprietary [removed: technology.][added: technology;]

[removed: The additional risks to which our] [added: Our] Oak Street Health business is subject [removed: include,] [added: to additional risks including,] but [removed: are] not limited to, the following:

- laws regulating the corporate practice of medicine and the associated agreements entered into with physician practice groups restrict the manner in which the Oak Street Health business is able to direct the operations and otherwise exercise control of its physician practice [removed: groups;][added: groups]

The additional risks faced by [removed: Signify Health and Oak Street Health] [added: our health care delivery businesses] may also compound, or be heightened by, many of our other risks, including the risks related to adverse economic conditions in the U.S. and abroad, cybersecurity, and compliance with applicable laws and regulations, among others.

To compete effectively on Public Exchanges, we have developed or acquired the technology, systems, tools and talent necessary to interact with Public Exchanges and engage Public Exchange consumers [added: through enhanced consumer-focused sales, marketing channels and customer interfaces.]

We [removed: have] [added: are] also [removed: created] [added: creating] new customer service programs and product offerings.

[removed: While participating] [added: To participate] on the Public Exchanges, we [removed: will] have to respond to pricing and other actions taken by existing competitors and regulators as well as potentially disruptive new entrants, which could reduce our profit margins.

In addition, there can be no assurance that our pricing or other actions will result in the profitability of our Public Exchange products in [removed: 2024] [added: 2025] or any future year.

We have set [removed: 2024] [added: 2025] premium rates for our Public Exchange products based on our projections, including as to the health status and quantity of membership and utilization of medical and/or other covered services by members.

The accuracy of the projections reflected in our pricing may be impacted by (i) adverse selection among individuals who require or utilize more expensive medical and/or other covered services, (ii) other plans’ withdrawals from participation in the Public Exchanges we serve, (iii) a rapid increase or decline in membership, and (iv) legislation, regulations, enforcement activity and/or judicial decisions that cause Public Exchanges to operate in a manner different than what we projected in setting our premium rates, including the potential expiration of premium subsidies [removed: in 2025.][added: and enhanced premium tax credits.]

Our Insured Health Care Benefits products that involve greater potential risk generally tend to be more profitable than our ASC [removed: products.][added: products, but ASC products continue to rise in popularity.]

A [added: continuing] shift of enrollees from more profitable products to less profitable products could have a material adverse effect on the Health Care Benefits segment’s operating results.

Negative publicity may come as a result of adverse media coverage, litigation against us and other industry participants, the ongoing public debates over drug pricing, PBMs, government involvement in drug pricing and purchasing, changes to the ACA, [removed: “surprise” medical bills,] governmental hearings and/or investigations, actual or perceived shortfalls regarding our industries’ or our own products, including Medicare Advantage plans in general, and/or business practices (including PBM operations, drug pricing and insurance coverage determinations) and social media and other media relations activities.

Any reserve, including a premium deficiency reserve, may [removed: be][added: be insufficient.]

operating results, cash flows, financial condition and/or stock price, among other effects on us.

- Our health care delivery businesses face unique risks

- A cyberattack or other information security incident could significantly disrupt our operations.

For example, the length and severity of the influenza season can have an impact on health care and other benefit costs.

- By affecting the ability of our customers to obtain adequate financing, which could result in an inability of our customers to pay timely, or at all, the amounts owed to us.

- By causing an increasing in the prevalence of high deductible health plans and health plan designs favoring co-insurance over co-payments.

Our Health Care Delivery Businesses Face Unique Risks.

- participation in CMS Innovation Center models, such as ACO REACH, which are subject to changes annually, generally in ways meant to reduce available payments to participants, including benchmarks that can be changed after the end of the performance year, and which has an end date without a plan for ongoing participation in a model by those participating;

- impacts of fraud or anomalous billing on shared savings in CMS Innovation Center models;

- success in large, national ACOs is dependent on the collective efforts and compliance of a wide range of participating clients, and for those clients to be able to meet new and changing requirements such as changes to interoperability and reporting requirements; and

- challenges in rural and post-acute reimbursement due to their significant dependence on fee-for-service revenue.

- participation in CMS Innovation Center models, such as ACO REACH, which are subject to changes annually, generally in ways meant to reduce available payments to participants, including benchmarks that can be changed after the end of the performance year, and which has an end date without a plan for ongoing participation in a model by those participating;

For example, during the third quarter of 2024, we recorded premium deficiency reserves of approximately $1.1 billion related to our Medicare, individual exchange and Medicaid product lines within the Health Care Benefits segment, primarily related to anticipated losses for the 2024 coverage year.

The Company did not have any premium deficiency reserves as of December 31, 2024.

The Company did not establish any premium deficiency reserves during 2023 or 2022.

The occurrence of natural disasters or extreme weather events, such as hurricanes, tropical storms, floods, wildfires, earthquakes, tsunamis, cyclones, typhoons, extended winter storms, droughts and tornadoes; epidemics, pandemics or disease

formulary management, affiliate reimbursement, contractual guarantees and reconciliations, reimbursement mandates, required reporting, compensation, purchase discount and/or rebate arrangements with drug manufacturers and/or other PBM services; changes to the laws and regulations governing PBMs’, PDPs’ and/or Managed Medicaid organizations’ interactions with government funded health care programs; changes to or adoption of laws and/or regulations relating to claims processing and billing; changes to immigration policies; changes to patent laws; changes with respect to tax and trade policies, tariffs and other government regulations affecting trade between the U.S. and other countries; and other public policy initiatives.

There is also uncertainty surrounding potential changes to the health care regulatory environment in the U.S. For example, potential efforts to reform federal government processes and reduce expenditures as well as pressures on and uncertainty surrounding the U.S. federal government’s budget and potential changes in budgetary priorities could adversely affect the funding for individual programs, including government programs, upon which our business depends.

Executive orders covering health care and other subjects including immigration, AI, energy and the federal work force as well as the work force of public and private companies, if implemented through agency action, may also impact the Company.

Potential regulatory changes related to tax, trade, economic and monetary policy and heightened diplomatic tensions or political and civil unrest, among other potential changes, could adversely impact the global economy and our operating results.

and treble damages), and certain of these proceedings also seek changes in our business practices.

We are also receiving an increasing number of audits related to our PBM network reconciliation processes, and audits related to our use of prior authorization, which could result in reputational risks and changes to policies that may limit our use of prior authorization.

The results of any audit may be adverse to us.

different risk profile than the products and services that we historically have offered and increase our exposure to additional risks.

Based on CMS’ notice, Medicare Advantage rates resulted in an expected average increase in revenue for the Medicare Advantage industry of 3.70%, which includes a risk score trend increase of 3.86%.

Risk scores vary among Medicare Advantage plans depending on the specific population served, so this increase does not represent an actual guaranteed payment increase.

Without including the risk score trend increase, the advance 2026 rates will result in an expected average increase in revenue for the Medicare Advantage industry of 2.23%, though the rates may vary widely depending on the provider group and patient demographics.

Based on the 2024 ratings, 88% of the Company’s Medicare Advantage members are in 2025 Medicare Advantage plans that are rated 4 stars or higher.

CMS also gives PDPs star ratings that affect each PDP’s enrollment.

The Company’s PDP plans were rated 3.5 stars for 2025.

Medicare Advantage and PDP plans that are rated less than 3 stars for three consecutive years are subject to contract termination by CMS.

CMS continuously evaluates how and where risk adjustment is captured, which from time-to-time has included the capture of diagnosis codes in home visits.

A legislative or regulatory change to the ability of Medicare Advantage plans to use home visits as a means to evaluate and diagnosis their members’ health conditions, or substantial changes in the risk adjustment mechanism, including those that result from the final Part C contract-level Risk Adjustment

- The IRA contains significant changes to the Part D program that began in 2023 and will continue to 2032 that shifts more of the claim liability to plans and away from the government, including a complete redesign of the Part D standard benefit effective in 2025.

We are in the process of winding down our international insurance operations in 2025.

We depend

We have also seen an increase in ransomware attacks in our industry.

years have given rise to increased enforcement activity, litigation, and other disputes.

Our businesses depend in large part on these systems to adequately price our

While these new requirements are currently subject to an injunction, if the injunction is lifted or CMS attempts to impose restrictions on broker and agent compensation in the future, we will need to comply with the new restrictions.

- Our recent acquisitions of Signify Health and Oak Street Health subject us to new and additional risks beyond those to which we have been historically subject.

- We and our vendors have experienced and continue to experience information security incidents.

We can provide no assurance that we or our vendors will be able to contain, detect or prevent incidents.

actions to limit future health care costs and reflect our current benefit cost experience in our pricing process may be limited, which would further amplify the extent of any adverse impact on our operating results.

- By causing customers and potential customers of our Health Care Benefits and Pharmacy & Consumer Wellness segments to purchase fewer products and/or products that generate less profit for us than the ones they currently purchase or otherwise would have purchased.

- By causing customers and potential customers of our Health Care Benefits segment, particularly smaller employers and individuals, to forego obtaining or renewing their health and other coverage with us.

- In our Health Care Benefits segment, we are seeking to grow our dual eligible plan membership over the next several years.

Our recent acquisitions of Signify Health and Oak Street Health subject us to new and additional risks beyond those to which we have been historically subject.

The Signify Health and the Oak Street Health businesses are subject to many of the risks described in this Item 1A, as well as certain additional risks that are different from the risks our businesses have historically faced.

The Signify Health and the Oak Street Health businesses may also be subject to additional risks the existence or significance of which we may not have anticipated prior to the respective acquisitions of such businesses.

Any risks associated with the Signify Health or the Oak Street Health business, if they materialize, could adversely affect our business, financial condition and results of operations, including our ability to timely and effectively integrate the businesses in our operations and the timing and extent of realization of synergies and other benefits that we expected in connection with the acquisitions.

Our experience in managing the additional risks associated with the acquisitions is more limited than our experience in managing the risks associated with our historical businesses, and there is no assurance that we will be able to effectively manage or mitigate such risks.

In January 2022, we entered into the Public Exchanges in eight states, expanded to a total of twelve states in 2023, and further expanded to a total of 17 states in 2024.

through enhanced consumer-focused sales, marketing channels and customer interfaces.

Historically, smaller employer groups have been more likely to purchase Insured Health Care Benefits products because such purchasers are generally unable or unwilling to bear greater liability for health care expenditures, although over the last several years even relatively small employers have moved to ASC products.

insufficient.

For example, as of December 31, 2021, we established a premium deficiency reserve of $16 million related to Medicaid products in the Health Care Benefits segment, but did not establish a premium deficiency reserve as of December 31, 2023 or 2022.

Our operating results are affected by the health of the economy in general and in the communities we serve.

The U.S. financial markets have been experiencing, and may continue to experience, volatility and disruptions, including diminished liquidity and credit availability, inflation, declines in consumer confidence and economic growth and increases in unemployment rates, all of which have resulted in uncertainty about economic stability.

Our businesses are affected by economic instability and declines in consumer confidence in general and in the communities we serve, and various other economic factors, including inflation and changes in consumer purchasing power, preferences and/or spending patterns.

An unfavorable, uncertain or volatile economic environment, as we have experienced recently as a result of inflation, rising interest rates, supply chain disruptions and COVID-19, has caused and could cause a decline in drug utilization, an increase in health care utilization, a dampening demand for PBM services and retail products, and an increase in theft or other crime that could impact our retail locations.

If our customers’ operating and financial performance deteriorates, or they are unable to make scheduled payments or obtain adequate financing, as a result of adverse economic conditions or otherwise, our customers may not be able to pay timely, or may delay payment of, amounts owed to us.

Any inability of our customers to pay us for our products and services may adversely affect our businesses, operating results and cash flows.

acceptable terms, our ability to execute sale-leaseback transactions under acceptable terms and the value of our investment portfolio.

In addition, our Health Care Benefits membership remains concentrated in certain U.S. geographies and in certain industries.

Unfavorable changes in health care or other benefit costs or reimbursement rates or increased competition in those geographic areas where our membership is concentrated could therefore have a disproportionately adverse effect on our Health Care Benefits segment’s operating results.

Our Health Care Benefits membership has been and may continue to be affected by workforce reductions by our customers due to adverse and/or uncertain general economic conditions, especially in the U.S. geographies and industries where our membership is concentrated.

As a result, we may not be able to profitably grow and diversify our Health Care Benefits membership geographically, by product type or by customer industry, and our revenues and operating results may be disproportionately affected by adverse changes affecting our customers.

Adverse changes in the U.S. economy, consumer confidence and economic conditions could have an adverse effect on our businesses and financial results.

These risks and uncertainties include, but are not limited to: our ability to set and execute on our operational strategies and achieve our goals within the currently projected costs and the expected timeframes; the availability and cost of technological advancements, renewable

In addition, in November 2020, the HHS released the Rebate Rule, which eliminates the regulatory safe harbor from prosecution under the AKS for rebates from pharmaceutical companies to PBMs in Medicare Part D and in Medicaid MCOs, replacing it with two far narrower safe harbors designed to directly benefit patients with high out-of-pocket costs and to change the way PBMs are compensated.

The new safe harbors are (i) for rebates which are passed on to the patient at the point of sale and (ii) for flat service fee payments made to PBMs which cannot be tied to the list prices of drugs.

The PCMA, which represents PBMs, has filed a suit in an effort to block the Rebate Rule, claiming that the Rebate Rule would lead to higher premiums in Medicare Part D and was adopted in an unlawful manner.

It is unclear whether the Rebate Rule will be enforceable, whether pharmaceutical companies will respond by reducing list prices, whether list prices in the private market may also be reduced, and what the resulting impact will be to PBMs or the Company.

The Bipartisan Infrastructure Act of 2021 delays the effective date of the rebate rule to January 2026, and the IRA further delays the Rebate Rule through 2032.

Additionally, the Consolidated Appropriations Act of 2021 was signed into law in December 2020 and contains transparency provisions requiring group health plans and health insurance issuers to report certain prescription drug costs, overall spending on health services and prescription drugs, and information about premiums and the impact of rebates and other remuneration on premiums and out-of-pocket costs to the Tri-Departments.

No later than 18 months after the first submission and bi-annually

thereafter, the Tri-Departments will release a public report on drug pricing trends, drug reimbursement, and the impact of drug prices on premiums.

The first filings of plan year data were required in December 2022 and will be required annually in June of each year on an ongoing basis.

eligible special needs plan programs, and we also may be required to pay significant fines and/or other monetary penalties.

As of December 31, [removed: 2023,] [added: 2024,] the Company had more than 9,000 retail locations, more than 1,000 walk-in [removed: medical clinics, 204] [added: and] primary care medical clinics, a leading pharmacy benefits manager with approximately [removed: 108] [added: 90] million plan members and expanding specialty pharmacy solutions, and a dedicated senior pharmacy care business serving more than [removed: one million] [added: 800,000] patients per year.

The Company also serves an estimated more than [removed: 35] [added: 36] million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”).

[removed: On May 2,] [added: During] 2023, the Company [removed: also acquired] [added: completed the acquisition of two key health care delivery assets – Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, value-based care and provider enablement services, and] Oak Street Health, Inc. (“Oak Street Health”), a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

See Note [removed: 19 ‘‘Segment Reporting’’] [added: 3 ‘‘Restructuring’’] included in Item 8 of this 10-K for [removed: segment financial] [added: additional] information.

The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” The Company sold Insured plans directly to individual consumers through the individual public health insurance exchanges (“Public Exchanges”) in [removed: 12] [added: 17] states as of December 31, [removed: 2023.][added: 2024.]

The Company also [removed: announced the launch of] [added: launched] CordavisTM, a wholly owned subsidiary that [removed: will work] [added: works] directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products.

The Health Services segment’s clients and customers are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, CMS, plans offered on [removed: Insurance Exchanges] [added: public] and [added: private health insurance exchanges and] other sponsors of health benefit plans throughout the U.S., patients who receive care in the Health Services segment’s medical clinics, virtually or in the home, as well as Covered Entities.

As of December 31, [removed: 2023,] [added: 2024,] the Pharmacy & Consumer Wellness segment operated more than 9,000 retail locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services.

The following information summarizes the Company’s results of operations for [removed: 2023] [added: 2024] compared to [removed: 2022.][added: 2023.]

For discussion of the Company’s results of operations for [removed: 2022] [added: 2023] compared to [removed: 2021,] [added: 2022,] see “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations with Retrospective Adjustments” for the year ended December 31, 2022, which was revised to reflect the items noted above and is] [added: Operations”] included in [removed: Exhibit 99.1 to] the Company’s [removed: Current] [added: Annual] Report on Form [removed: 8-K] [added: 10-K for the fiscal year ended December 31, 2023] filed with the U.S. Securities and Exchange Commission (the “SEC”) on [removed: May 25, 2023.][added: February 7, 2024.]

| | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2023] [added: 2024] vs. [removed: 2022] [added: 2023] | | | | | | | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | | | |

| In millions | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

| Products | | | $ | [removed: 245,138] [added: 231,521] | | | | | $ | [removed: 226,616] [added: 245,138] | | | | | $ | [removed: 203,738] [added: 226,616] | | | | | $ | [removed: 18,522] [added: (13,617)] | | | | | [removed: 8.2] [added: (5.6)] | | % | | | | $ | [removed: 22,878] [added: 18,522] | | | | | [removed: 11.2] [added: 8.2] | | % |

| Premiums | | | [removed: 99,192] [added: 122,896] | | | | | | [removed: 85,330] [added: 99,192] | | | | | | [removed: 76,132] [added: 85,330] | | | | | | [removed: 13,862] [added: 23,704] | | | | | | [removed: 16.2] [added: 23.9] | | % | | | | [removed: 9,198] [added: 13,862] | | | | | | [removed: 12.1] [added: 16.2] | | % |

| Services | | | [removed: 12,293] [added: 16,239] | | | | | | [removed: 9,683] [added: 12,293] | | | | | | [removed: 11,042] [added: 9,683] | | | | | | [removed: 2,610] [added: 3,946] | | | | | | [removed: 27.0] [added: 32.1] | | % | | | | [removed: (1,359)] [added: 2,610] | | | | | | [removed: (12.3)] [added: 27.0] | | % |

| Net investment income | | | [removed: 1,153] [added: 2,153] | | | | | | [removed: 838] [added: 1,153] | | | | | | [removed: 1,199] [added: 838] | | | | | | [removed: 315] [added: 1,000] | | | | | | [removed: 37.6] [added: 86.7] | | % | | | | [removed: (361)] [added: 315] | | | | | | [removed: (30.1)] [added: 37.6] | | % |

| Total revenues | | | [removed: 357,776] [added: 372,809] | | | | | | [removed: 322,467] [added: 357,776] | | | | | | [removed: 292,111] [added: 322,467] | | | | | | [removed: 35,309] [added: 15,033] | | | | | | [removed: 10.9] [added: 4.2] | | % | | | | [removed: 30,356] [added: 35,309] | | | | | | [removed: 10.4] [added: 10.9] | | % |

| Cost of products sold | | | [removed: 217,098] [added: 206,287] | | | | | | [removed: 196,892] [added: 217,098] | | | | | | [removed: 175,803] [added: 196,892] | | | | | | [removed: 20,206] [added: (10,811)] | | | | | | [removed: 10.3] [added: (5.0)] | | % | | | | [removed: 21,089] [added: 20,206] | | | | | | [removed: 12.0] [added: 10.3] | | % |

| Health care costs | | | [removed: 86,247] [added: 115,121] | | | | | | [removed: 71,073] [added: 86,247] | | | | | | [removed: 64,188] [added: 71,073] | | | | | | [removed: 15,174] [added: 28,874] | | | | | | [removed: 21.3] [added: 33.5] | | % | | | | [removed: 6,885] [added: 15,174] | | | | | | [removed: 10.7] [added: 21.3] | | % |

| Restructuring charges [added: (4)] | | | [removed: 507] [added: —] | | | | | | — | | | | | | — | | | | | | 507 | | | | | | [removed: 100.0] | | [removed: %] | | | | [removed: — | | | | | | —] [added: 507] | | [removed: %] |

| Opioid litigation charges | | | [removed: —] [added: 100] | | | | | | [removed: 5,803] [added: —] | | | | | | [removed: —] [added: 5,803] | | | | | | [removed: (5,803)] [added: 100] | | | | | | [removed: (100.0)] [added: 100.0] | | % | | | | [removed: 5,803] [added: (5,803)] | | | | | | [removed: 100.0] [added: (100.0)] | | % |

| Loss on assets held for sale | | | [removed: 349] [added: —] | | | | | | [removed: 2,533] [added: 349] | | | | | | [removed: —] [added: 2,533] | | | | | | [removed: (2,184)] [added: (349)] | | | | | | [removed: (86.2)] [added: (100.0)] | | % | | | | [removed: 2,533] [added: (2,184)] | | | | | | [removed: 100.0] [added: (86.2)] | | % |

| Operating expenses | | | [removed: 39,832] [added: 41,606] | | | | | | [removed: 38,212] [added: 39,832] | | | | | | [removed: 37,021] [added: 38,212] | | | | | | [removed: 1,620] [added: 1,774] | | | | | | [removed: 4.2] [added: 4.5] | | % | | | | [removed: 1,191] [added: 1,620] | | | | | | [removed: 3.2] [added: 4.2] | | % |

| Total operating costs | | | [removed: 344,033] [added: 364,293] | | | | | | [removed: 314,513] [added: 344,033] | | | | | | [removed: 278,801] [added: 314,513] | | | | | | [removed: 29,520] [added: 20,260] | | | | | | [removed: 9.4] [added: 5.9] | | % | | | | [removed: 35,712] [added: 29,520] | | | | | | [removed: 12.8] [added: 9.4] | | % |

| Operating income | | | [removed: 13,743] [added: 8,516] | | | | | | [removed: 7,954] [added: 13,743] | | | | | | [removed: 13,310] [added: 7,954] | | | | | | [removed: 5,789] [added: (5,227)] | | | | | | [removed: 72.8] [added: (38.0)] | | % | | | | [removed: (5,356)] [added: 5,789] | | | | | | [removed: (40.2)] [added: 72.8] | | % |

| Interest expense | | | [removed: 2,658] [added: 2,958] | | | | | | [removed: 2,287] [added: 2,658] | | | | | | [removed: 2,503] [added: 2,287] | | | | | | [removed: 371] [added: 300] | | | | | | [removed: 16.2] [added: 11.3] | | % | | | | [removed: (216)] [added: 371] | | | | | | [removed: (8.6)] [added: 16.2] | | % |

| [removed: Loss] [added: Gain] on early extinguishment of debt | | | [removed: —] [added: (491)] | | | | | | — | | | | | | [removed: 452] [added: —] | | | | | | [removed: —] [added: (491)] | | | | | | [removed: —] [added: (100.0)] | | % | | | | [removed: (452)] [added: —] | | | | | | [removed: (100.0)] [added: —] | | % |

| Other income | | | [removed: (88)] [added: (99)] | | | | | | [removed: (169)] [added: (88)] | | | | | | [removed: (182)] [added: (169)] | | | | | | [removed: 81] [added: (11)] | | | | | | [removed: 47.9] [added: (12.5)] | | % | | | | [removed: 13] [added: 81] | | | | | | [removed: 7.1] [added: 47.9] | | % |

| Income before income tax provision | | | [removed: 11,173] [added: 6,148] | | | | | | [removed: 5,836] [added: 11,173] | | | | | | [removed: 10,537] [added: 5,836] | | | | | | [removed: 5,337] [added: (5,025)] | | | | | | [removed: 91.4] [added: (45.0)] | | % | | | | [removed: (4,701)] [added: 5,337] | | | | | | [removed: (44.6)] [added: 91.4] | | % |

| Income tax provision | | | [removed: 2,805] [added: 1,562] | | | | | | [removed: 1,509] [added: 2,805] | | | | | | [removed: 2,548] [added: 1,509] | | | | | | [removed: 1,296] [added: (1,243)] | | | | | | [removed: 85.9] [added: (44.3)] | | % | | | | [removed: (1,039)] [added: 1,296] | | | | | | [removed: (40.8)] [added: 85.9] | | % |

| Net income | | | [removed: 8,368] [added: 4,586] | | | | | | [removed: 4,327] [added: 8,368] | | | | | | [removed: 7,989] [added: 4,327] | | | | | | [removed: 4,041] [added: (3,782)] | | | | | | [removed: 93.4] [added: (45.2)] | | % | | | | [removed: (3,662)] [added: 4,041] | | | | | | [removed: (45.8)] [added: 93.4] | | % |

| Net (income) loss attributable to noncontrolling interests | | | [removed: (24)] [added: 28] | | | | | | [removed: (16)] [added: (24)] | | | | | | [removed: 12] [added: (16)] | | | | | | [removed: (8)] [added: 52] | | | | | | [removed: (50.0)] [added: 216.7] | | % | | | | [removed: (28)] [added: (8)] | | | | | | [removed: (233.3)] [added: (50.0)] | | % |

| Net income attributable to CVS Health | | | $ | [removed: 8,344] [added: 4,614] | | | | | $ | [removed: 4,311] [added: 8,344] | | | | | $ | [removed: 8,001] [added: 4,311] | | | | | $ | [removed: 4,033] [added: (3,730)] | | | | | [removed: 93.6] [added: (44.7)] | | % | | | | $ | [removed: (3,690)] [added: 4,033] | | | | | [removed: (46.1)] [added: 93.6] | | % |

Commentary - [removed: 2023] [added: 2024] compared to [removed: 2022][added: 2023]

- The Company’s effective income tax rate [removed: decreased] [added: increased] to [removed: 25.1%] [added: 25.4%] in [removed: 2023] [added: 2024] compared to [removed: 25.9%] [added: 25.1%] in the prior year.

[removed: Outlook][added: 2025 Outlook]

- [removed: Competitive pressures in the PBM industry have caused the] [added: The] Company [removed: to continue] [added: continues] to share with clients a larger portion of rebates, fees and/or discounts received from pharmaceutical manufacturers.

- Future [removed: costs are] [added: financial performance will be] influenced by a number of factors including competitive demand for products and services, legislative and regulatory considerations, and labor and other market dynamics, including inflation.

[removed: We evaluate] [added: The Company evaluates] and [removed: adjust our] [added: adjusts its] approach in each of the markets [removed: we serve,] [added: it serves,] considering all relevant factors.

- The Company expects benefits from [added: ongoing] enterprise-wide cost savings initiatives and investments in efficiencies, which aim to reduce the Company’s operating cost structure in a way that improves the consumer experience and is sustainable.

The Health Care Benefits segment’s primary customers, its members, primarily access the segment’s products and services through employer groups, government-sponsored plans or individually.

The Health Care Benefits segment also serves customers who purchase products and services that are ancillary to its health insurance products.

| Restructuring charges | | | 1,179 | | | | | | 507 | | | | | | — | | | | | | 672 | | | | | | 132.5 | | % | | | | 507 | | | | | | 100.0 | | % |

- Total revenues increased $15.0 billion, or 4.2%, in 2024 compared to 2023.

The increase in total revenues was driven by growth in the Health Care Benefits and Pharmacy & Consumer Wellness segments, partially offset by a decline in the Health Services segment.

- Operating expenses increased $1.8 billion, or 4.5%, in 2024 compared to 2023.

The increase in operating expenses was primarily due to increased operating expenses to support growth in the business.

- Operating income decreased $5.2 billion, or 38.0%, in 2024 compared to 2023.

The decrease in operating income was primarily driven by a decrease in adjusted operating income, which is primarily the result of elevated Medicare utilization in the Health Care Benefits segment, and an increase in restructuring charges compared to 2023.

These decreases in operating income were partially offset by an increase in net realized capital gains, the absence of a $349 million loss on assets held for sale related to the write-down of the Company’s Omnicare® long-term care business recorded in the prior year, as well as lower acquisition-related transaction and integration costs.

- Interest expense increased $300 million, or 11.3%, in 2024 compared to 2023, due to higher debt in the year ended December 31, 2024 primarily as a result of long-term debt issuances in 2024.

- During 2024, the gain on early extinguishment of debt relates to the Company’s repayment of $2.6 billion of its outstanding senior notes pursuant to its tender offers for such senior notes in December 2024, which resulted in a gain on early extinguishment of debt of $491 million.

The increase was primarily due to the mix of pre-tax income and certain non-deductible expenses, partially offset by basis differences on the disposition of certain investments and utilization of tax credits in the year ended December 31, 2024 compared to the prior year.

- The Company expects medical membership declines in its Medicare and individual exchange products.

Medical membership disruptions may result in volatility in the Company’s financial results.

- Utilization persisted at elevated levels through the fourth quarter of 2024.

Although the level of utilization is difficult to accurately predict, at this time, the Company expects that continued elevated utilization will pressure its Health Care Benefits segment and its health care delivery assets in its Health Services segment into 2025.

- Increases in utilization beyond the Company’s projections may also result in the Company having to record premium deficiency reserves within in the Health Care Benefits segment during 2025.

- The Company’s Medicaid business is experiencing medical cost pressures, largely driven by higher than expected acuity following the resumption of member redeterminations.

While the Company continues to work closely with its state partners to ensure the underlying trends are reflected in its premium rates going forward, it is uncertain when these pressures will be fully offset by state rate updates.

- The Company’s individual exchange business is subject to a risk adjustment program whereby the Company estimates its ultimate risk adjustment receivable or payable based on the risk of its qualified plan members relative to the average risk of members of other qualified plans in comparable markets.

Changes in the Company’s risk relative to the markets’ risk, including changes resulting from volatility in membership, could adversely impact the Company’s estimate of its risk adjustment receivable or payable.

- Glucagon-like peptide 1 (“GLP-1”) supply disruptions, and the associated impact on product mix, could pressure the Company’s ability to deliver savings to clients and could impact the Company’s results.

- Regulatory changes or consumer sentiment shift for immunizations may negatively impact national demand impacting financial results.

- Implementation of new tariffs create exposure for increased costs and supply chain disruptions that can adversely impact consumer demand or financial results.

- Consumer spend management and a decline in consumer discretionary spending, as well as a shift to value, grocery and digital retailers, could drive lower front store sales.

During the third quarter of 2024, the Company finalized an enterprise-wide restructuring plan intended to streamline and simplify the organization, improve efficiency and generate expected cost savings of over $500 million in 2025.

Refer to Note 3 ‘‘Restructuring’’ for actions implemented under the plan.

- Changes in conditions in the U.S. and global capital markets can significantly and adversely affect interest rates and capital market conditions which could result in increased financing costs.

- Actions taken by ratings agencies, including changes in the Company’s debt ratings, could impact the Company’s future borrowing costs, access to capital markets and new store operating lease costs.

This legislative and regulatory activity could adversely affect

| 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total revenues | | | $ | 130,665 | | | | | $ | 173,605 | | | | | $ | 124,500 | | | | | $ | 451 | | | | | $ | (56,412) | | | | | $ | 372,809 | |

| Adjusted operating income (loss) | | | 307 | | | | | | 7,243 | | | | | | 5,774 | | | | | | (1,348) | | | | | | — | | | | | | 11,976 | | |

| Amortization of intangible assets (1) | | | 1,175 | | | | | | 595 | | | | | | 253 | | | | | | 2 | | | | | | 2,025 | | | | | |

| Restructuring charges (4) | | | — | | | | | | — | | | | | | 747 | | | | | | 432 | | | | | | 1,179 | | | | | |

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

| Adjusted operating income (loss) | | | $ | 307 | | | | | $ | 7,243 | | | | | $ | 5,774 | | | | | $ | (1,348) | | | | | $ | 11,976 | | | | |

| Office real estate optimization charges (5) | | | 49 | | | | | | 5 | | | | | | — | | | | | | (8) | | | | | | | | | | | | 46 | | |

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

During the year ended December 31, 2023, the Company completed the acquisition of two key health care delivery assets to enhance its ability to execute on its care delivery strategy by advancing its primary care, home-based care and provider enablement capabilities.

On March 29, 2023, the Company acquired Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, value-based care and provider enablement services.

Both Signify Health and Oak Street Health are included within the Health Services segment.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business.

As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions.

In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations.

This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

Prior period segment financial information has been recast to conform with the current period presentation.

The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates.

The Company entered Public Exchanges in five additional states effective January 2024.

During 2023, the Company completed the acquisition of two key health care delivery assets – Signify Health, a leader in health risk assessments, value-based care and provider enablement services, and Oak Street Health, a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

COVID-19

The coronavirus disease 2019 (“COVID-19”) continues to impact the economies of the U.S. and other countries around the world.

The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition in the years ended December 31, 2023, 2022 and 2021, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Annual Report on Form 10-K.

Financial information for the years ended December 31, 2022 and 2021 has been revised to reflect the impact of the following items, as applicable:

*•*The realignment of the Company’s segments to correspond with changes made to its operating model as described in Note 1 ‘‘Significant Accounting Policies’’ included in Item 8 of this Form 10-K, including the discontinuance of the former Maintenance Choice® segment reporting practice as described within the “Segment Analysis” section of this Item 7.

*•*The impact of the adoption of a new accounting standard related to the accounting for long-duration insurance contracts (the “long-duration insurance accounting standard”), which the Company adopted on January 1, 2023 using a modified retrospective transition method as of January 1, 2021, as described in Note 1 “Significant Accounting Policies” included in Item 8 of this Form 10-K.

*•*The exclusion of the impact of net realized capital gains or losses from adjusted operating income, as described within the “Segment Analysis” section of this Item 7.

| Store impairments | | | — | | | | | | — | | | | | | 1,358 | | | | | | — | | | | | | — | | % | | | | (1,358) | | | | | | (100.0) | | % |

| Goodwill impairment | | | — | | | | | | — | | | | | | 431 | | | | | | — | | | | | | — | | % | | | | (431) | | | | | | (100.0) | | % |

- Total revenues increased $35.3 billion, or 10.9%, in 2023 compared to 2022.

The increase in total revenues was driven by growth across all segments.

- Operating expenses increased $1.6 billion, or 4.2%, in 2023 compared to 2022.

The increase in operating expenses was primarily due to increased operating expenses to support growth in the business, operating expenses associated with Oak Street Health and Signify Health, including the amortization of acquired intangible assets, incremental investments in business operations, acquisition-related transaction and integration costs recorded in 2023 and the absence of a $250 million pre-tax gain on the sale of bswift LLC (“bswift”) and a $225 million pre-tax gain on the sale of PayFlex Holdings, Inc. (“PayFlex”) recorded in 2022.

These increases were partially offset by gains from anti-trust legal settlements and the favorable impact of business initiatives in 2023.

- Operating expenses as a percentage of total revenues decreased to 11.1% in 2023 compared to 11.8% in 2022.

The decrease in operating expenses as a percentage of total revenues was primarily due to the increases in total revenues described above.

- Operating income increased $5.8 billion, or 72.8%, in 2023 compared to 2022.

The increase in operating income was primarily driven by the absence of $5.8 billion of opioid litigation charges recorded in 2022 and increases in the Pharmacy & Consumer Wellness segment, primarily driven by the absence of a $2.5 billion loss on assets held for sale recorded in 2022 related to the write-down of the Company’s Omnicare® long-term care business (“LTC business”) which was partially offset by continued pharmacy reimbursement pressure and decreased COVID-19 vaccinations and diagnostic testing compared to 2022, as well as an increase in the Health Services segment.

These increases in operating income were partially offset by declines in the Health Care Benefits segment, including the absence of the $250 million pre-tax gain on the sale of bswift and the $225 million pre-tax gain on the sale of PayFlex recorded in 2022, as well as the restructuring charges and acquisition-related transaction and integration costs recorded in 2023.

- Interest expense increased $371 million, or 16.2%, in 2023 compared to 2022, due to higher debt in the year ended December 31, 2023 to fund the acquisitions of Signify Health and Oak Street Health.

The decrease was primarily due to the absence of certain nondeductible legal charges and basis differences on the sale of bswift and PayFlex in 2022.

These decreases were partially offset by the absence of the impact of certain discrete tax items concluded in 2022.

- Membership enrollment in Medicare Advantage plans exceeded expectations.

- Utilization, particularly in Medicare Advantage programs, persisted at elevated levels into the end of 2023.

At this time, the level of continued utilization is difficult to accurately predict.

- The Company expects growth in its new Cordavis, Oak Street Health and Signify Health businesses.

- Competitive pressures in the retail pharmacy industry are increasing, resulting in aggressive generic pricing programs, the growth of discount cards and increased utilization of digital commerce.

Effective for the first quarter of 2023, adjusted operating income also excludes the impact of net realized capital gains or losses.

Segment financial information for the years ended December 31, 2022 and 2021 has been revised to conform with the current period presentation for the following items:

The Company’s investment portfolio supported the following products at December 31, [removed: 2023] [added: 2024] and [removed: 2022:][added: 2023:]

| In millions | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | |

| Experience-rated products | | | $ | [removed: 723] [added: 652] | | | | | $ | [removed: 744] [added: 723] | |

| Remaining products | | | [removed: 25,555] [added: 30,689] | | | | | | [removed: 23,147] [added: 25,555] | | |

| Total investments [removed: (1)] | | | $ | [removed: 26,278] [added: 31,341] | | | | | $ | [removed: 23,891] [added: 26,278] | |

The debt securities in the Company’s investment portfolio had an average credit quality rating of A at both December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] with a fair value of approximately [removed: $4.6] [added: $5.9] billion and [removed: $6.0] [added: $4.6] billion rated AAA at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively.

The fair value of debt securities that were rated below investment grade (that is, having a credit quality rating below BBB-/Baa3) was [removed: $2.1] [added: $2.4] billion and [removed: $1.9] [added: $2.1] billion at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively (of which [removed: 1.5% and] 1.6% [added: and 1.5%] at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively, supported experience-rated products).

At December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the Company held [removed: $218] [added: $82] million and [removed: $202] [added: $218] million, respectively, of municipal debt securities that were guaranteed by third parties, representing [added: less than] 1% [added: and 1%] of total investments at [removed: both] December 31, [removed: 2023] [added: 2024] and [removed: 2022.][added: 2023, respectively.]

These securities had an average credit quality rating of AA+ at both December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] with the guarantee.

These securities had an average credit quality rating of [removed: AA-] [added: AA] and [removed: A] [added: AA-] at December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively, without the guarantee.

At both December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] less than 1% of debt securities were valued using inputs that reflect the Company’s assumptions (categorized as Level 3 inputs in accordance with GAAP).

[added: If a debt] security is in an unrealized loss position and the Company does not have the intent to sell and it is more likely than not that the Company will not have to sell such security before recovery of its amortized cost basis, the Company bifurcates the impairment into credit-related and non-credit related components.

The amount of the credit-related component is recorded as an allowance for credit losses and recognized in net income, and the amount of the non-credit related component is included in other [removed: comprehensive income (loss).]

Assuming an immediate increase of 100 basis points in interest rates, the theoretical decline in the fair values of market sensitive instruments at December 31, [removed: 2023] [added: 2024] is as follows:

- The fair value of long-term debt issued by the Company would decline by approximately [removed: $3.5] [added: $3.3] billion [removed: ($4.4] [added: ($4.1] billion pretax).

- The theoretical reduction in the fair value of interest rate sensitive investments partially offset by the theoretical reduction in the fair value of interest rate sensitive liabilities would result in a net decline in fair value of approximately [removed: $570] [added: $650] million [removed: ($720] [added: ($820] million pretax) related to continuing non-experience-rated products.

Net reductions in fair value would be reflected as an unrealized loss in equity, as the Company classifies these debt securities as available for [removed: sale] [added: sale,] and the effect of the interest rate on interest rate sensitive liabilities is recorded in other comprehensive income (loss).

If the value of the Company’s publicly traded domestic equity securities held within its investment portfolio were to decline by 15%, this would result in a net decline in fair value of [removed: $32] [added: $43] million [removed: ($41] [added: ($54] million pretax).

Based on overall exposure to interest rate risk and equity price risk, the Company believes that these changes in market rates and prices would not materially affect consolidated near-term financial condition, operating results or cash flows as of December 31, [removed: 2023.][added: 2024.]

At December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the Company did not have any material foreign currency exchange rate or commodity derivative instruments in place and believes its exposure to foreign currency exchange rate risk is not material.

The Company and its vendors have experienced diverse [removed: cyber attacks] [added: cyberattacks] and expect to continue to experience [removed: cyber attacks] [added: cyberattacks] going forward.

The Company is dedicating and will continue to dedicate significant resources and incur significant expenses to maintain and update on an ongoing basis the systems and processes that are designed to mitigate the information security risks it faces and protect the security of its computer systems, software, [added: networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, disrupt or degrade service or cause other damage.]

The impact of [removed: cyber attacks] [added: cyberattacks] has not been material to the Company’s operations or operating results through December 31, [removed: 2023.][added: 2024.]

The Board and its Audit Committee [removed: and Nominating and Corporate Governance Committee] are regularly informed [removed: regarding the Company’s information security policies, practices and status.]

comprehensive income (loss).

regarding the Company’s information security policies, practices and status.

_____________________________________________

(1)Includes long-term investments of $17 million which were accounted for as assets held for sale and were included in assets held for sale on the consolidated balance sheet at December 31, 2022.

See Note 2 ‘‘Acquisitions, Divestitures and Asset Sales’’ included in Item 8 of this 10-K for additional information.

If a debt

networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, disrupt or degrade service or cause other damage.

As of December 31, [removed: 2023,] [added: 2024,] we had more than 9,000 retail locations, more than 1,000 walk-in [removed: medical clinics, 204] [added: and] primary care medical clinics, a leading pharmacy benefits manager with approximately [removed: 108] [added: 90] million plan members and expanding specialty pharmacy solutions, and a dedicated senior pharmacy care business serving more than [removed: one million] [added: 800,000] patients per year.

We serve an estimated more than [removed: 35] [added: 36] million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”).

[removed: On May 2,] [added: During] 2023, the Company [removed: also acquired] [added: completed the acquisition of two key health care delivery assets – Signify Health, Inc. (“Signify Health”) a leader in health risk assessments, value-based care and provider enablement services, and] Oak Street Health, Inc. (“Oak Street [removed: Health”),] [added: Health”)] a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

[removed: This] [added: The Health Services] segment [removed: will also provide] [added: pays an administrative service fee to the Pharmacy & Consumer Wellness segment, in exchange for which the Pharmacy & Consumer Wellness segment provides] pharmacy fulfillment [added: and patient management] services to support the Health Services segment’s specialty and mail order pharmacy offerings.

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers, serving an estimated more than [removed: 35] [added: 36] million people as of December 31, [removed: 2023.][added: 2024.]

[added: The Company markets its products and services to employer groups, individuals, college students, part-time and hourly] workers, health plans, [removed: health care providers (“providers”),] [added: providers,] governmental units, government-sponsored plans, labor groups and expatriates.

The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk of medical and dental care costs) as “ASC.” Health Care Benefits [added: segment] products and services consist of the following:

The segment also has a portfolio of additional health products and services that complement its medical products such as dental plans, behavioral health and employee [removed: assistance products, provider network access and vision products.]

The Company offered network-based HMO and/or PPO plans in 46 states and Washington, D.C. in [removed: 2023.][added: 2024.]

The Company offered PDP plans in all 50 states and Washington, D.C. in [removed: 2023.][added: 2024.]

The Company offered a wide selection of Medicare Supplement products in 49 states and Washington, D.C. in [removed: 2023.][added: 2024.]

The Company offered these services on an Insured or ASC basis in 16 states in [removed: 2023.][added: 2024.]

At December 31, [removed: 2023,] [added: 2024,] the Company’s underlying nationwide provider network had approximately [removed: 1.7] [added: 1.9] million participating providers.

[removed: The] Company seeks Health Plan accreditation for Aetna Inc. (“Aetna”) HMO plans from the National Committee for Quality Assurance (“NCQA”), a private, not-for-profit organization that evaluates, accredits and certifies a wide range of health care organizations.

As of December 31, [removed: 2023,] [added: 2024,] all of the Company’s Commercial HMO and all of ALIC’s PPO members who were eligible participated in HMOs or PPOs that are accredited by the NCQA.

The Company also offers quality and outcome measurement programs, quality improvement [removed: programs,] [added: programs] and health care data analysis systems to providers and purchasers of health care services.

[removed: The multiple platforms] [added: Platforms] are supported by an integration layer to facilitate the transfer of real-time data.

The Company is making concerted investments in emerging technology capabilities such as [removed: voice,] artificial intelligence [removed: and robotics] [added: (“AI”)] to further automate, [removed: reduce cost] [added: augment] and improve [added: its operational capabilities, and to improve] the experience for [removed: all of its constituents.][added: providers, patients, and consumers.]

Medical membership is dispersed throughout the U.S., and the Company also serves medical members in certain countries outside the U.S. The Company offers a broad range of traditional, voluntary and consumer-directed health insurance products [added: and related services, many of which are available nationwide.]

The Company sold Insured plans directly to individual consumers through the individual public health insurance exchanges (“Public Exchanges”) in [removed: 12] [added: 17] states as of December 31, [removed: 2023.][added: 2024.]

Health Care Benefits segment revenues from the federal government accounted for [removed: 14%] [added: 18%] of the Company’s consolidated total revenues in [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021.][added: 2022.]

Contracts with CMS for coverage of Medicare-eligible individuals in the Health Care Benefits segment accounted for approximately [removed: 73%, 74%] [added: 74%, 73%] and [removed: 79%,] [added: 74%,] respectively, of the Company’s consolidated revenues from the federal government in [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021.][added: 2022.]

CMS also considers inflation, changes in utilization patterns and average per capita [removed: fee-][added: fee-for-service Medicare costs in the calculation of the fixed capitation payment or premium.]

CMS released the Company’s [removed: 2024] [added: 2025] star ratings in October [removed: 2023.][added: 2024.]

The Company’s [removed: 2024] [added: 2025] star ratings will be used to determine which of the Company’s Medicare Advantage plans have ratings of four stars or higher and qualify for bonus payments in [removed: 2025.][added: 2026.]

Based on the Company’s membership at December 31, [removed: 2023, 87%] [added: 2024, 88%] of the Company’s Medicare Advantage members were in plans with [removed: 2024] [added: 2025] star ratings of at least 4.0 stars, compared to [removed: the unmitigated 21%] [added: 91%] of the Company’s Medicare Advantage members being in plans with [removed: 2023] [added: 2024] star ratings of at least 4.0 stars based on the Company’s membership at December 31, [removed: 2022.][added: 2023.]

[removed: Additional Health Care Benefits segment competitors include other types of medical and dental provider organizations, various specialty service providers] (including PBM services providers), health care consultants, financial services companies, integrated health care delivery organizations (networks of providers who also coordinate administrative services for and assume insurance risk of their members), third party administrators (“TPAs”) and, for certain plans, programs sponsored by the federal or state governments.

The Health Care Benefits segment’s ASC plans compete primarily with other large commercial health care benefit [added: insurance] companies, numerous for-profit and not-for-profit organizations operating under licenses from the Blue Cross and Blue Shield Association and TPAs.

The Company also [removed: announced the launch of] [added: launched] CordavisTM, a wholly owned subsidiary that [removed: will work] [added: works] directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products.

During the year ended December 31, [removed: 2023,] [added: 2024,] the Company’s PBM filled or managed [removed: 2.3] [added: 1.9] billion prescriptions on a 30-day equivalent basis.

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 clients that [added: select one of the Company’s formularies.]

The Company maintains a national network of approximately [removed: 66,000] [added: 65,000] retail pharmacies, consisting of approximately [removed: 38,000] [added: 37,000] chain pharmacies (which include CVS pharmacy locations) and approximately 28,000 independent pharmacies, in the U.S., including Puerto Rico, the District of Columbia, Guam and the U.S. Virgin Islands.

This review may involve communications with the prescriber and, with the prescriber’s approval when required, can result in [removed: generic substitution, therapeutic interchange or other actions] [added: interventions] designed to help reduce cost and/or improve quality of treatment.

Substantially all of the Company’s specialty mail order pharmacies also have been accredited by The Joint Commission and the Accreditation Commission for Health Care (“ACHC”), which are independent, not-for-profit organizations that accredit and certify health care programs and organizations in the U.S. The ACHC accreditation includes an additional accreditation by the Pharmacy Compounding Accreditation Board, which certifies compliance with the highest level of pharmacy compounding [removed: standards.][added: standards, and a distinction in Rare Diseases and Orphan Drugs.]

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

The Company’s care management program covers diseases such as rheumatoid arthritis, [added: Parkinson’s disease, epilepsy and multiple sclerosis and is accredited by the NCQA.]

[removed: Once engaged, the] [added: The] Company integrates population health analytics, social support services and primary care into the care model to drive improved patient outcomes.

The Company’s clinics implement a branded and consumer-focused design to create a welcoming environment that engages [removed: patients.][added: patients in highly accessible, convenient locations close to where patients live, work and shop.]

[removed: As of] [added: During the year ended] December 31, [removed: 2023,] [added: 2024,] the [removed: Company operated 204] [added: Company’s] centers [removed: across 25 states, which] provided care for approximately [removed: 270,000] [added: 500,000] patients.

[removed: The Company’s customers practice value-based care primarily through] two programs administered by CMS, the Accountable Care Organization (“ACO”) Realizing Equity, Access, and Community Health (“REACH”) Model (collectively, “ACO REACH”) and the Medicare Shared Savings Program (“MSSP”), under which the Company served [removed: approximately 793,000] [added: a total of more than 1 million] covered lives as of December 31, [removed: 2023.][added: 2024.]

The Health Care Benefits segment’s primary customers, its members, primarily access the segment’s products and services through employer groups, government-sponsored plans or individually.

The Health Care Benefits segment also serves customers who purchase products and services that are ancillary to its health insurance products.

assistance products, provider network access and vision products.

The Company also sells Insured plans directly to individual consumers in certain geographies through the Public Exchanges.

The Health Care Benefit segment’s quarterly operating income progression may be impacted by exogenous factors, which include regulatory or legal changes, as well as shifting care patterns.

Additional Health Care Benefits segment competitors include other types of medical and dental provider organizations, various specialty service providers

negatively affect member health and client pharmacy and medical spend.

The Company offers an integrated strategy that aims to help decrease the potential for inappropriate opioid use while preserving access for those with genuine chronic pain needs through concurrent and retrospective claims’ review.

In addition, this strategy aims to address potential fraud, waste, and abuse across multiple drug classes through surveillance and communications to prescribers and pharmacies.

Core medication support products such as Pharmacy Advisor and Drug Savings Review optimize utilization through digital, phone, in-person, and provider-facing outreach to help participating plan members with certain chronic diseases to identify gaps in care, adhere to their prescribed medications, ensure efficient use of those medications, and manage their overall health conditions.

The CVS Weight Management program optimizes utilization of GLP-1 medication and provides the label-recommended lifestyle support and coaching to maximize and maintain weight loss on these therapies, while addressing new indications (e.g., cardiovascular disease).

As of December 31, 2024, the Company operated 239 centers across 27 states.

The Company’s customers practice value-based care primarily through

During the year ended December 31, 2024, the Company performed more than 3 million IHEs.

*Cordavis*

The Company launched Cordavis, a wholly owned subsidiary that works directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products.

Through Cordavis, the Company intends to develop a portfolio of products that will provide broader access to biosimilars in the U.S. As access to biosimilars increases, it is expected to generate more competition in the market which should lead to lower costs and result in higher savings for our clients.

the Company is still able to contact declines, typically resulting in fewer IHEs scheduled during the fourth quarter of each calendar year.

pricing program.

management programs.

During the third quarter of 2024, in connection with an enterprise-wide restructuring plan, the Company completed a strategic review of its retail business and determined that it plans to close an additional 271 retail stores in 2025.

Each year we conduct engagement surveys that provide colleagues the opportunity to share opinions and experiences with respect to

Workforce Strategy

At CVS Health, our goal is to attract the most talented and qualified workforce in health care and to develop and retain a work force to support and advance our strategic priorities.

We believe that our workforce strategy should be responsive to and reflect the broad and diverse communities whose health care needs we serve.

We are committed to developing a pipeline of critical skills to power CVS Health for the future.

We partner with colleges and universities across many professional fields.

For example, the CVS Health PharmD tuition assistance program is available to all eligible CVS Pharmacy interns.

In addition, CVS Health is creating transformational solutions to workforce development through dynamic community Workforce Innovation and Talent Centers (WITCs), tailored to the specific needs of each community, incorporating education and skill development, as we help advance future leaders.

Respect is a cornerstone of our culture, and a centerpiece of our workplace strategy.

To do our best when people need us the most means we strive every day to achieve the highest level of trust and respect from our colleagues, our customers, and our communities.

Our Heart At Work behaviors are guiding principles for how we lead.

We emphasize trust, collaboration, and innovation.

Those aspects of our culture show up in our Respect Works Here campaign.

Our comprehensive and well-executed workforce practices have allowed us to be recognized as a VETSIndexes 3-Star Employer and to earn a 100 percent score on the Disability Equality Index, meaning the Company is recognized as a “Best Place to Work for Disability Inclusion”.

We disclose more information on our workforce strategy in our annual Impact Report.

Hazard and Awareness Reporting Program.

We also engage leaders in promoting a culture of safety and measure performance through a comprehensive safety index that leverages both leading and lagging indicators.

Impact Strategy

We are building a world of health around every individual.

During the year ended December 31, 2023, the Company completed the acquisition of two key health care delivery assets to enhance its ability to execute on its care delivery strategy by advancing its primary care, home-based care and provider enablement capabilities.

On March 29, 2023, the Company acquired Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, value-based care and provider enablement services.

Both Signify Health and Oak Street Health are included within the Health Services segment.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business.

The Company’s CODM is the Chief Executive Officer.

As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions.

In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations.

Prior period segment financial information has been recast to conform with the current period presentation.

See Note 19 ‘‘Segment Reporting’’ included in Item 8 of this 10-K for segment financial information.

The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly

and related services, many of which are available nationwide.

Depending on the product, the Company markets to a range of customers, including employer groups, individuals, college students, part-time and hourly workers, health plans, providers, governmental units, government-sponsored plans, labor groups and expatriates.

The Company entered Public Exchanges in five additional states effective January 2024.

for-service Medicare costs in the calculation of the fixed capitation payment or premium.

Refer to “Medicare Star Ratings” within the “Government Regulation” section of this Item 1 for further discussion of the decrease in the Company’s star ratings.

During the year ended December 31, 2023, overall medical costs continued to progress toward normalized utilization in the first quarter.

Beginning in the second quarter of 2023, the segment experienced higher than previously expected medical cost trend in Medicare Advantage driven by increased outpatient and supplemental benefit utilization when compared with pandemic influenced utilization levels in the prior year.

This elevated utilization continued through year end, which resulted in elevated medical costs throughout the remainder of 2023.

During the year ended December 31, 2022, the impact of COVID-19 within the Health Care Benefits segment generally stabilized as a result of the Company’s ability to capture COVID-19 related medical costs in pricing, and the segment experienced a return to a more normal seasonality pattern, as described above.

During the year ended December 31, 2021, the customary quarterly operating income progression was impacted by COVID-19.

While overall medical costs in the first quarter were generally consistent with historical baseline levels in the aggregate, the segment experienced increased COVID-19 testing and treatment costs and lower Medicare risk-adjusted revenue.

During the second quarter, COVID-19 testing and treatment costs persisted, however at levels significantly lower than those observed during the first quarter.

Beginning in the third quarter, medical costs once again increased primarily driven by the spread of the emerging new variants of COVID-19, which resulted in increased testing and treatment costs that continued throughout the fourth quarter.

During 2023, the Company completed the acquisition of two key health care delivery assets – Signify Health, a leader in health risk assessments, value-based care and provider enablement services, and Oak Street Health, a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

select one of the Company’s formularies.

In connection with its new operating model adopted in the first quarter of 2023, the Company consolidated its specialty and mail order pharmacy fulfillment operations, which were previously included in the former Pharmacy Services segment, with its retail and long-term care pharmacy fulfillment operations in the newly formed Pharmacy & Consumer Wellness segment.

Under this new operating model, the Health Services segment pays an administrative service fee to the Pharmacy & Consumer Wellness segment, in exchange for which the Pharmacy & Consumer Wellness segment provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

To help address prescription opioid abuse and misuse, 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.

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.

Parkinson’s disease, epilepsy and multiple sclerosis and is accredited by the NCQA.

Through its centers and management services organization, the Company combines an innovative health care model and its proprietary Canopy technology with superior patient experience and quality care.

The Company engages its patients through the use of an innovative community outreach approach.

While traditional healthcare facilities are often located in medical office buildings that are removed from where patients spend a majority of their time, the Company targets locations in highly accessible, convenient locations close to where patients live, work and shop.

Each of the Company’s centers has a consistent look and feel, which contributes to the success in acquiring patients.

Subsequent to the Company’s acquisition of Oak Street Health, the Company has opened 31 locations.

ACOs employ a retrospective payment system in which Medicare reimburses providers in accordance with their usual fee-for-service payment schedule, while also tracking the total fee-for-service costs for all billable services rendered for attributed Medicare beneficiaries over the course of a year.

CMS periodically compares the total amount of all fee-for-service payments for a beneficiary against a benchmark price for the annual cost of such beneficiary’s medical

care.

If the total fee-for-service costs exceed the benchmark price, then typically the ACO owes a portion of the difference to CMS and, likewise, if total fee-for-service costs are lower than the benchmark price, then CMS pays a portion of the difference, representing the shared savings achieved, to the ACO.

The Company’s ACO REACH contracts are global risk arrangements and the ACO assumes full risk for the total cost of care for aligned beneficiaries and, accordingly, the ACO is subject to 100% of shared savings and shared losses.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

[removed: ][added: ]

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately [removed: $88,547,881,979] [added: $74,072,103,405] as of June 30, [removed: 2023,] [added: 2024,] based on the closing price of the common stock on the New York Stock Exchange.

As of [removed: January 31, 2024,] [added: February 5, 2025,] the registrant had [removed: 1,258,449,553] [added: 1,260,795,063] shares of common stock outstanding.

Information contained in the definitive proxy statement for CVS Health Corporation’s [removed: 2024] [added: 2025] Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, [removed: 2023] [added: 2024] (the “Proxy Statement”), is incorporated by reference in Parts III and IV to the extent described therein.

| Item 1: | | | [removed: [Business](#i39a9ffb3d54a4bfdbacb5b3fe645889f_13)] [added: [Business](#i8a55793d673e4b4fbd3bff43443155d0_13)] | | | [removed: [3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_13)] [added: [2](#i8a55793d673e4b4fbd3bff43443155d0_13)] | | |

| Item 1A: | | | [Risk [removed: Factors](#i39a9ffb3d54a4bfdbacb5b3fe645889f_34)] [added: Factors](#i8a55793d673e4b4fbd3bff43443155d0_34)] | | | [removed: [38](#i39a9ffb3d54a4bfdbacb5b3fe645889f_34)] [added: [35](#i8a55793d673e4b4fbd3bff43443155d0_34)] | | |

| Item 1B: | | | [Unresolved Staff [removed: Comments](#i39a9ffb3d54a4bfdbacb5b3fe645889f_37)] [added: Comments](#i8a55793d673e4b4fbd3bff43443155d0_37)] | | | [removed: [67](#i39a9ffb3d54a4bfdbacb5b3fe645889f_37)] [added: [63](#i8a55793d673e4b4fbd3bff43443155d0_37)] | | |

| Item 1C: | | | [removed: [Cybersecurity](#i39a9ffb3d54a4bfdbacb5b3fe645889f_1951)] [added: [Cybersecurity](#i8a55793d673e4b4fbd3bff43443155d0_40)] | | | [removed: [67](#i39a9ffb3d54a4bfdbacb5b3fe645889f_1951)] [added: [63](#i8a55793d673e4b4fbd3bff43443155d0_40)] | | |

| Item 2: | | | [removed: [Properties](#i39a9ffb3d54a4bfdbacb5b3fe645889f_40)] [added: [Properties](#i8a55793d673e4b4fbd3bff43443155d0_43)] | | | [removed: [68](#i39a9ffb3d54a4bfdbacb5b3fe645889f_40)] [added: [64](#i8a55793d673e4b4fbd3bff43443155d0_43)] | | |

| Item 3: | | | [Legal [removed: Proceedings](#i39a9ffb3d54a4bfdbacb5b3fe645889f_43)] [added: Proceedings](#i8a55793d673e4b4fbd3bff43443155d0_46)] | | | [removed: [69](#i39a9ffb3d54a4bfdbacb5b3fe645889f_43)] [added: [65](#i8a55793d673e4b4fbd3bff43443155d0_46)] | | |

| Item 4: | | | [Mine Safety [removed: Disclosures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_46)] [added: Disclosures](#i8a55793d673e4b4fbd3bff43443155d0_49)] | | | [removed: [69](#i39a9ffb3d54a4bfdbacb5b3fe645889f_46)] [added: [65](#i8a55793d673e4b4fbd3bff43443155d0_49)] | | |

| | | | [Information about our Executive [removed: Officers](#i39a9ffb3d54a4bfdbacb5b3fe645889f_49)] [added: Officers](#i8a55793d673e4b4fbd3bff43443155d0_52)] | | | [removed: [70](#i39a9ffb3d54a4bfdbacb5b3fe645889f_49)] [added: [66](#i8a55793d673e4b4fbd3bff43443155d0_52)] | | |

| Item 5: | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i39a9ffb3d54a4bfdbacb5b3fe645889f_55)] [added: Securities](#i8a55793d673e4b4fbd3bff43443155d0_58)] | | | [removed: [72](#i39a9ffb3d54a4bfdbacb5b3fe645889f_55)] [added: [67](#i8a55793d673e4b4fbd3bff43443155d0_58)] | | |

| Item 6: | | | [removed: [Reserved](#i39a9ffb3d54a4bfdbacb5b3fe645889f_58)] [added: [Reserved](#i8a55793d673e4b4fbd3bff43443155d0_61)] | | | [removed: [74](#i39a9ffb3d54a4bfdbacb5b3fe645889f_58)] [added: [69](#i8a55793d673e4b4fbd3bff43443155d0_61)] | | |

| Item 7: | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i39a9ffb3d54a4bfdbacb5b3fe645889f_61)] [added: Operations](#i8a55793d673e4b4fbd3bff43443155d0_64)] | | | [removed: [75](#i39a9ffb3d54a4bfdbacb5b3fe645889f_61)] [added: [70](#i8a55793d673e4b4fbd3bff43443155d0_64)] | | |

| Item 7A: | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i39a9ffb3d54a4bfdbacb5b3fe645889f_97)] [added: Risk](#i8a55793d673e4b4fbd3bff43443155d0_97)] | | | [removed: [105](#i39a9ffb3d54a4bfdbacb5b3fe645889f_97)] [added: [100](#i8a55793d673e4b4fbd3bff43443155d0_97)] | | |

| Item 8: | | | [Financial Statements and Supplementary [removed: Data](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)] [added: Data](#i8a55793d673e4b4fbd3bff43443155d0_100)] | | | [removed: [108](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)] [added: [103](#i8a55793d673e4b4fbd3bff43443155d0_100)] | | |

| Item 9: | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i39a9ffb3d54a4bfdbacb5b3fe645889f_184)] [added: Disclosure](#i8a55793d673e4b4fbd3bff43443155d0_196)] | | | [removed: [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_184)] [added: [192](#i8a55793d673e4b4fbd3bff43443155d0_196)] | | |

| Item 9A: | | | [Controls and [removed: Procedures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_187)] [added: Procedures](#i8a55793d673e4b4fbd3bff43443155d0_199)] | | | [removed: [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_187)] [added: [192](#i8a55793d673e4b4fbd3bff43443155d0_199)] | | |

| Item 9C: | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i39a9ffb3d54a4bfdbacb5b3fe645889f_193)] [added: Inspections](#i8a55793d673e4b4fbd3bff43443155d0_205)] | | | [removed: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_193)] [added: [193](#i8a55793d673e4b4fbd3bff43443155d0_205)] | | |

| Item 10: | | | [Directors, Executive Officers and Corporate [removed: Governance](#i39a9ffb3d54a4bfdbacb5b3fe645889f_199)] [added: Governance](#i8a55793d673e4b4fbd3bff43443155d0_211)] | | | [removed: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_199)] [added: [193](#i8a55793d673e4b4fbd3bff43443155d0_211)] | | |

| Item 12: | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i39a9ffb3d54a4bfdbacb5b3fe645889f_205)] [added: Matters](#i8a55793d673e4b4fbd3bff43443155d0_217)] | | | [removed: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_205)] [added: [193](#i8a55793d673e4b4fbd3bff43443155d0_217)] | | |

| Item 13: | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i39a9ffb3d54a4bfdbacb5b3fe645889f_208)] [added: Independence](#i8a55793d673e4b4fbd3bff43443155d0_220)] | | | [removed: [201](#i39a9ffb3d54a4bfdbacb5b3fe645889f_208)] [added: [194](#i8a55793d673e4b4fbd3bff43443155d0_220)] | | |

| Item 14: | | | [Principal Accountant Fees and [removed: Services](#i39a9ffb3d54a4bfdbacb5b3fe645889f_211)] [added: Services](#i8a55793d673e4b4fbd3bff43443155d0_223)] | | | [removed: [201](#i39a9ffb3d54a4bfdbacb5b3fe645889f_211)] [added: [194](#i8a55793d673e4b4fbd3bff43443155d0_223)] | | |

| Item 15: | | | [Exhibits and Financial Statement [removed: Schedules](#i39a9ffb3d54a4bfdbacb5b3fe645889f_217)] [added: Schedules](#i8a55793d673e4b4fbd3bff43443155d0_229)] | | | [removed: [202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_217)] [added: [195](#i8a55793d673e4b4fbd3bff43443155d0_229)] | | |

This information includes, but is not limited to: “Outlook for [removed: 2024”] [added: 2025”] of Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in Item 7, “Quantitative and Qualitative Disclosures About Market Risk” included in Item 7A, “Government Regulation” included in Item 1, and “Risk Factors” included in Item 1A.

*All statements addressing the future operating performance of CVS Health or any segment or any subsidiary and/or future events or developments, including, but not limited to, statements relating to the Company’s investment portfolio, operating results, cash flows and/or financial condition, statements relating to corporate strategy, statements relating to future revenue, operating income or adjusted operating income, earnings per share or adjusted earnings per share, Health Care Benefits segment business, sales results and/or trends, medical cost trends, medical membership, Medicare Part D membership, medical benefit ratios and/or operations, Health Services segment business, sales results and/or trends and/or operations, Pharmacy & Consumer Wellness segment business, sales results and/or trends and/or operations, incremental investment spending, interest expense, effective tax rate, weighted-average share count, cash flow from operations, net capital expenditures, cash available for debt repayment, statements related to possible, proposed, pending or completed acquisitions, joint ventures, investments or combinations that involve, among other things, the timing or likelihood of receipt of regulatory approvals, the timing of completion, integration synergies, net synergies and integration risks and other costs, [removed: including those related to CVS Health’s acquisitions of Oak Street Health, Inc. (“Oak Street Health”) and Signify Health, Inc. (“Signify Health”),] enterprise modernization, transformation, leverage ratio, cash available for enhancing shareholder value, inventory reduction, turn rate and/or loss rate, debt [removed: ratings,] [added: ratings and actions taken by ratings agencies,] the Company’s ability to attract or retain customers and clients, store development and/or relocations, new product development, and the impact of industry and regulatory developments, as well as statements expressing optimism or pessimism about future operating results or events, are forward-looking statements within the meaning of the Reform Act.*

| Item 9B: | | | [Other Information](#i8a55793d673e4b4fbd3bff43443155d0_202) | | | [192](#i8a55793d673e4b4fbd3bff43443155d0_202) | | |

| Item 11: | | | [Executive Compensation](#i8a55793d673e4b4fbd3bff43443155d0_214) | | | [193](#i8a55793d673e4b4fbd3bff43443155d0_214) | | |

| Item 16: | | | [Form 10-K Summary](#i8a55793d673e4b4fbd3bff43443155d0_232) | | | [200](#i8a55793d673e4b4fbd3bff43443155d0_232) | | |

| | | | [Signatures](#i8a55793d673e4b4fbd3bff43443155d0_235) | | | [201](#i8a55793d673e4b4fbd3bff43443155d0_235) | | |

| Item 9B: | | | [Other Information](#i39a9ffb3d54a4bfdbacb5b3fe645889f_190) | | | [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_190) | | |

| Item 11: | | | [Executive Compensation](#i39a9ffb3d54a4bfdbacb5b3fe645889f_202) | | | [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_202) | | |

| Item 16: | | | [Form 10-K Summary](#i39a9ffb3d54a4bfdbacb5b3fe645889f_220) | | | [206](#i39a9ffb3d54a4bfdbacb5b3fe645889f_220) | | |

| | | | [Signatures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_223) | | | [207](#i39a9ffb3d54a4bfdbacb5b3fe645889f_223) | | |

[removed: Securing] [added: Safeguarding] the Company’s business information, intellectual property, customer, patient and employee data and technology systems is essential for the continuity of its businesses, meeting applicable regulatory requirements and maintaining the trust of its stakeholders.

Cybersecurity is an important and integrated part of the Company’s enterprise risk management [removed: function that identifies, monitors and mitigates business, operational and legal risks.][added: strategy.]

To help protect the Company from a major cybersecurity incident that could have a material impact on operations or the Company’s financial results, the Company has implemented [removed: policies, programs] [added: a robust information security program] and [removed: controls, including] [added: has made] technology investments that focus on cybersecurity incident prevention, [removed: identification] [added: detection] and mitigation.

The steps the Company takes to reduce its vulnerability [removed: to cyberattacks] and to mitigate [added: the] impacts from cybersecurity incidents include, but are not limited to: [removed: establishing] [added: comprehensive] information security policies and standards, implementing [removed: information protection] [added: logical and technical controls through] processes and technologies, monitoring its information technology systems for cybersecurity threats, assessing cybersecurity risk profiles of key third-parties, implementing cybersecurity training and collaborating with public and private organizations on cyber threat information [removed: and best practices.]

The Company’s information technology systems and processes are [added: regularly] assessed [added: internally as well as] by independent third [removed: parties, as appropriate to their business requirements,] [added: parties] for compliance with the following standards: HIPAA; NIST 800-53; System and Organization Controls (“SOC”) 1; SOC 2 Type 2; HI-TRUST; Payment Card Industry Data Security Standards; and the National Association of Insurance Commissioners.

The Company annually purchases a cybersecurity risk insurance policy that [removed: would] [added: is expected to] help defray the costs associated with a covered cybersecurity incident if it occurred.

Although the Company did not experience a material cybersecurity incident during the year ended December 31, [removed: 2023,] [added: 2024, it did experience previously-disclosed impacts from] the [removed: scope and impact of any future] [added: Change Healthcare cybersecurity] incident [removed: cannot be predicted.][added: in February 2024.]

The Board is actively engaged in overseeing and reviewing the Company’s strategic direction and objectives, taking into account, among other considerations, the Company’s risk profile and related [removed: exposures, as part of this oversight the Board has delegated certain of these responsibilities to committees of the Board.][added: exposures.]

The Board has delegated the responsibility for the oversight of the Company’s cybersecurity risks [removed: program] to the [removed: Nominating and Corporate Governance] [added: Audit] Committee.

As part of this oversight, the [removed: Nominating and Corporate Governance] [added: Audit] Committee reviews the Company’s cybersecurity program periodically, and at least annually.

The Company’s CDDATO and CISO update the [removed: Nominating and Corporate Governance] [added: Audit] Committee periodically, and at least annually, and the full Board as needed, on the Company’s cybersecurity program, including [removed: with respect to] particular cybersecurity threats, incidents [removed: or] [added: and] new developments in the Company’s risk profile.

and best practices.

See the Company’s Form 10-Q for the three months ended March 31, 2024 for more information.

The scope and impact of any future direct or third-party cybersecurity incident cannot be predicted.

As part of this oversight the Board has delegated certain of these responsibilities to committees of the Board.

During 2023, the Board conducted a review of its overall committee structure, membership and responsibilities in an effort to enhance its oversight.

As part of this review, the Board has determined that it will shift the delegation of the oversight of the Company’s cybersecurity risks program to the Audit Committee effective March 2024.

The Health Services segment leases [removed: 204] [added: 239] primary care centers across [removed: 25] [added: 27] states, totaling approximately [removed: 1.9] [added: 2.2] million square feet.

As of December 31, [removed: 2023,] [added: 2024,] the Pharmacy & Consumer Wellness segment operated the following properties:

- [removed: Approximately 7,500] [added: More than 7,000] retail stores, of which approximately [removed: 5%] [added: 4%] were owned.

Net selling space for retail stores was approximately [removed: 74.6] [added: 72.6] million square feet as of December 31, [removed: 2023.][added: 2024.]

- Approximately [removed: 1,895] [added: 1,860] retail pharmacies within retail chains, as well as approximately 30 clinics in Target Corporation (“Target”) stores;

- Owned distribution centers and leased distribution facilities throughout the U.S. totaling approximately 10.1 million square feet; [removed: and]

- Branches for compounding, specialty infusion and enteral nutrition services throughout the [removed: U.S.][added: U.S.; and]

In connection with certain business dispositions completed between 1995 and 1997, the Company continues to guarantee lease obligations for [removed: 63] [added: 61] former stores.

The following sets forth the name, age and biographical information for each of the Registrant’s executive officers as of February [removed: 7, 2024.][added: 12, 2025.]

Clark*, age [removed: 59,] [added: 60,] 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.

Cowhey*, age [removed: 51,] [added: 52,] Executive Vice President and Chief Financial Officer of CVS Health Corporation since January 2024; [added: Senior Vice President and] Interim Chief Financial Officer of CVS Health Corporation from October 2023 through January 2024; Senior Vice President, Corporate Finance of CVS Health Corporation from September 2023 through October 2023; Senior Vice President, Capital Markets of CVS Health Corporation from February 2022 through September 2023; and Executive Vice President and Chief Financial Officer of Surgical Partners, a large independent operator of short-stay surgical facilities, from April 2018 through February 2022.

David Joyner*, age [removed: 59,] [added: 60, President and Chief] Executive [added: Officer of CVS Health Corporation since October 2024; Executive] Vice President of CVS Health Corporation and President of Pharmacy Services [removed: since] [added: from] January [removed: 2023;] [added: 2023 through October 2024;] Strategic Business Advisor to gWell, Inc., a wellness technology company, [removed: since] [added: from] July [removed: 2021;] [added: 2021 through September 2023;] Advisor to Podimetrics Inc., a health care company focused on the identification and treatment of diabetic foot ulcers [removed: since] [added: from] September [removed: 2020;] [added: 2020 through January 2023;] Advisory Council to the Rawls College of Business of Texas Tech University since July 2020; Executive Vice President – Sales and Account Services, CVS Caremark for CVS Health Corporation from March 2011 through December 2019.

Khichi*, age [removed: 56,] [added: 57,] Executive Vice President, Chief Policy Officer and General Counsel of CVS Health Corporation since February 2023; Executive Vice President, Corporate Development, Public Policy, Regulatory Affairs and General Counsel of Becton Dickinson Company (“BD”), a global medical technology company, from December 2017 through February 2023; [removed: and] Senior Vice President, General Counsel and Secretary of C.R. Bard, a medical technology company that was acquired from BD, from July 2014 through December 2017.

[removed: Lynch*,] [added: Shah*,] age [removed: 61,] [added: 45, Executive Vice] President and [removed: Chief Executive Officer] [added: Group President] of CVS Health Corporation since [removed: February 2021;] [added: November 2024;] Executive Vice President [added: and Chief Pharmacy Officer] of CVS Health Corporation from November [removed: 2018] [added: 2021] through [removed: January 2021;] [added: November 2024 and] President [added: or Co-President] of [removed: Aetna Inc.] [added: Retail] from January [removed: 2015] [added: 2022] through [removed: January 2021;] [added: November 2024; Executive Vice President, Specialty] and [removed: a director of] [added: Product Innovation,] CVS [removed: Health Corporation since] [added: Caremark from August 2018 through November 2021; Vice President - Specialty Pharmacy, CVS Caremark from] February [removed: 2021.][added: 2013 through July 2018.]

*Tilak Mandadi*, age [removed: 60,] [added: 61,] Executive Vice [removed: President] [added: President, Ventures] and Chief [added: Digital,] Data, [removed: Digital] [added: Analytics] and Technology Officer of CVS Health Corporation since July 2022; Chief Strategy Officer, MGM Resorts International from July 2021 through July 2022; Executive Vice President, Digital & Global Chief Technology Officer, Disney Parks, Experiences and Products from March 2013 through July 2021.

*Heidi B.

Capozzi*, age 55, Executive Vice President and Chief People Officer of CVS Health Corporation since September 2024; Executive Vice President and Global Chief People Officer of McDonald’s Corporation from April 2020 through August 2024; Senior Vice President and Chief Human Resources Officer of The Boeing Company from April 2016 through April 2020.

*Roger N.

Farah*, age 72, Executive Chair of the Board CVS Health Corporation since October 2024; Chair of the Board of CVS Health Corporation since May 2022; Director of CVS Health Corporation since November 2018; and Director of Aetna, Inc. from June 2007 through November 2018.

He also currently serves as a director of The Progressive Corporation, an auto insurance company, and formerly served as Chairman of the Board and a director of Tiffany & Co. until January 2021, and as a director of Metro Bank PLC until March 2020.

*Steven H.

Nelson*, age 66, Executive Vice President and President, Aetna of CVS Health Corporation since November 2024; Chief Executive Officer, ChenMed LLC (“ChenMed”), a health care provider focused on senior citizens, from February 2024 through August 2024; President, ChenMed, from August 2023 through January 2024; President, JenCare Senior Medical Center, a ChenMed company, from September 2022 through August 2023; Co-Chairman and Chief Executive Officer of Duly Health and Care, a large multispecialty independent provider group, from July 2020 through September 2022.

*Sreekanth K.

Chaguturu, M.D*., age 45, Executive Vice President and Chief Medical Officer of CVS Health Corporation since May 2022; Chief Medical Officer of CVS Caremark from September 2019 through May 2022; Chief Population Health Officer at Mass General Brigham, a non-profit hospital formerly known as Partners HealthCare, from August 2017 through August 2019; Vice President, Population Health Management at Mass General Brigham from June 2014 through August 2017.

Dr. Chaguturu is also an Attending Physician at Massachusetts General Hospital and an Instructor in Internal Medicine at Harvard Medical School from July 2007 to the present.

*Laurie P.

Havanec*, age 63, Executive Vice President and Chief People Officer of CVS Health Corporation since February 2021; Executive Vice President and Chief People Officer, Otis Worldwide Corporation, an elevator, escalator and moving walkway manufacturer, from October 2019 through January 2021; Corporate Vice President, Talent of United Technologies Corporation, a multinational manufacturing conglomerate, from April 2017 through October 2019; Vice President - Human Resources, Institution Businesses of Aetna Inc. from 2013 through March 2017.

Ms. Havanec is also a member of the board of directors of American Water Works Company, Inc., a publicly traded water and wastewater utility company.

*Brian A.

Kane*, age 51, Executive Vice President of CVS Health Corporation and President of Aetna since September 2023; Independent Strategic Advisor to private equity firms focused on health care services from June 2022 to September 2023; and Chief Financial Officer of Humana, Inc., a publicly traded health and well-being company, from June 2014 through May 2021.

*Karen S.

Shah*, age 44, Executive Vice President and Chief Pharmacy Officer of CVS Health Corporation since November 2021 and Co-President of Retail since January 2022; Executive Vice President, Specialty and Product Innovation, CVS Caremark

from August 2018 through November 2021; Vice President - Specialty Pharmacy, CVS Caremark from February 2013 through July 2018.

During [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] the quarterly cash dividend was [removed: $0.605, $0.55] [added: $0.665, $0.605] and [removed: $0.50] [added: $0.55] per share, respectively.

CVS Health Corporation has paid cash dividends every quarter since becoming a public [removed: company.][added: company and expects to maintain its quarterly dividend of $0.665 per share throughout 2025.]

As of [removed: January 31, 2024,] [added: February 5, 2025,] there were [removed: 23,098] [added: 21,818] registered holders of the registrant’s common stock according to the records maintained by the registrant’s transfer agent.

| In billions Authorization Date | | | Authorized | | | | | | Remaining as [removed: of December] [added: of December] 31, [removed: 2023] [added: 2024] | | |

| December 9, 2021 (“2021 Repurchase Program”) | | | 10.0 | | | | | | [removed: 4.5] [added: 1.5] | | |

During the years ended December 31, [added: 2024,] 2023 and 2022, the Company repurchased an aggregate of [added: 39.7 million shares of common stock for approximately $3.0 billion, an aggregate of] 22.8 million shares of common stock for approximately $2.0 billion and an aggregate of 34.1 million shares of common stock for approximately $3.5 billion, respectively, [removed: both] [added: each] pursuant to the 2021 Repurchase Program.

Upon payment of the $3.0 billion purchase price on January 4, 2024, the Company received a number of shares of CVS Health Corporation’s common stock equal to 85% of the $3.0 billion notional amount of the ASR or approximately 31.4 million [removed: shares at a price of $81.19 per share,] [added: shares,] which were placed into treasury stock in January 2024.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $2.0 billion fixed dollar ASR with Citibank, N.A. Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of [added: shares of CVS Health Corporation’s common stock equal to 80% of the $2.0 billion notional amount of the ASR or approximately 17.4 million shares, which were placed into treasury stock in January 2023.]

[added: Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of] shares of CVS Health Corporation’s common stock equal to 80% of the [removed: $2.0] [added: $1.5] billion notional amount of the ASR or approximately [removed: 17.4] [added: 11.6] million [removed: shares at a price of $92.19 per share,] [added: shares,] which were placed into treasury stock in January [removed: 2023.][added: 2022.]

The ASR was accounted for as an initial treasury stock transaction for [removed: $1.6] [added: $2.6] billion and a forward contract for $0.4 billion.

These shares were placed into treasury [added: stock] and the forward contract was reclassified from capital surplus to treasury stock in February 2023.

The following graph compares the cumulative total shareholder return on CVS Health Corporation’s common stock (assuming reinvestment of dividends) with the cumulative total return on the S&P 500 Index, the S&P 500 Food and Staples Retailing Industry Group Index and the S&P 500 Healthcare Sector Group Index from December 31, [removed: 2018] [added: 2019] through December 31, [removed: 2023.][added: 2024.]

The graph assumes a $100 investment in shares of CVS Health Corporation’s common stock on December 31, [removed: 2018.][added: 2019.]

[removed: ][added: ]

| | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | |

| S&P 500 Food & Staples Retailing Group Index (2) | | | 100 | | | | | | [removed: 127] [added: 116] | | | | | | [removed: 148] [added: 146] | | | | | | [removed: 185] [added: 131] | | | | | | [removed: 166] [added: 151] | | | | | | [removed: 192] [added: 204] | | |

| S&P 500 Health Care Group Index (1) (3) | | | 100 | | | | | | [removed: 121] [added: 113] | | | | | | [removed: 137] [added: 143] | | | | | | [removed: 173] [added: 140] | | | | | | [removed: 170] [added: 143] | | | | | | [removed: 173] [added: 147] | | |

(2)Includes [removed: eight] [added: 8] companies (COST, DG, DLTR, KR, SYY, TGT, WBA, WMT).

(3)Includes [removed: 64] [added: 61] companies.

In March 2024, the Company received approximately 8.3 million shares of CVS Health Corporation’s common stock, representing the remaining 15% of the $3.0 billion notional amount of the ASR, thereby concluding the ASR.

These shares were placed into treasury and the forward contract was reclassified from capital surplus to treasury stock in March 2024.

The ASR was accounted for as an

initial treasury stock transaction for $1.6 billion and a forward contract for $0.4 billion.

The forward contract was classified as an equity instrument and was recorded within capital surplus.

| CVS Health Corporation | | | $ | 100 | | | | | $ | 95 | | | | | $ | 147 | | | | | $ | 136 | | | | | $ | 119 | | | | | $ | 70 | |

| S&P 500 (1) | | | 100 | | | | | | 118 | | | | | | 152 | | | | | | 125 | | | | | | 157 | | | | | | 197 | | |

In December 2023, the Board authorized an increase of approximately 10% in the quarterly cash dividend to $0.665 per share effective in 2024.

During the year ended December 31, 2021, the Company did not repurchase any shares of common stock.

At the conclusion of the ASR, the Company may receive additional shares representing the remaining 15% of the $3.0 billion notional amount.

The ultimate number of shares the Company may receive will depend on the daily volume-weighted average price of the Company’s stock over an averaging period, less a discount.

It is also possible, depending on such weighted average price, that the Company will have an obligation to Morgan Stanley which, at the Company’s option, could be settled in additional cash or by issuing shares.

Under the terms of the ASR, the maximum number of shares that could be delivered to the Company is 73.9 million.

Upon payment of the $1.5 billion purchase price on January 4, 2022, the Company received a number of shares of CVS Health Corporation’s common stock equal to 80% of the $1.5 billion notional amount of the ASR or approximately 11.6 million shares at a price of $103.34 per share, which were placed into treasury stock in January 2022.

| CVS Health Corporation | | | $ | 100 | | | | | $ | 117 | | | | | $ | 111 | | | | | $ | 172 | | | | | $ | 159 | | | | | $ | 139 | |

| S&P 500 (1) | | | 100 | | | | | | 131 | | | | | | 156 | | | | | | 200 | | | | | | 164 | | | | | | 207 | | |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)] [added: 2024, 2023 and 2022](#i8a55793d673e4b4fbd3bff43443155d0_103)] | | | [removed: [109](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)] [added: [104](#i8a55793d673e4b4fbd3bff43443155d0_103)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)] [added: 2024, 2023 and 2022](#i8a55793d673e4b4fbd3bff43443155d0_106)] | | | [removed: [110](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)] [added: [105](#i8a55793d673e4b4fbd3bff43443155d0_106)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)] [added: 2024 and 2023](#i8a55793d673e4b4fbd3bff43443155d0_109)] | | | [removed: [111](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)] [added: [106](#i8a55793d673e4b4fbd3bff43443155d0_109)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)] [added: 2024, 2023 and 2022](#i8a55793d673e4b4fbd3bff43443155d0_112)] | | | [removed: [112](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)] [added: [107](#i8a55793d673e4b4fbd3bff43443155d0_112)] | | |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)] [added: 2024, 2023 and 2022](#i8a55793d673e4b4fbd3bff43443155d0_115)] | | | [removed: [114](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)] [added: [109](#i8a55793d673e4b4fbd3bff43443155d0_115)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i39a9ffb3d54a4bfdbacb5b3fe645889f_118)] [added: Statements](#i8a55793d673e4b4fbd3bff43443155d0_118)] | | | [removed: [115](#i39a9ffb3d54a4bfdbacb5b3fe645889f_118)] [added: [110](#i8a55793d673e4b4fbd3bff43443155d0_118)] | | |

| [Reports of Independent Registered Public Accounting [removed: Firm](#i39a9ffb3d54a4bfdbacb5b3fe645889f_178)] [added: Firm](#i8a55793d673e4b4fbd3bff43443155d0_190)] (Public Company Accounting Oversight Board ID: 42) | | | [removed: [196](#i39a9ffb3d54a4bfdbacb5b3fe645889f_178)] [added: [189](#i8a55793d673e4b4fbd3bff43443155d0_190)] | | |

[Index to Consolidated Financial [removed: Statements](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)][added: Statements](#i8a55793d673e4b4fbd3bff43443155d0_100)]

| In millions, except per share amounts | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Products | | | $ | [removed: 245,138] [added: 231,521] | | | | | $ | [removed: 226,616] [added: 245,138] | | | | | $ | [removed: 203,738] [added: 226,616] | |

| Premiums | | | [removed: 99,192] [added: 122,896] | | | | | | [removed: 85,330] [added: 99,192] | | | | | | [removed: 76,132] [added: 85,330] | | |

| Services | | | [removed: 12,293] [added: 16,239] | | | | | | [removed: 9,683] [added: 12,293] | | | | | | [removed: 11,042] [added: 9,683] | | |

| Net investment income | | | [removed: 1,153] [added: 2,153] | | | | | | [removed: 838] [added: 1,153] | | | | | | [removed: 1,199] [added: 838] | | |

| Total revenues | | | [removed: 357,776] [added: 372,809] | | | | | | [removed: 322,467] [added: 357,776] | | | | | | [removed: 292,111] [added: 322,467] | | |

| Cost of products sold | | | [removed: 217,098] [added: 206,287] | | | | | | [removed: 196,892] [added: 217,098] | | | | | | [removed: 175,803] [added: 196,892] | | |

| Health care costs | | | [removed: 86,247] [added: 115,121] | | | | | | [removed: 71,073] [added: 86,247] | | | | | | [removed: 64,188] [added: 71,073] | | |

| Restructuring charges [added: (7)] | | | [removed: 507] | | | | | | [removed: —] | | | | | | [removed: —] | | | [added: | | | | | | | | | 507 | | |]

| Opioid litigation charges | | | [removed: —] [added: 100] | | | | | | [removed: 5,803] [added: —] | | | | | | [removed: —] [added: 5,803] | | |

| Loss on assets held for sale | | | [removed: 349] [added: —] | | | | | | [removed: 2,533] [added: 349] | | | | | | [removed: —] [added: 2,533] | | |

| Operating expenses | | | [removed: 39,832] [added: 41,606] | | | | | | [removed: 38,212] [added: 39,832] | | | | | | [removed: 37,021] [added: 38,212] | | |

| Total operating costs | | | [removed: 344,033] [added: 364,293] | | | | | | [removed: 314,513] [added: 344,033] | | | | | | [removed: 278,801] [added: 314,513] | | |

| Operating income | | | [removed: 13,743] [added: 8,516] | | | | | | [removed: 7,954] [added: 13,743] | | | | | | [removed: 13,310] [added: 7,954] | | |

| Interest expense | | | [removed: 2,658] [added: 2,958] | | | | | | [removed: 2,287] [added: 2,658] | | | | | | [removed: 2,503] [added: 2,287] | | |

[removed: | Loss] [added: *Gain] on [removed: early extinguishment] [added: Early Extinguishment] of [removed: debt | | | — | | | | | | — | | | | | | 452 | | |][added: Debt*]

| Other income | | | [removed: (88)] [added: (99)] | | | | | | [removed: (169)] [added: (88)] | | | | | | [removed: (182)] [added: (169)] | | |

| Income before income tax provision | | | [removed: 11,173] [added: 6,148] | | | | | | [removed: 5,836] [added: 11,173] | | | | | | [removed: 10,537] [added: 5,836] | | |

| Income tax provision | | | [removed: 2,805] [added: 1,562] | | | | | | [removed: 1,509] [added: 2,805] | | | | | | [removed: 2,548] [added: 1,509] | | |

| Net income | | | [removed: 8,368] [added: 4,586] | | | | | | [removed: 4,327] [added: 8,368] | | | | | | [removed: 7,989] [added: 4,327] | | |

| Net (income) loss attributable to noncontrolling interests | | | [removed: (24)] [added: 28] | | | | | | [removed: (16)] [added: (24)] | | | | | | [removed: 12] [added: (16)] | | |

| Net income attributable to CVS Health | | | $ | [removed: 8,344] [added: 4,614] | | | | | $ | [removed: 4,311] [added: 8,344] | | | | | $ | [removed: 8,001] [added: 4,311] | |

| Net income [removed: per share] attributable to CVS [removed: Health:] [added: Health] | | | [added: $] | [added: 4,614] | | | | | [added: $] | [added: 8,344] | | | | | [added: $] | [added: 4,311] | |

| Basic | | | $ | [removed: 6.49] [added: 3.67] | | | | | $ | [removed: 3.29] [added: 6.49] | | | | | $ | [removed: 6.07] [added: 3.29] | |

| Diluted | | | [removed: 6.47] [added: $] | [added: 3.66] | | | | | [removed: 3.26] [added: $] | [added: 6.47] | | | | | [removed: 6.02] [added: $] | [added: 3.26] | |

| Basic | | | [removed: $] [added: 1,259] | [removed: 1,285] | | | | | [removed: 1,312] [added: 1,285] | | | | | | [removed: $] [added: 1,312] | [removed: 1,319] | |

| Diluted | | | [removed: 1,290] [added: 1,262] | | | | | | [removed: 1,323] [added: 1,290] | | | | | | [removed: 1,329] [added: 1,323] | | |

| In millions | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Net income | | | $ | [removed: 8,368] [added: 4,586] | | | | | $ | [removed: 4,327] [added: 8,368] | | | | | $ | [removed: 7,989] [added: 4,327] | |

| Net unrealized investment gains (losses) | | | [removed: 1,090] [added: 30] | | | | | | [removed: (2,317)] [added: 1,090] | | | | | | [removed: (556)] [added: (2,317)] | | |

| Change in discount rate on [added: long-duration] insurance reserves | | | [removed: (67)] [added: 113] | | | | | | [removed: 870] [added: (67)] | | | | | | [removed: 255] [added: 870] | | |