CVS HEALTH Corp
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 5, 2026
CVS$83.85+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000064803-26-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0000064803-26-000098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 157 current paragraphs.
85 unchanged; 36 reworded; 26 added; 4 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 12 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
•Operating expenses decreased $166 million, or 1.5%, in the three months ended June 30, 2026 compared to the prior year primarily due to the absence of $833 million in legacy litigation charges recorded in the prior year, partially offset by continued business investments and operating expenses to support increased volume from the Rite Aid asset acquisitions.
Current report
•Operating income increased $2.3 billion, or 97.5%, in the three months ended June 30, 2026 compared to the prior year primarily due to improved operating performance across all operating segments, as well as the absence of $833 million in legacy litigation charges recorded in the prior year.
Current report
•Total revenues increased $13.0 billion, or 6.7%, in the six months ended June 30, 2026 compared to the prior year driven by revenue growth across all operating segments.
Current report
Operating income
Current report
Income tax provision
Current report
•The environment for the federal 340B drug pricing program remains dynamic and may continue to impact the Company’s Health Services segment.
Current report
•Operating expenses increased $139 million, or 3.1%, in the three months ended June 30, 2026 compared to the prior year primarily driven by increased business investments.
Current report
Medical Benefit Ratio
Current report
•The MBR decreased to 86.0% in the six months ended June 30, 2026 compared to 88.6% in the prior year primarily driven by improved underlying performance in the Government business and the absence of $902 million of premium deficiency reserves recorded as health care costs in the prior year, partially offset by lower favorable prior period development.
Current report
•Operating expenses increased $226 million, or 2.5%, in the six months ended June 30, 2026 compared to the prior year primarily driven by increased business investments.
Current report
•Operating expenses decreased $236 million, or 20.2%, in the three months ended June 30, 2026 compared to the prior year primarily driven by the absence of a $291 million legacy litigation charge recorded in the prior year.
Current report
Company’s health care delivery business. These increases were partially offset by continued pharmacy client price improvements.
Current report
•Total revenues increased $10.1 billion, or 11.3%, in the six months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Current report
•Operating expenses decreased $440 million, or 19.6%, in the six months ended June 30, 2026 compared to the prior year primarily due to the absence of the $291 million legacy litigation charge and $288 million in pre-tax losses on the wind down and sale of Accountable Care assets, both recorded in the prior year.
Current report
•Adjusted operating income increased slightly in the six months ended June 30, 2026 compared to the prior year primarily driven by improved purchasing economics, pharmacy drug mix and modest improvement in the Company’s health care delivery business. These increases were largely offset by continued pharmacy client price improvements.
Current report
Pharmacy claims processed
Current report
•The Company’s pharmacy claims processed remained consistent on a 30-day equivalent basis in the six months ended June 30, 2026 compared to the prior year.
Current report
•Adjusted operating income increased $137 million, or 10.2%, in the three months ended June 30, 2026 compared to the prior year primarily driven by core pharmacy strength and contributions from the Company’s Rite Aid asset acquisitions. These increases were partially offset by continued business investments and the impact of consumer dynamics.
Current report
•Front store same store sales increased 1.1% in the six months ended June 30, 2026 compared to the prior year.
Current report
•Operating expenses decreased $347 million, or 3.3%, in the six months ended June 30, 2026 compared to the prior year primarily due to the absence of $929 million in legacy litigation charges recorded in the prior year, partially offset by continued business investments and operating expenses to support increased volume from the Rite Aid asset acquisitions.
Current report
•Adjusted operating income increased slightly in the six months ended June 30, 2026 compared to the prior year primarily driven by core pharmacy strength and contributions from the Company’s Rite Aid asset acquisitions. These increases were largely offset by continued business investments and the impact of consumer dynamics.
Current report
Prescriptions filled
Current report
•Total revenues increased $51 million, or 53.1%, in the three months ended June 30, 2026 compared to the prior year driven by an increase in net investment income, reflecting increased income from private equity and equity fund investments and higher average fixed income investments in the three months ended June 30, 2026.
Current report
•Adjusted operating loss increased $64 million, or 15.5%, in the three months ended June 30, 2026 compared to the prior year primarily driven by increased business investments.
Current report
•Total revenues increased $44 million, or 19.2%, in the six months ended June 30, 2026 compared to the prior year driven by an increase in net investment income, reflecting increased income from private equity and equity fund investments in the six months ended June 30, 2026.
Current report
Adjusted operating loss
Removed paragraphs (4)
Previous report
•Operating expenses remained relatively consistent in the three months ended March 31, 2026 compared to the prior year.
Previous report
•Operating expenses decreased $204 million, or 19.0%, in the three months ended March 31, 2026 compared to the prior year. The decrease was primarily driven by the absence of the $247 million pre-tax loss on the wind down and sale of Accountable Care assets recorded in the prior year.
Previous report
•Adjusted operating income decreased $116 million, or 8.8%, in the three months ended March 31, 2026 compared to the prior year primarily driven by pharmacy reimbursement pressure, continued business investments, lower contributions from seasonal illnesses and greater weather disruption compared to the prior year. These decreases were partially offset by increased prescription volume and contributions from the Company’s Rite Aid asset acquisitions.
Previous report
•Total revenues remained relatively consistent in the three months ended March 31, 2026 compared to the prior year.
Reworded paragraphs (36)
Previous wording
CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading health solutions company simplifying health care one person, one family and one community at a time. As of March 31, 2026, the Company had approximately 9,000 retail locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 88 million plan members and expanding specialty pharmacy solutions. The Company also serves an estimated more than 37 million people through a broad range of health insurance products and related services. The Company is creating new sources of value through its integrated model, allowing it to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.
Current wording
CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading health solutions company simplifying health care one person, one family and one community at a time. As of June 30, 2026, the Company had approximately 9,000 retail locations, more than 1,000 walk-in and primary care medical clinics and a leading pharmacy benefits manager with approximately 87 million plan members and expanding specialty pharmacy solutions. The Company also serves an estimated 37 million people through a broad range of health insurance products and related services. The Company is creating new sources of value through its integrated model, allowing it to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.
Previous wording
The Health Services segment provides a full range of pharmacy benefit management (“PBM”) solutions through its CVS Caremark® operations and delivers health care services in its medical clinics, virtually, and in the home. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants and provides various administrative, management and reporting services to pharmaceutical manufacturers. The segment also works directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products through its Cordavis TM subsidiary. The Health Services segment’s health care delivery assets include Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, and Oak Street Health, Inc. (“Oak Street Health”), a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.
Current wording
The Health Services segment provides a full range of pharmacy benefit management (“PBM”) solutions through its CVS Caremark® operations and delivers health care services in its medical clinics, virtually, and in the home. PBM solutions include plan design offerings and administration, formulary management, retail pharmacy network management services, and specialty and mail order pharmacy services. In addition, the Company provides clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”). The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants and provides various administrative, management and reporting services to pharmaceutical manufacturers. The segment also works directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products through its Cordavis® subsidiary. The Health Services segment’s health care delivery assets include Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, and Oak Street Health, Inc. (“Oak Street Health”), a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.
Previous wording
The following discussion explains the material changes in the Company’s operating results for the three months ended March 31, 2026 and 2025, and the significant developments affecting the Company’s financial condition since December 31, 2025. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the 2025 Form 10-K.
Current wording
The following discussion explains the material changes in the Company’s operating results for the three and six months ended June 30, 2026 and 2025, and the significant developments affecting the Company’s financial condition since December 31, 2025. We strongly recommend that you read our audited consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are included in the 2025 Form 10-K.
Previous wording
•Total revenues increased $5.8 billion, or 6.2%, in the three months ended March 31, 2026 compared to the prior year primarily driven by revenue growth across all operating segments.
Current wording
•Total revenues increased $7.2 billion, or 7.3%, in the three months ended June 30, 2026 compared to the prior year driven by revenue growth across all operating segments.
Previous wording
•The effective income tax rate was 24.9% for the three months ended March 31, 2026 compared to 31.9% for the three months ended March 31, 2025. The change in the effective income tax rate was primarily due to the absence of the impact of the non-deductible legacy litigation charge recorded in the prior year.
Current wording
•The effective income tax rate was 24.7% for the three months ended June 30, 2026 compared to 38.5% for the three months ended June 30, 2025. The change in the effective income tax rate was primarily due to the absence of the impact of the non-deductible legacy litigation charges recorded in the prior year.
Previous wording
•Operating expenses remained relatively consistent in the three months ended March 31, 2026 compared to the prior year primarily due to the absence of a $387 million legacy litigation charge and a $247 million pre-tax loss on the wind down and sale of Accountable Care assets, both recorded in the prior year, largely offset by continued business investments, operating expenses to support increased volume from the Rite Aid asset acquisitions and the retroactive effect of a change in a state law related to non-income taxes.
Current wording
•Operating expenses decreased $244 million, or 1.1%, in the six months ended June 30, 2026 compared to the prior year primarily due to the absence of $1.2 billion in legacy litigation charges and $288 million in pre-tax losses on the wind down and sale of Accountable Care assets, both recorded in the prior year, partially offset by continued business investments, operating expenses to support increased volume from the Rite Aid asset acquisitions and the retroactive effect of a change in a state law related to non-income taxes.
Previous wording
•Operating income increased $1.3 billion, or 38.7%, in the three months ended March 31, 2026 compared to the prior year primarily due to improved operating performance in the Health Care Benefits segment, as well as the absence of the $387 million legacy litigation charge and the $247 million pre-tax loss on the wind down and sale of Accountable Care assets, both recorded in the prior year.
Current wording
•Operating income increased $3.6 billion, or 63.0%, in the six months ended June 30, 2026 compared to the prior year primarily due to improved operating performance in the Health Care Benefits segment, as well as the absence of the $1.2 billion in legacy litigation charges and the $288 million in pre-tax losses on the wind down and sale of Accountable Care assets, both recorded in the prior year.
Previous wording
•Utilization persisted at elevated levels in the first quarter of 2026. Although the level of utilization is difficult to accurately predict, utilization beyond current elevated levels may pressure the Company’s Health Care Benefits segment and its health care delivery assets in its Health Services segment in 2026.
Current wording
•Utilization persisted at elevated levels in the second quarter of 2026. Although the level of utilization is difficult to accurately predict, utilization beyond current elevated levels may pressure the Company’s Health Care Benefits segment and its health care delivery assets in its Health Services segment in 2026.
Previous wording
(1)Total revenues of the Health Services segment include approximately $3.8 billion and $3.7 billion of retail co-payments for the three months ended March 31, 2026 and 2025, respectively.
Current wording
(1)Total revenues of the Health Services segment include approximately $2.8 billion and $2.7 billion of retail co-payments for the three months ended June 30, 2026 and 2025, respectively, and $6.6 billion and $6.4 billion of retail co-payments for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
(2)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in net investment income within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Accordingly, the Company believes excluding net realized capital gains and losses enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends.
Current wording
(2)The Company’s net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of insurance liabilities. Net realized capital gains and losses are reflected in net investment income (loss) within each segment. These capital gains and losses are the result of investment decisions, market conditions and other economic developments that are unrelated to the performance of the Company’s business, and the amount and timing of these capital gains and losses do not directly relate to the underwriting of the Company’s insurance products, the services performed for the Company’s customers or the sale of the Company’s products or services. Accordingly, the Company believes excluding net realized capital gains and losses enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance and to analyze underlying business performance and trends.
Previous wording
(3)During the three months ended March 31, 2026 and 2025, the acquisition-related integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.
Current wording
(3)During the three and six months ended June 30, 2026 and 2025, the acquisition-related integration costs relate to the acquisitions of Signify Health and Oak Street Health. The acquisition-related integration costs are reflected in operating expenses within the Corporate/Other segment.
Previous wording
(4)During the three months ended March 31, 2025, the Company recorded a legacy litigation charge related to a court decision associated with its past business practices. The legacy litigation charge was reflected in operating expenses within the Pharmacy & Consumer Wellness segment.
Current wording
(4)During the three and six months ended June 30, 2025, the Company recorded legacy litigation charges related to two court decisions associated with its past business practices. The legacy litigation charges were reflected in operating expenses within the Pharmacy & Consumer Wellness and Health Services segments.
Previous wording
(5)During the three months ended March 31, 2025, the loss on the wind down and sale of Accountable Care assets represents the pre-tax loss on the divestiture of the Company’s Medicare Shared Savings Program (“MSSP”) operations, as well as costs incurred in connection with the wind down of the Company’s ACO REACH operations. The loss on Accountable Care assets was reflected in operating expenses within the Health Services segment.
Current wording
(5)During the three and six months ended June 30, 2025, the loss on the wind down and sale of Accountable Care assets represents the pre-tax loss on the divestiture of the Company’s Medicare Shared Savings Program (“MSSP”) operations, as well as costs incurred in connection with the wind down of the Company’s ACO REACH operations. The loss on Accountable Care assets was reflected in operating expenses within the Health Services segment.
Previous wording
(6)During the three months ended March 31, 2025, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company’s evaluation of corporate office real estate space. The office real estate optimization charges were reflected in operating expenses within each segment.
Current wording
(6)During the three and six months ended June 30, 2025, the office real estate optimization charges primarily relate to the abandonment of leased real estate and the related right-of-use assets and property and equipment in connection with the Company’s evaluation of corporate office real estate space. The office real estate optimization charges were reflected in operating expenses within each segment.
Previous wording
•Total revenues increased $1.2 billion, or 3.3%, in the three months ended March 31, 2026 compared to the prior year primarily driven by an increase in the Government business, partially offset by a decline as a result of the Company’s exit of the individual exchange business in 2026.
Current wording
•Total revenues increased $1.3 billion, or 3.5%, in the three months ended June 30, 2026 compared to the prior year primarily driven by an increase in the Government business, partially offset by a decline as a result of the Company’s exit of the individual exchange business in 2026.
Previous wording
•The MBR decreased to 84.6% in the three months ended March 31, 2026 compared to 87.3% in the prior year primarily driven by improved underlying performance in the Government business and the absence of the $448 million premium deficiency reserve recorded within the individual exchange product line in the prior year, partially offset by lower favorable prior-year development.
Current wording
•The MBR decreased to 87.4% in the three months ended June 30, 2026 compared to 89.9% in the prior year primarily driven by improved underlying performance in the Government business and the absence of a $471 million premium deficiency reserve recorded within the Group Medicare Advantage product line in the prior year.
Previous wording
•Adjusted operating income increased $1.0 billion, or 52.6%, for the three months ended March 31, 2026 compared to the prior year primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserve recorded in the prior year, partially offset by lower favorable prior-year development.
Current wording
•Adjusted operating income increased $2.2 billion, or 65.6%, in the six months ended June 30, 2026 compared to the prior year primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserves recorded in the prior year, partially offset by lower favorable prior period development.
Previous wording
•Medical membership as of March 31, 2026 of 26.0 million decreased approximately 600 thousand members compared with December 31, 2025 reflecting the Company’s exit of the individual exchange business in 2026, partially offset by an increase in Commercial ASC membership.
Current wording
•Medical membership as of June 30, 2026 of 26.0 million decreased approximately 700,000 members compared with June 30, 2025 reflecting the Company’s exit of the individual exchange business in 2026, partially offset by an increase in Commercial ASC membership.
Previous wording
•Total revenues increased $4.8 billion, or 11.0%, in the three months ended March 31, 2026 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Current wording
•Total revenues increased $5.3 billion, or 11.5%, in the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix and brand inflation, partially offset by continued pharmacy client price improvements.
Previous wording
•Adjusted operating income decreased $114 million, or 7.1%, in the three months ended March 31, 2026 compared to the prior year primarily driven by continued pharmacy client price improvements, partially offset by improved purchasing economics and pharmacy drug mix.
Current wording
•Adjusted operating income increased $158 million, or 10.0%, in the three months ended June 30, 2026 compared to the prior year primarily driven by improved purchasing economics, pharmacy drug mix and modest improvement in the
Previous wording
•Pharmacy claims processed remained relatively consistent on a 30-day equivalent basis in the three months ended March 31, 2026 compared to the prior year.
Current wording
•Pharmacy claims processed remained consistent on a 30-day equivalent basis in the three months ended June 30, 2026 compared to the prior year.
Previous wording
•Total revenues remained relatively consistent in the three months ended March 31, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Company’s Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Current wording
•Total revenues increased slightly in the three months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Company’s Rite Aid asset acquisitions which were completed during the third quarter of 2025, and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Previous wording
•Pharmacy same store sales increased 3.1% in the three months ended March 31, 2026 compared to the prior year. The increase was primarily driven by pharmacy drug mix, the 6.8% increase in pharmacy same store prescription volume on a 30-day equivalent basis and brand inflation, partially offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Current wording
•Pharmacy same store sales increased 2.9% in the three months ended June 30, 2026 compared to the prior year. The increase was primarily driven by pharmacy drug mix, the 7.0% increase in pharmacy same store prescription volume on a 30-day equivalent basis and brand inflation. These increases were partially offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Previous wording
•Front store same store sales increased 1.2% in the three months ended March 31, 2026 compared to the prior year.
Current wording
•Front store same store sales increased 1.0% in the three months ended June 30, 2026 compared to the prior year.
Previous wording
•Operating expenses decreased $179 million, or 3.4%, in the three months ended March 31, 2026 compared to the prior year primarily due to the absence of the $387 million legacy litigation charge recorded in the prior year, partially offset by continued business investments and operating expenses to support increased volume from the Rite Aid asset acquisitions.
Current wording
•Operating expenses decreased $168 million, or 3.2%, in the three months ended June 30, 2026 compared to the prior year primarily due to the absence of a $542 million legacy litigation charge recorded in the prior year, partially offset by continued business investments and operating expenses to support increased volume from the Rite Aid asset acquisitions.
Previous wording
•Prescriptions filled increased 3.6% on a 30-day equivalent basis in the three months ended March 31, 2026 compared to the prior year primarily driven by incremental volume resulting from the Company’s Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare in September 2025.
Current wording
•Prescriptions filled increased 4.3% on a 30-day equivalent basis in the three months ended June 30, 2026 compared to the prior year primarily driven by incremental volume resulting from the Company’s Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare in September 2025.
Previous wording
•Adjusted operating loss increased $247 million, or 74.8%, in the three months ended March 31, 2026 compared to the prior year primarily driven by the retroactive effect of a change in a state law related to non-income taxes and increased business investments.
Current wording
•Adjusted operating loss increased $311 million, or 41.9%, in the six months ended June 30, 2026 compared to the prior year primarily driven by the retroactive effect of a change in a state law related to non-income taxes and increased business investments.
Previous wording
The Company maintains a level of liquidity sufficient to allow it to meet its cash needs in the short-term. Over the long term, the Company manages its cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. The Company continuously assesses its regulatory capital requirements, working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions. The Company believes its operating cash flows, commercial paper program, credit facilities, as well as any potential future borrowings, will be sufficient to fund these future payments and long-term initiatives. As of March 31, 2026, the Company had approximately $9.5 billion in cash and cash equivalents, approximately $2.2 billion of which was held by the parent company or nonrestricted subsidiaries.
Current wording
The Company maintains a level of liquidity sufficient to allow it to meet its cash needs in the short-term. Over the long term, the Company manages its cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. The Company continuously assesses its regulatory capital requirements, working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions. The Company believes its operating cash flows, commercial paper program, credit facilities, as well as any potential future borrowings, will be sufficient to fund these future payments and long-term initiatives. As of June 30, 2026, the Company had approximately $11.3 billion in cash and cash equivalents, approximately $2.7 billion of which was held by the parent company or nonrestricted subsidiaries.
Previous wording
The net change in cash, cash equivalents and restricted cash during the three months ended March 31, 2026 and 2025 was as follows:
Current wording
The net change in cash, cash equivalents and restricted cash during the six months ended June 30, 2026 and 2025 was as follows:
Previous wording
•Net cash provided by operating activities decreased by $307 million in the three months ended March 31, 2026 compared to the prior year. The decrease was primarily due to the timing of payments and receipts.
Current wording
•Net cash provided by operating activities increased by $4.1 billion in the six months ended June 30, 2026 compared to the prior year. The increase was primarily due to the timing of payments and receipts and improved operating performance in the Health Care Benefits segment in the six months ended June 30, 2026.
Previous wording
•Net cash used in investing activities remained relatively consistent in the three months ended March 31, 2026 compared to the prior year.
Current wording
•Net cash used in investing activities increased by $972 million in the six months ended June 30, 2026 compared to the prior year. The increase was primarily due to higher net purchases of investments in the six months ended June 30, 2026.
Previous wording
•Net cash used in financing activities remained relatively consistent in the three months ended March 31, 2026 compared to the prior year as repayments of commercial paper in the prior year were largely offset by higher repayments of long-term debt in the three months ended March 31, 2026.
Current wording
•Net cash used in financing activities increased by $3.5 billion in the six months ended June 30, 2026 compared to the prior year primarily due to higher repayments of long-term debt during the six months ended June 30, 2026 compared to the prior year and proceeds from commercial paper borrowings in the six months ended June 30, 2025.
Previous wording
A subsidiary of the Company is a member of the FHLBB. As a member, the subsidiary has the ability to obtain cash advances, subject to certain minimum collateral requirements. The maximum borrowing capacity available from the FHLBB as of March 31, 2026 was approximately $1.4 billion. As of March 31, 2026, there were no outstanding advances from the FHLBB.
Current wording
A subsidiary of the Company is a member of the FHLBB. As a member, the subsidiary has the ability to obtain cash advances, subject to certain minimum collateral requirements. The maximum borrowing capacity available from the FHLBB as of June 30, 2026 was approximately $1.3 billion. As of June 30, 2026, there were no outstanding advances from the FHLBB.
Previous wording
As of March 31, 2026, the Company’s long-term debt was rated “BBB” by Fitch Ratings, Inc. (“Fitch”), “Baa3” by Moody’s Ratings (“Moody’s”) and “BBB” by Standard & Poor’s Financial Services LLC (“S&P”), and its commercial paper program was rated “F2” by Fitch, “P-3” by Moody’s and “A-2” by S&P. The outlook on the Company’s long-term debt is “Negative” by both Fitch and S&P and “Stable” by Moody’s. In assessing the Company’s credit strength, the Company believes that Fitch, Moody’s and S&P considered, among other things, the Company’s capital structure and financial policies, as well as its consolidated balance sheet, its historical acquisition activity and other financial information, including the Company’s expectations for future earnings and cash flows. Although the Company currently believes its long-term debt ratings will remain investment grade, it cannot predict the future actions of Moody’s, S&P and/or Fitch. The Company’s debt ratings have a direct impact on its future borrowing costs, access to capital markets and new store operating lease costs.
Current wording
As of June 30, 2026, the Company’s long-term debt was rated “BBB” by Fitch Ratings, Inc. (“Fitch”), “Baa3” by Moody’s Ratings (“Moody’s”) and “BBB” by Standard & Poor’s Financial Services LLC (“S&P”), and its commercial paper program was rated “F2” by Fitch, “P-3” by Moody’s and “A-2” by S&P. The outlook on the Company’s long-term debt is “Negative” by Fitch and “Stable” by Moody’s. In May 2026, S&P changed its outlook on the Company’s long-term debt from “Negative” to “Stable”. In assessing the Company’s credit strength, the Company believes that Fitch, Moody’s and S&P considered, among other things, the Company’s capital structure and financial policies, as well as its consolidated balance sheet, its historical acquisition activity and other financial information, including the Company’s expectations for future earnings and cash flows. Although the Company currently believes its long-term debt ratings will remain investment grade, it cannot predict the future actions of Moody’s, S&P and/or Fitch. The Company’s debt ratings have a direct impact on its future borrowing costs, access to capital markets and new store operating lease costs.
Previous wording
During the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares of its common stock.
Current wording
During the six months ended June 30, 2026 and 2025, the Company did not repurchase any shares of its common stock.
Previous wording
The quarterly cash dividend declared by the Board was $0.665 per share in both the three months ended March 31, 2026 and 2025. CVS Health Corporation has paid cash dividends every quarter since becoming a public company. Future dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Board.
Current wording
The quarterly cash dividend declared by the Board was $0.665 per share in both the three months ended June 30, 2026 and 2025. Cash dividends declared by the Board were $1.33 per share in both the six months ended June 30, 2026 and 2025. CVS Health Corporation has paid cash dividends every quarter since becoming a public company. Future dividend payments will depend on the Company’s earnings, capital requirements, financial condition and other factors considered relevant by the Board.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
•Please see “Segment Analysis” later in this report for additional information about the revenues of the Company’s segments.
Current report — wording carried from elsewhere
•Please see “Segment Analysis” later in this report for additional information about the operating expenses of the Company’s segments.
Current report — wording carried from elsewhere
•Please see “Segment Analysis” later in this report for additional information about the operating results of the Company’s segments.
Current report — wording carried from elsewhere
•The effective income tax rate was 24.8% for the six months ended June 30, 2026 compared to 34.5% for the six months ended June 30, 2025. The change in the effective income tax rate was primarily due to the absence of the impact of the non-deductible legacy litigation charges recorded in the prior year.
Current report — wording carried from elsewhere
•Adjusted operating income increased $1.1 billion, or 85.5%, for the three months ended June 30, 2026 compared to the prior year primarily driven by improved underlying performance in the Government business and the absence of the premium deficiency reserve recorded in the prior year.
Current report — wording carried from elsewhere
•Total revenues increased $2.4 billion, or 3.4%, in the six months ended June 30, 2026 compared to the prior year primarily driven by an increase in the Government business, partially offset by a decline as a result of the Company’s exit of the individual exchange business in 2026.
Current report — wording carried from elsewhere
•Medical membership as of June 30, 2026 of 26.0 million remained consistent compared with March 31, 2026.
Current report — wording carried from elsewhere
•Total revenues increased slightly in the six months ended June 30, 2026 compared to the prior year primarily driven by pharmacy drug mix, increased prescription volume, including contributions from the Company’s Rite Aid asset acquisitions, and brand inflation. These increases were largely offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Current report — wording carried from elsewhere
•Pharmacy same store sales increased 3.0% in the six months ended June 30, 2026 compared to the prior year. The increase was primarily driven by pharmacy drug mix, the 6.9% increase in pharmacy same store prescription volume on a 30-day equivalent basis and brand inflation. These increases were partially offset by regulatory-related price reductions on certain drugs, the impact of recent generic drug introductions and pharmacy reimbursement pressure.
Current report — wording carried from elsewhere
•Prescriptions filled increased 4.0% on a 30-day equivalent basis in the six months ended June 30, 2026 compared to the prior year primarily driven by incremental volume resulting from the Company’s Rite Aid prescription file acquisitions and increased utilization, partially offset by the absence of long-term care pharmacy prescription volume following the deconsolidation of Omnicare.