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27
2014 Annual Report
Segment Analysis
We evaluate the performance of our Pharmacy Services and Retail Pharmacy segments based on net revenues,
gross profit and operating profit before the effect of certain intersegment activities and charges. The Company
evaluates the performance of its Corporate Segment based on operating expenses before the effect of discontinued
operations and certain intersegment activities and charges. The following is a reconciliation of the Company’s
business segments to the consolidated financial statements:
Pharmacy Retail
Services Pharmacy Corporate Intersegment Consolidated
IN MILLIONS Segment
(1) (2)
Segment
(2)
Segment Eliminations
(2)
Totals
2014:
Net revenues
$ 88,440 $ 67,798 $ — $ (16,871) $ 139,367
Gross profit
4,771 21,277 — (681) 25,367
Operating profit (loss)
3,514 6,762 (796) (681) 8,799
2013:
Net revenues $ 76,208 $ 65,618 $ — $ (15,065) $ 126,761
Gross profit 4,237 20,112 — (566) 23,783
Operating profit (loss) 3,086 6,268 (751) (566) 8,037
2012:
Net revenues $ 73,444 $ 63,641 $ — $ (13,965) $ 123,120
Gross profit 3,808 19,091 — (411) 22,488
Operating profit (loss) 2,679 5,636 (694) (411) 7,210
(1) Net revenues of the Pharmacy Services Segment include approximately $8.1 billion, $7.9 billion and $8.4 billion of Retail Co-Payments
for 2014, 2013 and 2012, respectively. See Note 1 to the consolidated financial statements for additional information about Retail
Co-Payments.
(2) Intersegment eliminations relate to two types of transactions: (i) Intersegment revenues that occur when Pharmacy Services Segment
customers use Retail Pharmacy Segment stores to purchase covered products. When this occurs, both the Pharmacy Services and
Retail Pharmacy segments record the revenue on a standalone basis, and (ii) Intersegment revenues, gross profit and operating profit
that occur when Pharmacy Services Segment customers, through the Company’s intersegment activities (such as the Maintenance
Choice® program), elect to pick-up their maintenance prescriptions at Retail Pharmacy Segment stores instead of receiving them
through the mail. When this occurs, both the Pharmacy Services and Retail Pharmacy segments record the revenue, gross profit and
operating profit on a standalone basis. The following amounts are eliminated in consolidation in connection with the item (ii) interseg-
ment activity: net revenues of $4.9 billion, $4.3 billion and $3.4 billion for the years ended December 31, 2014, 2013 and 2012, respectively;
and gross profit and operating profit of $681 million, $566 million and $411 million for the years ended December 31, 2014, 2013 and
2012, respectively.