CVS 2015 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2015 CVS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

59
2015 Annual Report
pharmacy stores, 11 specialty mail order pharmacies and five mail order dispensing pharmacies, and 83 branches
for infusion and enteral services, including 73 ambulatory infusion suites and six centers of excellence, located in
40 states, Puerto Rico and the District of Columbia.
Retail/LTC Segment (the “RLS”)
The RLS sells prescription drugs and a wide assortment of general merchandise,
including over-the-counter drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting
cards and convenience foods, through the Company’s CVS Pharmacy®, CVS®, Longs Drugs®, Navarro Discount
Pharmacy® and Drogaria OnofreTM retail stores and online through CVS.com®, Navarro.comTM and Onofre.com.brTM.
The RLS also provides health care services through its MinuteClinic® health care clinics. MinuteClinics are staffed
by nurse practitioners and physician assistants who utilize nationally recognized protocols to diagnose and treat
minor health conditions, perform health screenings, monitor chronic conditions and deliver vaccinations.
With the acquisition of Omnicare, the RLS now includes LTC operations, which is comprised of providing the
distribution of pharmaceuticals, related pharmacy consulting and other ancillary services to chronic care facilities
and other care settings, as well as commercialization services which are provided under the name RxCrossroads®.
With the acquisition of the pharmacies and clinics of Target, the Company added 1,672 pharmacies and approxi-
mately 79 clinics.
As of December 31, 2015, the retail pharmacy business included 9,655 retail stores (of which 7,897 were our stores
that operated a pharmacy and 1,672 were our pharmacies located within a Target store) located in 49 states, the
District of Columbia, Puerto Rico and Brazil operating primarily under the CVS Pharmacy, CVS, Longs Drugs,
Navarro Discount Pharmacy and Drogaria Onofre names, the online retail websites, CVS.com, Navarro.com and
Onofre.com.br, and 1,135 retail health care clinics operating under the MinuteClinic name (of which 1,049 were
located in CVS Pharmacy stores). LTC operations is comprised of 143 spoke pharmacies that primarily handle new
prescription orders and 32 hub pharmacies that use proprietary automation to support spoke pharmacies with refill
prescriptions. LTC operates primarily under the Omnicare® and NeighborCare® names.
Corporate Segment
The Corporate Segment provides management and administrative services to support the
Company. The Corporate Segment consists of certain aspects of the Company’s executive management, corporate
relations, legal, compliance, human resources, corporate information technology and finance departments.
Principles of consolidation The consolidated financial statements include the accounts of the Company and its
majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary.
All intercompany balances and transactions have been eliminated.
The Company continually evaluates its investments to determine if they represent variable interests in a VIE. If the
Company determines that it has a variable interest in a VIE, the Company then evaluates if it is the primary benefi-
ciary of the VIE. The evaluation is a qualitative assessment as to whether the Company has the ability to direct the
activities of a VIE that most significantly impact the entity’s economic performance. The Company consolidates a
VIE if it is considered to be the primary beneficiary.
Assets and liabilities of VIEs for which the Company is the primary beneficiary were not significant to the Company’s
consolidated financial statements. VIE creditors do not have recourse against the general credit of the Company.
Use of estimates The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that affect
the reported amounts in the consolidated financial statements and accompanying notes. Actual results could
differ from those estimates.