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70 CVS Health
Notes to Consolidated Financial Statements
at the SKU level and valued front store inventory as of January 1, 2015 and calculated the cumulative impact. The
effect of these changes in accounting principle as of January 1, 2015, was a decrease in inventories of $7 million, an
increase in current deferred income tax assets of $3 million and a decrease in retained earnings of $4 million.
Had the Company not made these changes in accounting principle, for the year ended December 31, 2015, income
from continuing operations would have been lower by $27 million. Basic and diluted earnings per share from continu-
ing operations attributable to CVS Health would have been approximately $0.02 per share lower for the year ended
December 31, 2015.
3 | Acquisitions
Omnicare Acquisition
On August 18, 2015, the Company acquired 100% of the outstanding common shares and voting interests of
Omnicare, for $98 per share for a total of $9.6 billion and assumed long-term debt with a fair value of approximately
$3.1 billion. Additionally, holders of Omnicare restricted stock units and performance based restricted stock units
received 738,765 CVS Health Corporation restricted stock awards with a fair value of approximately $80 million
as replacement awards. Omnicare is a leading health care services company that specializes in the management
of complex pharmaceutical care. Omnicare’s long-term care (“LTC”) business is the nation’s largest provider of
pharmaceuticals, related pharmacy consulting and other ancillary services to chronic care facilities and other care
settings. In addition, Omnicare has a specialty pharmacy business operating primarily under the name of Advanced
Care Scripts, and provides commercialization services under the name of RxCrossroads®. The Company is including
LTC and the commercialization services in its former Retail Pharmacy Segment, which has been renamed the
“Retail/LTC Segment,” and will include the specialty pharmacy business in its Pharmacy Services Segment. The
Company acquired Omnicare to expand its operations in dispensing prescription drugs to assisted-living and
long-term care facilities, and to broaden its presence in the specialty pharmacy business as the Company seeks to
serve a greater percentage of the growing senior patient population in the United States.
The fair value of the consideration transferred on the date of acquisition consisted of the following:
IN MILLIONS
Cash paid to Omnicare shareholders $ 9,636
Fair value of replacement equity awards issued to Omnicare employees for precombination services 9
Total consideration $ 9,645
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date
of acquisition:
IN MILLIONS
Current assets (including cash of $298) $ 1,657
Property and equipment 313
Goodwill 9,090
Intangible assets 3,962
Other noncurrent assets 64
Current liabilities (705)
Long-term debt (3,110)
Deferred income tax liabilities (1,518)
Other noncurrent liabilities (69)
Redeemable noncontrolling interest (39)
Total consideration $ 9,645