CVS Health — Oct 17, 2024 release

We also appreciate her work to advance CVS Health’s modernization and transformation to become a diversified, connected, technology-driven health care company, allowing us to do even more for the people we are privileged to serve.” In connection with today’s announcement, the Company is also providing preliminary guidance for third quarter 2024 GAAP diluted EPS of $0.03 to $0.08 and Adjusted EPS of $1.05 to $1.10. Results for the third quarter include charges to record premium deficiency reserves (PDRs), primarily related to the company’s Medicare and Individual Exchange businesses inside its Health Care Benefits segment, of approximately $1.1 billion, which lowered third quarter 2024 Adjusted EPS by $0.63. The PDRs are expected to be substantially released during the fourth quarter of 2024, benefiting results in that period. The Company’s GAAP results also include a restructuring charge of approximately $1.2 billion, related to incremental store closures in 2025, as well as cost reduction actions discussed on the second quarter 2024 earnings call. In the third quarter of 2024, the Company has continued to experience medical cost trends in excess of those projected in its prior outlook. The Medical Benefit Ratio (“MBR”) for the third quarter is currently expected to be approximately 95.2%, which includes a 220-basis point impact from the PDRs. The Company’s other segments performed consistent with prior projections in the quarter. In light of continued elevated medical cost pressures in the Health Care Benefits segment, investors should no longer