On January 4, 2018, CVS Health Corporation (“CVS Health”) revised its outlook for the fourth quarter of 2017 and provided its full year 2018 guidance. For full-year 2018, the company expects to deliver consolidated net revenue growth of 0.75% to 2.5% and adjusted consolidated operating profit growth of 1% to 4%. Adjusted operating profit in its Retail/LTC segment is expected to grow in the low-single digits and adjusted operating profit in its Pharmacy Services segment is expected to grow in the low- to mid-single digits. Strong growth in scripts and claims, continued purchasing efficiencies from the company's Red Oak venture, and incremental net benefits from the company's streamlining initiative are expected to be beneficial contributors to enterprise growth. Operating profit growth in 2018 is expected to be unfavorably affected by costs associated with the company's implementation of its contract to provide PBM services to Anthem Inc. beginning in 2020, as well as the recent divestiture of RxCrossroads. Together, these two factors reduce expected adjusted consolidated operating profit growth by approximately 125 basis points. While the company continues to expect its pending acquisition of Aetna Inc. to close during the second half of 2018, for guidance purposes only, the acquisition is assumed to close after year-end 2018. As with past acquisitions, all acquisition-related transaction, integration and bridge financing costs will be excluded from the company's adjusted figures. The company expects net interest expense in a range of $2.0 billion to $2.3 billion in 2018. Taking into account the change in the statutory federal rate as well as the law's effects on state taxes and other permanent items, the company expects its effective tax rate to be approximately 27% in 2018. This reduction in the tax rate represents an increase in cash flow of approximately $1.2 billion. With the financial flexibility that tax reform provides, the company anticipates making strategic investments in future areas of growth in its business, particularly as CVS Health and Aetna combine to remake the consumer health experience, and will have more to say as plans are finalized.

Additionally, the company revised its outlook for the fourth quarter of 2017. Due to softer margin performance in the PBM's client and retail network claims management process, the company now expects a mid-teens growth rate in the fourth quarter and about 4% for the full year for the Pharmacy Services segment's adjusted operating profit. The company continues to expect fourth quarter operating profit from its Retail/LTC segment to be at the high end of its previously-provided range of 3.5% to 1.0%. Combined with the impact from the suspension of share repurchases, offset by a better effective tax rate, the company expects to deliver adjusted consolidated operating profit growth and adjusted EPS at the lower end of their respective ranges provided during its third quarter 2017 earnings call. At that time, the company expected adjusted consolidated operating profit growth of 5.75% to 8% and adjusted EPS of $1.88 to $1.92. Also, the company expects to meaningfully benefit in the fourth quarter from the Tax Cuts and Jobs Act, but estimates of these benefits have not been included as the company is currently assessing the law's impact on its 2017 financial statements.