Financial Highlights
(in millions, except per share figures)
2019
2018
% change
Total revenues
$
256,776$
194,57932.0%
Operating income
$
11,987$
4,021NM
Net income (loss)
$
6,631$
(596)NM
Diluted EPS from continuing operations
$
5.08$
(0.57)NM
Cash flows from operations
$
12,848$
8,86544.9%
Stock price at year-end
$
74.29$
65.5213.4%
Market capitalization at year-end
$
96,651$
84,84313.9%
NM = not meaningful
Total revenues
in billions of dollars
153.3
15
177.5
16
184.8
17
194.6
18
256.8
19
Diluted EPS from continuing operations
in dollars
4.62
15
4.91
16
6.45
17
(0.57)
18
5.08
19
Adjusted EPS*
in dollars per common share
5.16
15
5.84
16
5.90
17
7.08
18
7.08
19
* Adjusted EPS is a non-GAAP financial measure. A reconciliation of income (loss) from continuing operations attributable to CVS Health to adjusted income from continuing operations attributable to CVS Health and calculations of GAAP diluted EPS from continuing operations and Adjusted EPS are provided under the heading "Reconciliation" in the back pages of our Annual Report.
Driving better returns and cost transformation
"We are very pleased with the progress made across all of our businesses since the close of the Aetna acquisition. As we transform our business, we remain highly focused on the long-term trajectory of the Enterprise. We remain committed to our capital allocation strategy to repay long-term debt, maintain cash dividends to shareholders and invest in our businesses."
Executive Vice President and Chief Financial Officer, CVS Health
Consolidated financial statements
Consolidated Statements of Operations
For the Years Ended December 31,
For the Year Ended December 31,
(in millions, except per share figures)
2019
2018
2017
Revenues:
$
$
$
Products
$
185,236$
183,910$
180,063Premiums
$
63,122$
8,184$
3,558Services
$
7,407$
1,825$
1,144Net investment income
$
1,011$
660$
21Total revenues
$
256,776$
194,579$
184,786Operating costs:
$
$
$
Cost of products sold
$
158,719$
156,447$
153,448Benefit costs
$
52,529$
6,594$
2,810Goodwill impairments
$
--$
6,149$
181Operating expenses
$
33,541$
21,368$
18,809Total operating costs
$
244,789$
190,558$
175,248Operating income
$
11,987$
4,021$
9,538Interest expense
$
3,035$
2,619$
1,062Loss on early extinguishment of debt
$
79$
--$
--Other expense (income)
$
(124)$
(4)$
208Income before income tax provision
$
8,997$
1,406$
8,268Income tax provision
$
2,366$
2,002$
1,637Income (loss) from continuing operations
$
6,631$
(596)$
6,631Loss from discontinued operations, net of tax
$
--$
--$
(8)Net income (loss)
$
6,631$
(596)$
6,623Net (income) loss attributable to noncontrolling interests
$
3$
2$
(1)Net income (loss) attributable to CVS Health
$
6,634$
(594)$
6,622$
$
$
Basic earnings (loss) per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
5.10$
(0.57)$
6.48Loss from discontinued operations attributable to CVS Health
$
--$
--$
(0.01)Net income (loss) attributable to CVS Health
$
5.10$
(0.57)$
6.47Weighted average basic shares outstanding
$
1,301$
1,044$
1,020Diluted earnings (loss) per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
5.08$
(0.57)$
6.45Loss from discontinued operations attributable to CVS Health
$
--$
--$
(0.01)Net income (loss) attributable to CVS Health
$
5.08$
(0.57)$
6.44Weighted average diluted shares outstanding
$
1,305$
1,044$
1,024Dividends declared per share
$
2.00$
2.00$
2.00See accompanying notes to consolidated financial statements.
Consolidated Statements of Comprehensive Income (Loss)
For the Years Ended December 31,
For the Year Ended December 31,
(in millions)
2019
2018
2017
Net income (loss)
$
6,631$
(596)$
6,623Other comprehensive income (loss), net of tax:
$
$
$
Net unrealized investment gains
$
677$
97$
--Foreign currency translation adjustments
$
162$
(29)$
(2)Net cash flow hedges
$
(33)$
330$
(10)Pension and other postretirement benefits
$
111$
(124)$
152Other comprehensive income
$
917$
274$
140Comprehensive income (loss)
$
7,548$
(322)$
6,763Comprehensive (income) loss attributable to noncontrolling interests
$
3$
2$
(1)Comprehensive income (loss) attributable to CVS Health
$
7,551$
(320)$
6,762See accompanying notes to consolidated financial statements.
Consolidated Balance Sheets
For the Years Ended December 31,
For the Year Ended December 31,
(in millions, except per share figures)
2019
2018
Assets:
$
$
Cash and cash equivalents
$
5,683$
4.059Investments
$
2,373$
2,522Accounts receivable, net
$
19,617$
17,631Inventories
$
17,516$
16,450Other current assets
$
5,113$
4,581Total current assets
$
50,302$
45,243Long-term investments
$
17,314$
15,732Property and equipment, net
$
12,044$
11,349Operating lease right-of-use assets
$
20,860$
--Goodwill
$
79,749$
78,678Intangible assets, net
$
33,121$
36,524Separate accounts assets
$
4,459$
3,884Other assets
$
4,600$
5,046Total assets
$
222,449$
196,456$
$
Liabilities:
$
$
Accounts payable
$
10,492$
8,925Pharmacy claims and discounts payable
$
13,601$
11,365Health care costs payable
$
6,879$
6,147Policyholders' funds
$
2,991$
2,939Accrued expenses
$
12,133$
10,711Other insurance liabilities
$
1,830$
1,937Current portion of operating lease liabilities
$
1,596$
--Short-term debt
$
--$
720Current portion of long-term debt
$
3,781$
1,265Total current liabilities
$
53,303$
44,009Long-term operating lease liabilities
$
18,926$
--Long-term debt
$
64,699$
71,444Deferred income taxes
$
7,294$
7,677Separate accounts liabilities
$
4,459$
3,884Other long-term insurance liabilities
$
7,436$
8,119Other long-term liabilities
$
2,162$
2,780Total liabilities
$
158,279$
137,913Commitments and contingencies (Note 16)
$
$
$
$
Shareholders' equity:
$
$
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding
$
--$
--Common stock, par value $0.01: 3,200 shares authorized; 1,727 shares issued and 1,302 shares outstanding at December 31, 2019 and 1,720 shares issued and 1,295 shares outstanding at December 31, 2018 and capital surplus
$
45,972$
45,440Treasury stock, at cost: 425 shares at both December 31, 2019 and 2018
$
(28,235)$
(28,228)Retained earnings
$
45,108$
40,911Accumulated other comprehensive income
$
1,019$
102Total CVS Health shareholders' equity
$
63,864$
58,225Noncontrolling interests
$
306$
318Total shareholders' equity
$
64,170$
58,543Total liabilities and shareholders' equity
$
222,449$
196,456See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows
For the Years Ended December 31,
For the Year Ended December 31,
(in millions)
2019
2018
2017
Cash flows from operating activities:
$
$
$
Cash receipts from customers
$
248,393$
186,519$
176,594Cash paid for inventory and prescriptions dispensed by retail network pharmacies
$
(149,655)$
(148,981)$
(146,469)Insurance benefits paid
$
(52,242)$
(6,897)$
(2,810)Cash paid to other suppliers and employees
$
(28,932)$
(17,234)$
(15,348)Interest and investment income received
$
955$
644$
21Interest paid
$
(2,954)$
(2,803)$
(1,072)Income taxes paid
$
(2,717)$
(2,383)$
(2,909)Net cash provided by operating activities
$
12,848$
8,865$
8,007$
$
$
Cash flows from investing activities:
$
$
$
Proceeds from sales and maturities of investments
$
7,049$
817$
61Purchases of investments
$
(7,534)$
(692)$
(137)Purchases of property and equipment
$
(2,457)$
(2,037)$
(1,918)Proceeds from sale-leaseback transactions
$
5$
--$
265Acquisitions (net of cash acquired)
$
(444)$
(42,226)$
(1,181)Proceeds from sale of subsidiary and other assets
$
--$
832$
--Other
$
42$
21$
33Net cash used in investing activities
$
(3,339)$
(43,285)$
(2,877)Cash flows from financing activities:
$
$
$
Net repayments of short-term debt
$
(720)$
(556)$
(598)Proceeds from issuance of long-term debt
$
3,736$
44,343$
--Repayments of long-term debt
$
(8,336)$
(5,522)$
--Derivative settlements
$
(25)$
446$
--Repurchase of common stock
$
--$
--$
(4,361)Dividends paid
$
(2,603)$
(2,038)$
(2,049)Proceeds from exercise of stock options
$
210$
242$
329Payments for taxes related to net share settlement of equity awards
$
(112)$
(97)$
(71)Other
$
--$
1$
(1)Net cash provided by (used in) financing activities
$
(7,850)$
36,819$
(6,751)Effect of exchange rate changes on cash, cash equivalents and restricted cash
$
--$
(4)$
1Net increase (decrease) in cash, cash equivalents and restricted cash
$
1,659$
2,395$
(1,620)Cash, cash equivalents and restricted cash at the beginning of the period
$
4,295$
1,900$
3,520Cash, cash equivalents and restricted cash at the end of the period
$
5,954$
4,295$
1,900Reconciliation of net income (loss) to net cash provided by operating activities:
$
$
$
Net income (loss)
$
6,631$
(596)$
6,623Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
$
$
$
Depreciation and amortization
$
4,371$
2,718$
2,479Goodwill impairments
$
--$
6,149$
181Loss on settlement of defined benefit pension plans
$
--$
--$
187Stock-based compensation
$
453$
280$
234Loss on sale of subsidiary
$
205$
86$
--Loss on early extinguishment of debt
$
79$
--$
--Deferred income taxes
$
(654)$
87$
(1,334)Other noncash items
$
264$
253$
53Change in operating assets and liabilities, net of effects from acquisitions:
$
$
$
Accounts receivable, net
$
(2,158)$
(1,139)$
(941)Inventories
$
(1,075)$
(1,153)$
(514)Other assets
$
(614)$
(3)$
(338)Accounts payable and pharmacy claims and discounts payable
$
3,550$
2,329$
1,710Health care costs payable and other insurance liabilities
$
320$
(311)$
--Other liabilities
$
1,476$
165$
(333)Net cash provided by operating activities
$
12,848$
8,865$
8,007See accompanying notes to consolidated financial statements.
