WOONSOCKET, R.I., May 1, 2015 /PRNewswire/ --
First Quarter Year-over-year Highlights:
- Net revenues increased 11.1% to $36.3
billion
- Operating profit increased 5.3% to $2.1 billion
- Adjusted EPS of $1.14, an
increase of 12.2%; GAAP diluted EPS from continuing operations of
$1.07
- Generated free cash flow of approximately $1.6 billion; cash flow from operations of
approximately $2.0 billion
2015 Guidance:
- Full year Adjusted EPS narrowed to $5.08 to $5.19; GAAP diluted EPS from continuing
operations narrowed to $4.80 to
$4.91
- Provided second quarter Adjusted EPS guidance of
$1.17 to $1.20 and GAAP diluted EPS
from continuing operations guidance of $1.10
to $1.13
- Confirmed full year free cash flow of $5.9 to $6.2 billion; cash flow from operations
of $7.6 to $7.9 billion
CVS Health Corporation (NYSE: CVS) today announced operating
results for the three months ended March 31, 2015.
Revenues
Net revenues for the three months ended March 31, 2015,
increased 11.1%, or $3.6 billion, to
$36.3 billion compared to the three
months ended March 31, 2014.
Revenues in the Pharmacy Services Segment increased 18.2%, or
$3.7 billion, to $23.9 billion in the three months ended
March 31, 2015. The increase was primarily driven by growth in
specialty pharmacy and pharmacy network claims. Pharmacy network
claims processed during the three months ended March 31, 2015,
increased 11.0% to 230.8 million compared to 208.0 million in the
prior year. The increase in the pharmacy network claim volume was
primarily due to net new business as well as growth in Managed
Medicaid and public exchanges. Mail choice claims processed during
the three months ended March 31, 2015, increased 2.7% to 20.3
million, compared to 19.8 million in the prior year. The increase
in mail choice claims was driven by specialty claim volume and
increased claims associated with the continued adoption of our
Maintenance Choice® offerings.
Revenues in the Retail Pharmacy Segment increased 2.9%, or
$471 million, to $17.0 billion in the three months ended
March 31, 2015. Same store sales
increased 1.2% over the first quarter of last year, with pharmacy
same store sales up 4.2% and front store same store sales down
6.1%. On a comparable basis, front store same store sales would
have been approximately 800 basis points higher if tobacco and the
estimated associated basket sales were excluded from the three
months ended March 31, 2014. Front
stores same store sales were impacted by softer customer traffic,
partially offset by an increase in basket size. Pharmacy same store
prescription volumes rose 5.1% on a 30-day equivalent basis,
partially driven by strong seasonal volume. Pharmacy same store
sales were negatively impacted by approximately 280 basis points
from recent generic drug introductions and by approximately 190
basis points from the implementation of Specialty
Connect®. The implementation of Specialty Connect had a
greater effect on revenues than prescription volumes due to the
higher dollar value of specialty products.
For the three months ended March 31, 2015, the generic
dispensing rate increased approximately 150 basis points from the
prior year in both segments, rising to 83.5% in the Pharmacy
Services Segment and 84.4% in the Retail Pharmacy Segment.
Net Income
Net income for the three months ended March 31, 2015,
increased 8.1%, or $92 million, to
$1.2 billion, compared with
approximately $1.1 billion during the
three months ended March 31, 2014. The Pharmacy Services and
Retail Pharmacy segments both benefited from the impact of
increased generic drugs dispensed. The Pharmacy Services Segment
was positively impacted by growth in specialty pharmacy as well as
favorable purchasing and rebate economics, partially offset by
price compression. The Retail Pharmacy Segment was positively
impacted by increased sales, an improved front store margin rate
largely driven by the removal of tobacco products and favorable
purchasing economics, partially offset by reimbursement pressure.
Adjusted earnings per share (Adjusted EPS) for the three months
ended March 31, 2015 and 2014, was $1.14 and $1.02,
respectively, an increase of 12.2%. Adjusted EPS in the three
months ended March 31, excludes
$129 million and $131 million in 2015 and 2014, respectively, of
intangible asset amortization related to acquisition activity. GAAP
earnings per diluted share for the three months ended
March 31, 2015 and 2014, was $1.07 and $0.95,
respectively, an increase of 12.7%.
President and Chief Executive Officer Larry Merlo stated, "We delivered
better-than-expected results this quarter, primarily driven by
stronger-than-expected prescription volumes as well as favorable
purchasing and rebate economics in the PBM. Adjusted EPS
increased 12.2%, to $1.14,
five cents above the high end of our
guidance range, with operating profit in the retail business in
line with our expectations and operating profit in the PBM
exceeding our expectations. We also generated approximately
$1.6 billion in free cash flow, and
we continued to return significant value to our shareholders
through our disciplined capital allocation practices."
Mr. Merlo continued, "We are already off to a solid start in the
2016 PBM selling season. Our integrated model allows us to provide
differentiated products and services that generate savings for our
clients while providing better health outcomes and convenience for
patients. We remain very well positioned with our distinctive,
channel-agnostic solutions, which are resonating strongly in the
marketplace."
Guidance
The Company raised the low end of its EPS guidance range for the
full year 2015. The Company now expects to deliver Adjusted EPS of
$5.08 to $5.19, up from $5.05 to $5.19, and GAAP diluted EPS from
continuing operations of $4.80 to
$4.91, up from $4.77 to $4.91
in 2015. The Company also continues to expect to deliver 2015
free cash flow of $5.9 billion to $6.2
billion, and 2015 cash flow from operations of $7.6 billion to $7.9 billion. The Company expects
to deliver Adjusted EPS of $1.17 to
$1.20 and GAAP diluted EPS from continuing operations of
$1.10 to $1.13 in the second quarter
of 2015.
Real Estate Program
During the three months ended March 31, 2015, the Company
opened 38 new retail drugstores and closed 10 retail drugstores. In
addition, the Company relocated 12 retail drugstores. As of
March 31, 2015, the Company operated 8,006 locations in 47
states, the District of Columbia,
Puerto Rico and Brazil. These locations included 7,850 retail
drugstores, 17 onsite pharmacies, 24 retail specialty pharmacy
stores, 11 specialty mail order pharmacies, four mail service
dispensing pharmacies, and 86 branches for infusion and enteral
services, including approximately 70 ambulatory infusion suites and
six centers of excellence.
Teleconference and Webcast
The Company will be holding a conference call today for the
investment community at 8:30 am (EDT)
to discuss its quarterly results. An audio webcast of the call will
be broadcast simultaneously for all interested parties through the
Investor Relations section of the CVS Health website at
http://investors.cvshealth.com/. This webcast will be archived and
available on the website for a one-year period following the
conference call.
About the Company
CVS Health is a pharmacy innovation company helping people on
their path to better health. Through its more than 7,800 retail
drugstores, nearly 1,000 walk-in medical clinics, a leading
pharmacy benefits manager with more than 70 million plan members,
and expanding specialty pharmacy services, the Company enables
people, businesses and communities to manage health in more
affordable, effective ways. This unique integrated model increases
access to quality care, delivers better health outcomes and lowers
overall health care costs. Find more information about how CVS
Health is shaping the future of health at www.cvshealth.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. By their nature, all
forward-looking statements involve risks and uncertainties. Actual
results may differ materially from those contemplated by the
forward-looking statements for a number of reasons as described in
our Securities and Exchange Commission filings, including those set
forth in the Risk Factors section and under the section entitled
"Cautionary Statement Concerning Forward-Looking Statements" in our
most recently filed Annual Report on Form 10-K and Quarterly
Report on Form 10-Q.
— Tables Follow —
|
CVS HEALTH
CORPORATION
|
|
Condensed
Consolidated Statements of Income
|
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
In millions, except per share amounts
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net
revenues
|
|
$
|
36,332
|
|
|
$
|
32,689
|
|
|
Cost of
revenues
|
|
30,168
|
|
|
26,747
|
|
|
Gross
profit
|
|
6,164
|
|
|
5,942
|
|
|
Operating
expenses
|
|
4,032
|
|
|
3,918
|
|
|
Operating
profit
|
|
2,132
|
|
|
2,024
|
|
|
Interest expense,
net
|
|
134
|
|
|
158
|
|
|
Income before income
tax provision
|
|
1,998
|
|
|
1,866
|
|
|
Income tax
provision
|
|
777
|
|
|
737
|
|
|
Net income
|
|
$
|
1,221
|
|
|
$
|
1,129
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
Basic
|
|
$
|
1.08
|
|
|
$
|
0.96
|
|
|
Diluted
|
|
$
|
1.07
|
|
|
$
|
0.95
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
Basic
|
|
1,128
|
|
|
1,180
|
|
|
Diluted
|
|
1,136
|
|
|
1,190
|
|
|
Dividends declared
per share
|
|
$
|
0.350
|
|
|
$
|
0.275
|
|
|
CVS HEALTH
CORPORATION
|
|
Condensed
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
|
|
March
31,
|
|
December
31,
|
|
In millions, except per share amounts
|
|
2015
|
|
2014
|
|
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,518
|
|
|
$
|
2,481
|
|
|
Short-term
investments
|
|
116
|
|
|
34
|
|
|
Accounts receivable,
net
|
|
10,162
|
|
|
9,687
|
|
|
Inventories
|
|
12,231
|
|
|
11,930
|
|
|
Deferred income
taxes
|
|
1,001
|
|
|
985
|
|
|
Other current
assets
|
|
594
|
|
|
866
|
|
|
Total current
assets
|
|
25,622
|
|
|
25,983
|
|
|
Property and
equipment, net
|
|
8,871
|
|
|
8,843
|
|
|
Goodwill
|
|
28,123
|
|
|
28,142
|
|
|
Intangible assets,
net
|
|
9,759
|
|
|
9,774
|
|
|
Other
assets
|
|
1,555
|
|
|
1,510
|
|
|
Total
assets
|
|
$
|
73,930
|
|
|
$
|
74,252
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
|
6,431
|
|
|
$
|
6,547
|
|
|
Claims and discounts
payable
|
|
6,273
|
|
|
5,404
|
|
|
Accrued
expenses
|
|
5,936
|
|
|
5,816
|
|
|
Short-term
debt
|
|
500
|
|
|
685
|
|
|
Current portion of
long-term debt
|
|
573
|
|
|
575
|
|
|
Total current
liabilities
|
|
19,713
|
|
|
19,027
|
|
|
Long-term
debt
|
|
11,689
|
|
|
11,695
|
|
|
Deferred income
taxes
|
|
4,020
|
|
|
4,036
|
|
|
Other long-term
liabilities
|
|
1,513
|
|
|
1,531
|
|
|
Commitments and
contingencies
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
CVS Health
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; 1,693 shares issued and
1,127
|
|
|
|
|
|
shares outstanding at
March 31, 2015 and 1,691 shares issued and 1,140 shares
|
|
|
|
|
|
outstanding at
December 31, 2014
|
|
17
|
|
|
17
|
|
|
Treasury stock, at cost: 565 shares at March 31, 2015
and 550 shares at December 31,
2014
|
|
(25,634)
|
|
|
(24,078)
|
|
|
Shares held in trust:
1 share at March 31, 2015 and December 31,
2014
|
|
(31)
|
|
|
(31)
|
|
|
Capital
surplus
|
|
30,235
|
|
|
30,418
|
|
|
Retained
earnings
|
|
32,667
|
|
|
31,849
|
|
|
Accumulated other
comprehensive income (loss)
|
|
(264)
|
|
|
(217)
|
|
|
Total CVS Health
shareholders' equity
|
|
36,990
|
|
|
37,958
|
|
|
Noncontrolling
interest
|
|
5
|
|
|
5
|
|
|
Total shareholders'
equity
|
|
36,995
|
|
|
37,963
|
|
|
Total liabilities and
shareholders' equity
|
|
$
|
73,930
|
|
|
$
|
74,252
|
|
|
CVS HEALTH
CORPORATION
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
Three
Months Ended
March 31,
|
|
In millions
|
|
2015
|
|
2014
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Cash receipts from
customers
|
|
$
|
34,570
|
|
|
$
|
30,505
|
|
|
Cash paid for
inventory and prescriptions dispensed by retail network
pharmacies
|
|
(28,276)
|
|
|
(23,966)
|
|
|
Cash paid to other
suppliers and employees
|
|
(4,162)
|
|
|
(4,196)
|
|
|
Interest
received
|
|
3
|
|
|
3
|
|
|
Interest
paid
|
|
(87)
|
|
|
(104)
|
|
|
Income taxes
paid
|
|
(64)
|
|
|
(70)
|
|
|
Net cash provided by
operating activities
|
|
1,984
|
|
|
2,172
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(419)
|
|
|
(388)
|
|
|
Proceeds from
sale-leaseback transactions
|
|
25
|
|
|
5
|
|
|
Proceeds from sale of
property and equipment and other assets
|
|
8
|
|
|
5
|
|
|
Acquisitions (net of
cash acquired) and other investments
|
|
(61)
|
|
|
(2,194)
|
|
|
Purchase of
available-for-sale investments
|
|
(113)
|
|
|
(43)
|
|
|
Sale or maturity of
available-for-sale investments
|
|
16
|
|
|
55
|
|
|
Net cash used in
investing activities
|
|
(544)
|
|
|
(2,560)
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Decrease in
short-term debt
|
|
(185)
|
|
|
—
|
|
|
Dividends
paid
|
|
(399)
|
|
|
(325)
|
|
|
Proceeds from
exercise of stock options
|
|
126
|
|
|
154
|
|
|
Excess tax benefits
from stock-based compensation
|
|
59
|
|
|
37
|
|
|
Repurchase of common
stock
|
|
(2,007)
|
|
|
(801)
|
|
|
Net cash used in
financing activities
|
|
(2,406)
|
|
|
(935)
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
3
|
|
|
—
|
|
|
Net decrease in cash
and cash equivalents
|
|
(963)
|
|
|
(1,323)
|
|
|
Cash and cash
equivalents at the beginning of the period
|
|
2,481
|
|
|
4,089
|
|
|
Cash and cash
equivalents at the end of the period
|
|
$
|
1,518
|
|
|
$
|
2,766
|
|
|
|
|
|
|
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
|
|
Net income
|
|
$
|
1,221
|
|
|
$
|
1,129
|
|
|
Adjustments required
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
490
|
|
|
477
|
|
|
Stock-based
compensation
|
|
44
|
|
|
35
|
|
|
Deferred income taxes
and other non-cash items
|
|
(31)
|
|
|
16
|
|
|
Change in operating
assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
Accounts receivable,
net
|
|
(481)
|
|
|
(139)
|
|
|
Inventories
|
|
(313)
|
|
|
(64)
|
|
|
Other current
assets
|
|
269
|
|
|
70
|
|
|
Other
assets
|
|
(52)
|
|
|
(39)
|
|
|
Accounts payable and
claims and discounts payable
|
|
756
|
|
|
339
|
|
|
Accrued
expenses
|
|
153
|
|
|
362
|
|
|
Other long-term
liabilities
|
|
(72)
|
|
|
(14)
|
|
|
Net cash provided by
operating activities
|
|
$
|
1,984
|
|
|
$
|
2,172
|
|
|
Adjusted Earnings
Per Share
|
|
(Unaudited)
|
|
|
For internal
comparisons, management finds it useful to assess year-over-year
performance by adjusting diluted earnings per share for
amortization, which primarily relates to acquisition
activities.
|
|
|
The Company defines
adjusted earnings per share as income before income tax provision
plus amortization, less adjusted income tax provision and other,
which is comprised of earnings allocated to participating
securities, divided by the weighted average diluted shares
outstanding.
|
|
|
The following is a
reconciliation of income before income tax provision to adjusted
earnings per share:
|
|
|
|
Three Months Ended
March 31,
|
|
In millions, except per share amounts
|
|
2015
|
|
2014
|
|
Income before income
tax provision
|
|
$
|
1,998
|
|
|
$
|
1,866
|
|
|
Amortization
|
|
129
|
|
|
131
|
|
|
Adjusted income
before income tax provision
|
|
2,127
|
|
|
1,997
|
|
|
Adjusted income tax
provision and other(1)
|
|
833
|
|
|
789
|
|
|
Adjusted net
income
|
|
$
|
1,294
|
|
|
$
|
1,208
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
1,136
|
|
|
1,190
|
|
|
Adjusted earnings per
share
|
|
$
|
1.14
|
|
|
$
|
1.02
|
|
|
|
|
(1)
|
The adjusted income
tax provision is computed using the effective income tax rate
computed from the condensed consolidated statement of income.
"Other" includes earnings allocated to participating securities of
$5 million for the three months ended March 31, 2015.
|
|
Free Cash
Flow
|
|
(Unaudited)
|
|
|
The Company defines
free cash flow as net cash provided by operating activities less
net additions to properties and equipment (i.e., additions to
property and equipment plus proceeds from sale-leaseback
transactions).
|
|
|
The following is a
reconciliation of net cash provided by operating activities to free
cash flow:
|
|
|
|
Three
Months Ended
March 31,
|
|
In millions
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
1,984
|
|
|
$
|
2,172
|
|
|
Subtract: Additions
to property and equipment
|
|
(419)
|
|
|
(388)
|
|
|
Add: Proceeds from
sale-leaseback transactions
|
|
25
|
|
|
5
|
|
|
Free cash
flow
|
|
$
|
1,590
|
|
|
$
|
1,789
|
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
|
The Company evaluates
its Pharmacy Services and Retail Pharmacy Segment performance based
on net revenue, gross profit and operating profit before the effect
of nonrecurring charges and gains and certain intersegment
activities. The Company evaluates the performance of its Corporate
Segment based on operating expenses before the effect of
nonrecurring charges and gains and certain intersegment activities.
The following is a reconciliation of the Company's segments to the
accompanying condensed consolidated financial
statements:
|
|
|
In millions
|
|
Pharmacy
Services
Segment(1)
|
|
Retail
Pharmacy
Segment
|
|
Corporate
Segment
|
|
Intersegment
Eliminations(2)
|
|
Consolidated
Totals
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2015:
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
$
|
23,879
|
|
|
$
|
16,951
|
|
|
$
|
—
|
|
|
$
|
(4,498)
|
|
|
$
|
36,332
|
|
|
Gross
profit
|
|
1,026
|
|
|
5,295
|
|
|
—
|
|
|
(157)
|
|
|
6,164
|
|
|
Operating profit
(loss)
|
|
734
|
|
|
1,727
|
|
|
(189)
|
|
|
(140)
|
|
|
2,132
|
|
|
March 31,
2014:
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
20,195
|
|
|
16,480
|
|
|
—
|
|
|
(3,986)
|
|
|
32,689
|
|
|
Gross
profit
|
|
934
|
|
|
5,184
|
|
|
—
|
|
|
(176)
|
|
|
5,942
|
|
|
Operating profit
(loss)
|
|
640
|
|
|
1,750
|
|
|
(190)
|
|
|
(176)
|
|
|
2,024
|
|
|
|
|
(1)
|
Net revenues of the
Pharmacy Services Segment includes approximately $2.5 billion and
$2.2 billion of retail co-payments for the three months ended
March 31, 2015 and 2014, respectively.
|
|
(2)
|
Intersegment
eliminations relate to two types of transactions:
(i) Intersegment revenues that occur when Pharmacy Services
Segment customers use Retail Pharmacy Segment stores to purchase
covered products. When this occurs, both the Pharmacy Services and
Retail Pharmacy segments record the revenue on a stand-alone basis,
and (ii) Intersegment revenues, gross profit and operating
profit that occur when Pharmacy Services Segment customers, through
the Company's intersegment activities (such as the Maintenance
Choice® program), elect to pick-up their maintenance
prescriptions at Retail Pharmacy Segment stores instead of
receiving them through the mail. When this occurs, both the
Pharmacy Services and Retail Pharmacy segments record the revenue,
gross profit and operating profit on a standalone basis. The
following amounts are eliminated in consolidation in connection
with the intersegment activity described in item (ii) above: net
revenues of $1.2 billion and $1.1 billion for the three months
ended March 31, 2015 and 2014, respectively; gross profit of
$157 million and $176 million for the three months ended
March 31, 2015 and 2014, respectively; and operating profit of
$140 million and $176 million for the three months ended March 31,
2015 and 2014, respectively.
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
|
Pharmacy Services
Segment
|
|
|
The following table
summarizes the Pharmacy Services Segment's performance for the
respective periods:
|
|
|
|
Three Months Ended
March 31,
|
|
In millions
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net
revenues
|
|
$
|
23,879
|
|
|
$
|
20,195
|
|
|
Gross
profit
|
|
1,026
|
|
|
934
|
|
|
Gross profit % of net
revenues
|
|
4.3
|
%
|
|
4.6
|
%
|
|
Operating
expenses
|
|
292
|
|
|
294
|
|
|
Operating expense %
of net revenues
|
|
1.2
|
%
|
|
1.5
|
%
|
|
Operating
profit
|
|
734
|
|
|
640
|
|
|
Operating profit % of
net revenues
|
|
3.1
|
%
|
|
3.2
|
%
|
|
Net
revenues(1):
|
|
|
|
|
|
Mail
choice(2)
|
|
$
|
8,750
|
|
|
$
|
6,834
|
|
|
Pharmacy
network(3)
|
|
15,059
|
|
|
13,302
|
|
|
Other
|
|
70
|
|
|
59
|
|
|
Pharmacy claims
processed(1):
|
|
|
|
|
|
Total
|
|
251.1
|
|
|
227.8
|
|
|
Mail
choice(2)
|
|
20.3
|
|
|
19.8
|
|
|
Pharmacy
network(3)
|
|
230.8
|
|
|
208.0
|
|
|
Generic dispensing
rate(1):
|
|
|
|
|
|
Total
|
|
83.5
|
%
|
|
82.0
|
%
|
|
Mail
choice(2)
|
|
76.1
|
%
|
|
73.9
|
%
|
|
Pharmacy
network(3)
|
|
84.1
|
%
|
|
82.8
|
%
|
|
Mail choice
penetration rate
|
|
19.8
|
%
|
|
21.2
|
%
|
|
|
|
(1)
|
Pharmacy network net
revenues, claims processed and generic dispensing rates do not
include Maintenance Choice, which are included within the mail
choice category.
|
|
(2)
|
Mail choice is
defined as claims filled at a Pharmacy Services mail facility,
which include specialty mail claims, as well as 90-day claims
filled at retail under the Maintenance Choice program.
|
|
(3)
|
Pharmacy network is
defined as claims filled at retail pharmacies, including our retail
drugstores, but excluding Maintenance Choice activity.
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
|
Retail Pharmacy
Segment
|
|
|
The following table
summarizes the Retail Pharmacy Segment's performance for the
respective periods:
|
|
|
|
Three Months Ended
March 31,
|
|
In millions
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net
revenues
|
|
$
|
16,951
|
|
|
$
|
16,480
|
|
|
Gross
profit
|
|
5,295
|
|
|
5,184
|
|
|
Gross profit % of net
revenues
|
|
31.2
|
%
|
|
31.5
|
%
|
|
Operating
expenses
|
|
3,568
|
|
|
3,434
|
|
|
Operating expense %
of net revenues
|
|
21.0
|
%
|
|
20.8
|
%
|
|
Operating
profit
|
|
1,727
|
|
|
1,750
|
|
|
Operating profit % of
net revenues
|
|
10.2
|
%
|
|
10.6
|
%
|
|
Retail prescriptions
filled (90 Day = 3 Rx) (1)
|
|
241.3
|
|
|
227.1
|
|
|
Net revenue
increase:
|
|
|
|
|
|
Total
|
|
2.9
|
%
|
|
2.7
|
%
|
|
Pharmacy
|
|
5.3
|
%
|
|
5.1
|
%
|
|
Front
store
|
|
(3.6)
|
%
|
|
(2.4)
|
%
|
|
Total prescription
volume (90 Day = 3 Rx) (1)
|
|
6.3
|
%
|
|
2.7
|
%
|
|
Same store increase
(decrease)(2):
|
|
|
|
|
|
Total
sales
|
|
1.2
|
%
|
|
1.4
|
%
|
|
Pharmacy
sales
|
|
4.2
|
%
|
|
3.8
|
%
|
|
Front store
sales(3)
|
|
(6.1)
|
%
|
|
(3.8)
|
%
|
|
Prescription volume
(90 Day = 3 Rx) (1)
|
|
5.1
|
%
|
|
2.1
|
%
|
|
Generic dispensing
rate
|
|
84.4
|
%
|
|
82.9
|
%
|
|
Pharmacy % of total
revenues
|
|
71.7
|
%
|
|
70.5
|
%
|
|
Third party % of
pharmacy revenue
|
|
98.5
|
%
|
|
98.3
|
%
|
|
|
|
(1)
|
Includes the
adjustment to convert 90-day, non-specialty prescriptions to the
equivalent of three 30-day prescriptions. This adjustment reflects
the fact that these prescriptions include approximately three times
the amount of product days supplied compared to a normal
prescription.
|
|
(2)
|
Same store sales
exclude revenues from MinuteClinic and stores in Brazil.
|
|
(3)
|
On a comparable
basis, front store same store sales would have been approximately
800 basis points higher for the three months ended March 31, 2015
if tobacco and the estimated associated basket sales were excluded
from the three months ended March 31, 2014.
|
|
Adjusted Earnings
Per Share Guidance
|
|
(Unaudited)
|
|
|
The following
reconciliation of estimated income before income tax provision to
estimated adjusted earnings per share contains forward-looking
information. All forward-looking information involves risks and
uncertainties. Actual results may differ materially from those
contemplated by the forward-looking information for a number of
reasons as described in our Securities and Exchange Commission
filings, including those set forth in the Risk Factors section and
under the section entitled "Cautionary Statement Concerning
Forward-Looking Statements" in our most recently filed Annual
Report on Form 10-K and Quarterly Report on Form 10-Q. For internal
comparisons, management finds it useful to assess year-over-year
performance by adjusting diluted earnings per share for
amortization, which primarily relates to acquisition
activities.
|
|
|
In millions, except per share amounts
|
|
Year
Ending
December 31, 2015
|
|
|
|
|
|
|
Income before income
tax provision
|
|
$
|
8,942
|
|
|
$
|
9,136
|
|
|
Amortization
|
|
520
|
|
|
520
|
|
|
Adjusted income
before income tax provision
|
|
9,462
|
|
|
9,656
|
|
|
Adjusted income tax
provision and other(1)
|
|
3,751
|
|
|
3,818
|
|
|
Adjusted income from
continuing operations
|
|
$
|
5,711
|
|
|
$
|
5,838
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
1,124
|
|
|
1,124
|
|
|
Adjusted earnings per
share from continuing operations
|
|
$
|
5.08
|
|
|
$
|
5.19
|
|
|
|
|
In millions, except per share amounts
|
|
Three Months
Ending
June 30, 2015
|
|
|
|
|
|
|
Income before income
tax provision
|
|
$
|
2,069
|
|
|
$
|
2,126
|
|
|
Amortization
|
|
130
|
|
|
130
|
|
|
Adjusted income
before income tax provision
|
|
2,199
|
|
|
2,256
|
|
|
Adjusted income tax
provision and other(1)
|
|
874
|
|
|
898
|
|
|
Adjusted income from
continuing operations
|
|
$
|
1,325
|
|
|
$
|
1,358
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
1,133
|
|
|
1,133
|
|
|
Adjusted earnings per
share from continuing operations
|
|
$
|
1.17
|
|
|
$
|
1.20
|
|
|
|
(1) Other includes
earnings allocated to participating securities.
|
|
Free Cash Flow
Guidance
|
|
(Unaudited)
|
|
|
The following
reconciliation of net cash provided by operating activities to free
cash flow contains forward-looking information. All forward-looking
information involves risks and uncertainties. Actual results may
differ materially from those contemplated by the forward-looking
information for a number of reasons as described in our Securities
and Exchange Commission filings, including those set forth in the
Risk Factors section and under the section entitled "Cautionary
Statement Concerning Forward-Looking Statements" in our most
recently filed Annual Report on Form 10-K and Quarterly Report on
Form 10-Q. For internal comparisons, management finds it useful to
assess year-over-year cash flow performance by adjusting cash
provided by operating activities, by capital expenditures and
proceeds from sale-leaseback transactions.
|
|
|
In millions
|
|
Year
Ending
December 31, 2015
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
7,550
|
|
|
$
|
7,949
|
|
|
Subtract: Additions
to property and equipment
|
|
(2,300)
|
|
|
(2,200)
|
|
|
Add: Proceeds from
sale-leaseback transactions
|
|
600
|
|
|
500
|
|
|
Free cash
flow
|
|
$
|
5,850
|
|
|
$
|
6,249
|
|
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SOURCE CVS Health Corporation