Date of Report (Date of earliest event reported): |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
99.1 | ||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
CVS HEALTH CORPORATION | |||||||||||
Date: | August 2, 2023 | By: | /s/ Shawn M. Guertin | ||||||||
Shawn M. Guertin | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
CVS Health reports second quarter results | ||||||||
WOONSOCKET, RHODE ISLAND, August 2, 2023 - CVS Health Corporation® (NYSE: CVS) today announced operating results for the three months ended June 30, 2023. |
Second quarter highlights | Key financial data |
Year-to-date highlights |
Three Months Ended June 30, | |||||||||||||||||
In millions, except per share amounts | 2023 | 2022 | Change | ||||||||||||||
Total revenues | $ | 88,921 | $ | 80,636 | $ | 8,285 | |||||||||||
Operating income | 3,234 | 4,669 | (1,435) | ||||||||||||||
Adjusted operating income (1) | 4,481 | 5,002 | (521) | ||||||||||||||
Diluted earnings per share | $ | 1.48 | $ | 2.29 | $ | (0.81) | |||||||||||
Adjusted EPS (2) | $ | 2.21 | $ | 2.53 | $ | (0.32) |
Note: Financial information for the three and six months ended June 30, 2022 throughout this press release has been revised to conform with certain current period financial statement changes as described on page 16. | |||||
2023 Full-year guidance | |||||
•Revised GAAP diluted EPS guidance range to $6.53 to $6.75 from $6.90 to $7.12 •Confirmed Adjusted EPS guidance range of $8.50 to $8.70 •Confirmed cash flow from operations guidance range of $12.5 billion to $13.5 billion |
CEO Commentary | “Our diversified business model delivered strong results this quarter. We continue to execute on our strategy to expand access to health services across our care delivery channels and strengthen our engagement with consumers to improve their health and well-being.” -Karen S. Lynch, CVS Health President and CEO |
In the spotlight |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions, except per share amounts | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 88,921 | $ | 80,636 | $ | 8,285 | $ | 174,199 | $ | 157,462 | $ | 16,737 | |||||||||||||||||||||||
Operating income | 3,234 | 4,669 | (1,435) | 6,680 | 8,214 | (1,534) | |||||||||||||||||||||||||||||
Adjusted operating income (1) | 4,481 | 5,002 | (521) | 8,851 | 9,609 | (758) | |||||||||||||||||||||||||||||
Net income | 1,914 | 3,039 | (1,125) | 4,056 | 5,394 | (1,338) | |||||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.48 | $ | 2.29 | $ | (0.81) | $ | 3.13 | $ | 4.06 | $ | (0.93) | |||||||||||||||||||||||
Adjusted EPS (2) | $ | 2.21 | $ | 2.53 | $ | (0.32) | $ | 4.41 | $ | 4.82 | $ | (0.41) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions, except percentages | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 26,747 | $ | 22,741 | $ | 4,006 | $ | 52,624 | $ | 45,835 | $ | 6,789 | |||||||||||||||||||||||
Adjusted operating income (1) | 1,541 | 1,923 | (382) | 3,365 | 3,784 | (419) | |||||||||||||||||||||||||||||
Medical benefit ratio (“MBR”) (3) | 86.2 | % | 82.7 | % | 3.5 | % | 85.4 | % | 83.0 | % | 2.4 | % | |||||||||||||||||||||||
Medical membership (4) | 25.6 | 24.4 | 1.2 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 46,215 | $ | 42,938 | $ | 3,277 | $ | 90,806 | $ | 82,553 | $ | 8,253 | |||||||||||||||||||||||
Adjusted operating income (1) | 1,894 | 1,830 | 64 | 3,574 | 3,301 | 273 | |||||||||||||||||||||||||||||
Pharmacy claims processed (5) (6) | 576.6 | 583.8 | (7.2) | 1,163.9 | 1,150.3 | 13.6 | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions | 2023 | 2022 | Change | 2023 | 2022 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 28,784 | $ | 26,746 | $ | 2,038 | $ | 56,706 | $ | 52,644 | $ | 4,062 | |||||||||||||||||||||||
Adjusted operating income (1) | 1,413 | 1,710 | (297) | 2,547 | 3,283 | (736) | |||||||||||||||||||||||||||||
Prescriptions filled (5) (6) | 405.7 | 401.3 | 4.4 | 810.5 | 796.4 | 14.1 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
In millions, except per share amounts | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Products | $ | 60,539 | $ | 56,794 | $ | 118,686 | $ | 109,316 | |||||||||||||||
Premiums | 25,108 | 21,260 | 49,460 | 42,891 | |||||||||||||||||||
Services | 3,000 | 2,436 | 5,445 | 4,941 | |||||||||||||||||||
Net investment income | 274 | 146 | 608 | 314 | |||||||||||||||||||
Total revenues | 88,921 | 80,636 | 174,199 | 157,462 | |||||||||||||||||||
Operating costs: | |||||||||||||||||||||||
Cost of products sold | 53,536 | 49,290 | 104,991 | 94,799 | |||||||||||||||||||
Health care costs | 21,782 | 17,490 | 42,230 | 35,413 | |||||||||||||||||||
Restructuring charge | 496 | — | 496 | — | |||||||||||||||||||
Opioid litigation charge | — | — | — | 484 | |||||||||||||||||||
Loss on assets held for sale | — | — | 349 | 41 | |||||||||||||||||||
Operating expenses | 9,873 | 9,187 | 19,453 | 18,511 | |||||||||||||||||||
Total operating costs | 85,687 | 75,967 | 167,519 | 149,248 | |||||||||||||||||||
Operating income | 3,234 | 4,669 | 6,680 | 8,214 | |||||||||||||||||||
Interest expense | 686 | 583 | 1,275 | 1,169 | |||||||||||||||||||
Other income | (22) | (43) | (44) | (85) | |||||||||||||||||||
Income before income tax provision | 2,570 | 4,129 | 5,449 | 7,130 | |||||||||||||||||||
Income tax provision | 656 | 1,090 | 1,393 | 1,736 | |||||||||||||||||||
Net income | 1,914 | 3,039 | 4,056 | 5,394 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (13) | (10) | (19) | (11) | |||||||||||||||||||
Net income attributable to CVS Health | $ | 1,901 | $ | 3,029 | $ | 4,037 | $ | 5,383 | |||||||||||||||
Net income per share attributable to CVS Health: | |||||||||||||||||||||||
Basic | $ | 1.48 | $ | 2.31 | $ | 3.15 | $ | 4.10 | |||||||||||||||
Diluted | $ | 1.48 | $ | 2.29 | $ | 3.13 | $ | 4.06 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 1,283 | 1,313 | 1,283 | 1,312 | |||||||||||||||||||
Diluted | 1,287 | 1,321 | 1,289 | 1,325 | |||||||||||||||||||
Dividends declared per share | $ | 0.605 | $ | 0.55 | $ | 1.21 | $ | 1.10 |
In millions | June 30, 2023 | December 31, 2022 | |||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 13,807 | $ | 12,945 | |||||||
Investments | 3,080 | 2,778 | |||||||||
Accounts receivable, net | 29,546 | 27,276 | |||||||||
Inventories | 17,291 | 19,090 | |||||||||
Assets held for sale | 620 | 908 | |||||||||
Other current assets | 3,412 | 2,636 | |||||||||
Total current assets | 67,756 | 65,633 | |||||||||
Long-term investments | 22,114 | 21,096 | |||||||||
Property and equipment, net | 13,001 | 12,873 | |||||||||
Operating lease right-of-use assets | 17,703 | 17,872 | |||||||||
Goodwill | 91,260 | 78,150 | |||||||||
Intangible assets, net | 30,118 | 24,803 | |||||||||
Separate accounts assets | 3,267 | 3,228 | |||||||||
Other assets | 4,852 | 4,620 | |||||||||
Total assets | $ | 250,071 | $ | 228,275 | |||||||
Liabilities: | |||||||||||
Accounts payable | $ | 13,367 | $ | 14,838 | |||||||
Pharmacy claims and discounts payable | 20,417 | 19,423 | |||||||||
Health care costs payable | 11,998 | 10,142 | |||||||||
Policyholders’ funds | 1,411 | 1,500 | |||||||||
Accrued expenses | 22,831 | 18,745 | |||||||||
Other insurance liabilities | 4,866 | 1,089 | |||||||||
Current portion of operating lease liabilities | 1,706 | 1,678 | |||||||||
Short-term debt | 1,000 | — | |||||||||
Current portion of long-term debt | 1,402 | 1,778 | |||||||||
Liabilities held for sale | 208 | 228 | |||||||||
Total current liabilities | 79,206 | 69,421 | |||||||||
Long-term operating lease liabilities | 16,609 | 16,800 | |||||||||
Long-term debt | 61,419 | 50,476 | |||||||||
Deferred income taxes | 4,588 | 4,016 | |||||||||
Separate accounts liabilities | 3,267 | 3,228 | |||||||||
Other long-term insurance liabilities | 5,659 | 5,835 | |||||||||
Other long-term liabilities | 6,321 | 6,730 | |||||||||
Total liabilities | 177,069 | 156,506 | |||||||||
Shareholders’ equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock and capital surplus | 48,649 | 48,193 | |||||||||
Treasury stock | (33,933) | (31,858) | |||||||||
Retained earnings | 58,868 | 56,398 | |||||||||
Accumulated other comprehensive loss | (858) | (1,264) | |||||||||
Total CVS Health shareholders’ equity | 72,726 | 71,469 | |||||||||
Noncontrolling interests | 276 | 300 | |||||||||
Total shareholders’ equity | 73,002 | 71,769 | |||||||||
Total liabilities and shareholders’ equity | $ | 250,071 | $ | 228,275 |
Six Months Ended June 30, | |||||||||||
In millions | 2023 | 2022 | |||||||||
Cash flows from operating activities: | |||||||||||
Cash receipts from customers | $ | 175,567 | $ | 151,769 | |||||||
Cash paid for prescriptions dispensed and health services rendered | (101,318) | (90,887) | |||||||||
Insurance benefits paid | (41,108) | (33,920) | |||||||||
Cash paid to other suppliers and employees | (17,686) | (15,119) | |||||||||
Interest and investment income received | 801 | 200 | |||||||||
Interest paid | (1,131) | (1,150) | |||||||||
Income taxes paid | (1,779) | (1,887) | |||||||||
Net cash provided by operating activities | 13,346 | 9,006 | |||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sales and maturities of investments | 3,640 | 4,360 | |||||||||
Purchases of investments | (4,499) | (5,010) | |||||||||
Purchases of property and equipment | (1,575) | (1,459) | |||||||||
Acquisitions (net of cash and restricted cash acquired) | (16,474) | (125) | |||||||||
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,807 in 2022) | — | (1,943) | |||||||||
Other | 32 | 54 | |||||||||
Net cash used in investing activities | (18,876) | (4,123) | |||||||||
Cash flows from financing activities: | |||||||||||
Commercial paper borrowings (repayments), net | 1,000 | — | |||||||||
Proceeds from issuance of short-term loan | 5,000 | — | |||||||||
Repayment of short-term loan | (5,000) | — | |||||||||
Proceeds from issuance of long-term debt | 10,898 | — | |||||||||
Repayments of long-term debt | (1,787) | (1,529) | |||||||||
Repurchase of common stock | (2,016) | (2,000) | |||||||||
Dividends paid | (1,574) | (1,462) | |||||||||
Proceeds from exercise of stock options | 120 | 348 | |||||||||
Payments for taxes related to net share settlement of equity awards | (168) | (329) | |||||||||
Other | (121) | (139) | |||||||||
Net cash provided by (used in) financing activities | 6,352 | (5,111) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 822 | (228) | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 13,305 | 12,691 | |||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 14,127 | $ | 12,463 |
Six Months Ended June 30, | |||||||||||
In millions | 2023 | 2022 | |||||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Net income | $ | 4,056 | $ | 5,394 | |||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 2,105 | 2,131 | |||||||||
Stock-based compensation | 307 | 236 | |||||||||
Gain on sale of subsidiary | — | (225) | |||||||||
Deferred income taxes and other noncash items | 87 | (246) | |||||||||
Change in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
Accounts receivable, net | (804) | (2,687) | |||||||||
Inventories | 1,800 | 469 | |||||||||
Other assets | (913) | (286) | |||||||||
Accounts payable and pharmacy claims and discounts payable | (118) | 2,033 | |||||||||
Health care costs payable and other insurance liabilities | 4,334 | 1,286 | |||||||||
Other liabilities | 2,492 | 901 | |||||||||
Net cash provided by operating activities | $ | 13,346 | $ | 9,006 |
Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 1,160 | $ | 1,767 | $ | 1,349 | $ | (1,042) | $ | 3,234 | |||||||||||||||||||
Amortization of intangible assets | 294 | 125 | 65 | 1 | 485 | ||||||||||||||||||||||||
Net realized capital (gains) losses | 78 | — | (1) | 21 | 98 | ||||||||||||||||||||||||
Acquisition-related transaction and integration costs | — | — | — | 157 | 157 | ||||||||||||||||||||||||
Restructuring charge | — | — | — | 496 | 496 | ||||||||||||||||||||||||
Office real estate optimization charges | 9 | 2 | — | — | 11 | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 1,541 | $ | 1,894 | $ | 1,413 | $ | (367) | $ | 4,481 |
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 1,785 | $ | 1,789 | $ | 1,570 | $ | (475) | $ | 4,669 | |||||||||||||||||||
Amortization of intangible assets | 296 | 41 | 122 | 1 | 460 | ||||||||||||||||||||||||
Net realized capital losses | 67 | — | 18 | 13 | 98 | ||||||||||||||||||||||||
Gain on divestiture of subsidiary | (225) | — | — | — | (225) | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 1,923 | $ | 1,830 | $ | 1,710 | $ | (461) | $ | 5,002 |
Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 2,568 | $ | 3,405 | $ | 2,066 | $ | (1,359) | $ | 6,680 | |||||||||||||||||||
Amortization of intangible assets | 589 | 166 | 130 | 2 | 887 | ||||||||||||||||||||||||
Net realized capital losses | 177 | — | 2 | 24 | 203 | ||||||||||||||||||||||||
Acquisition-related transaction and integration costs | — | — | — | 200 | 200 | ||||||||||||||||||||||||
Restructuring charge | — | — | — | 496 | 496 | ||||||||||||||||||||||||
Office real estate optimization charges | 31 | 3 | — | 2 | 36 | ||||||||||||||||||||||||
Loss on assets held for sale | — | — | 349 | — | 349 | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 3,365 | $ | 3,574 | $ | 2,547 | $ | (635) | $ | 8,851 | |||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 3,252 | $ | 3,216 | $ | 3,005 | $ | (1,259) | $ | 8,214 | |||||||||||||||||||
Amortization of intangible assets | 591 | 85 | 244 | 2 | 922 | ||||||||||||||||||||||||
Net realized capital losses | 125 | — | 34 | 14 | 173 | ||||||||||||||||||||||||
Loss on assets held for sale | 41 | — | — | — | 41 | ||||||||||||||||||||||||
Gain on divestiture of subsidiary | (225) | — | — | — | (225) | ||||||||||||||||||||||||
Opioid litigation charge | — | — | — | 484 | 484 | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 3,784 | $ | 3,301 | $ | 3,283 | $ | (759) | $ | 9,609 |
Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | ||||||||||||||||||||||
In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | |||||||||||||||||||
Net income attributable to CVS Health (GAAP measure) | $ | 1,901 | $ | 1.48 | $ | 3,029 | $ | 2.29 | |||||||||||||||
Amortization of intangible assets | 485 | 0.38 | 460 | 0.35 | |||||||||||||||||||
Net realized capital losses | 98 | 0.08 | 98 | 0.07 | |||||||||||||||||||
Acquisition-related transaction and integration costs | 157 | 0.12 | — | — | |||||||||||||||||||
Restructuring charge | 496 | 0.38 | — | — | |||||||||||||||||||
Office real estate optimization charges | 11 | 0.01 | — | — | |||||||||||||||||||
Gain on divestiture of subsidiary | — | — | (225) | (0.17) | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (303) | (0.24) | (25) | (0.01) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 2,845 | $ | 2.21 | $ | 3,337 | $ | 2.53 | |||||||||||||||
Weighted average diluted shares outstanding | 1,287 | 1,321 | |||||||||||||||||||||
Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | ||||||||||||||||||||||
In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | |||||||||||||||||||
Net income attributable to CVS Health (GAAP measure) | $ | 4,037 | $ | 3.13 | $ | 5,383 | $ | 4.06 | |||||||||||||||
Amortization of intangible assets | 887 | 0.69 | 922 | 0.70 | |||||||||||||||||||
Net realized capital losses | 203 | 0.16 | 173 | 0.13 | |||||||||||||||||||
Acquisition-related transaction and integration costs | 200 | 0.16 | — | — | |||||||||||||||||||
Restructuring charge | 496 | 0.38 | — | — | |||||||||||||||||||
Office real estate optimization charges | 36 | 0.03 | — | — | |||||||||||||||||||
Loss on assets held for sale | 349 | 0.27 | 41 | 0.03 | |||||||||||||||||||
Gain on divestiture of subsidiary | — | — | (225) | (0.17) | |||||||||||||||||||
Opioid litigation charge | — | — | 484 | 0.36 | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (524) | (0.41) | (393) | (0.29) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 5,684 | $ | 4.41 | $ | 6,385 | $ | 4.82 | |||||||||||||||
Weighted average diluted shares outstanding | 1,289 | 1,325 | |||||||||||||||||||||
In millions | Health Care Benefits | Health Services (a) | Pharmacy & Consumer Wellness | Corporate/ Other | Intersegment Eliminations (b) | Consolidated Totals | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2023 | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 26,747 | $ | 46,215 | $ | 28,784 | $ | 83 | $ | (12,908) | $ | 88,921 | |||||||||||||||||||||||
Adjusted operating income (loss) (1) | 1,541 | 1,894 | 1,413 | (367) | — | 4,481 | |||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||
Total revenues, as previously reported | $ | 22,756 | $ | 42,812 | $ | 26,286 | $ | 110 | $ | (11,328) | $ | 80,636 | |||||||||||||||||||||||
Adjustments | (15) | 126 | 460 | — | (571) | — | |||||||||||||||||||||||||||||
Total revenues, as adjusted | $ | 22,741 | $ | 42,938 | $ | 26,746 | $ | 110 | $ | (11,899) | $ | 80,636 | |||||||||||||||||||||||
Adjusted operating income (loss), as previously reported | $ | 1,831 | $ | 1,855 | $ | 1,862 | $ | (555) | $ | (183) | $ | 4,810 | |||||||||||||||||||||||
Adjustments | 92 | (25) | (152) | 94 | 183 | 192 | |||||||||||||||||||||||||||||
Adjusted operating income (loss), as adjusted (1) | $ | 1,923 | $ | 1,830 | $ | 1,710 | $ | (461) | $ | — | $ | 5,002 | |||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2023 | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 52,624 | $ | 90,806 | $ | 56,706 | $ | 271 | $ | (26,208) | $ | 174,199 | |||||||||||||||||||||||
Adjusted operating income (loss) (1) | 3,365 | 3,574 | 2,547 | (635) | — | 8,851 | |||||||||||||||||||||||||||||
June 30, 2022 | |||||||||||||||||||||||||||||||||||
Total revenues, as previously reported | $ | 45,865 | $ | 82,273 | $ | 51,704 | $ | 236 | $ | (22,616) | $ | 157,462 | |||||||||||||||||||||||
Adjustments | (30) | 280 | 940 | — | (1,190) | — | |||||||||||||||||||||||||||||
Total revenues, as adjusted | $ | 45,835 | $ | 82,553 | $ | 52,644 | $ | 236 | $ | (23,806) | $ | 157,462 | |||||||||||||||||||||||
Adjusted operating income (loss), as previously reported | $ | 3,582 | $ | 3,491 | $ | 3,467 | $ | (860) | $ | (387) | $ | 9,293 | |||||||||||||||||||||||
Adjustments | 202 | (190) | (184) | 101 | 387 | 316 | |||||||||||||||||||||||||||||
Adjusted operating income (loss), as adjusted (1) | $ | 3,784 | $ | 3,301 | $ | 3,283 | $ | (759) | $ | — | $ | 9,609 |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2023 vs 2022 | Six Months Ended June 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages and basis points (“bps”) | 2023 | 2022 | 2023 | 2022 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums | $ | 25,095 | $ | 21,245 | $ | 49,434 | $ | 42,859 | $ | 3,850 | 18.1 | % | $ | 6,575 | 15.3 | % | |||||||||||||||||||||||||||||||
Services | 1,447 | 1,408 | 2,821 | 2,799 | 39 | 2.8 | % | 22 | 0.8 | % | |||||||||||||||||||||||||||||||||||||
Net investment income | 205 | 88 | 369 | 177 | 117 | 133.0 | % | 192 | 108.5 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 26,747 | 22,741 | 52,624 | 45,835 | 4,006 | 17.6 | % | 6,789 | 14.8 | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 21,620 | 17,569 | 42,215 | 35,588 | 4,051 | 23.1 | % | 6,627 | 18.6 | % | |||||||||||||||||||||||||||||||||||||
MBR (Health care costs as a % of premium revenues) (3) | 86.2 | % | 82.7 | % | 85.4 | % | 83.0 | % | 350 | bps | 240 | bps | |||||||||||||||||||||||||||||||||||
Loss on assets held for sale | $ | — | $ | — | $ | — | $ | 41 | $ | — | — | % | $ | (41) | (100.0) | % | |||||||||||||||||||||||||||||||
Operating expenses | 3,967 | 3,387 | 7,841 | 6,954 | 580 | 17.1 | % | 887 | 12.8 | % | |||||||||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 14.8 | % | 14.9 | % | 14.9 | % | 15.2 | % | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,160 | $ | 1,785 | $ | 2,568 | $ | 3,252 | $ | (625) | (35.0) | % | $ | (684) | (21.0) | % | |||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 4.3 | % | 7.8 | % | 4.9 | % | 7.1 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 1,541 | $ | 1,923 | $ | 3,365 | $ | 3,784 | $ | (382) | (19.9) | % | $ | (419) | (11.1) | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 5.8 | % | 8.5 | % | 6.4 | % | 8.3 | % | |||||||||||||||||||||||||||||||||||||||
Premium revenues (by business): | |||||||||||||||||||||||||||||||||||||||||||||||
Government | $ | 17,944 | $ | 15,751 | $ | 35,472 | $ | 31,946 | $ | 2,193 | 13.9 | % | $ | 3,526 | 11.0 | % | |||||||||||||||||||||||||||||||
Commercial | 7,151 | 5,494 | 13,962 | 10,913 | 1,657 | 30.2 | % | 3,049 | 27.9 | % |
June 30, 2023 | March 31, 2023 | December 31, 2022 | June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In thousands | Insured | ASC | Total | Insured | ASC | Total | Insured | ASC | Total | Insured | ASC | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical membership: (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 4,033 | 14,114 | 18,147 | 3,949 | 14,039 | 17,988 | 3,136 | 13,896 | 17,032 | 3,158 | 13,835 | 16,993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Advantage | 3,408 | — | 3,408 | 3,387 | — | 3,387 | 3,270 | — | 3,270 | 3,216 | — | 3,216 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Supplement | 1,351 | — | 1,351 | 1,344 | — | 1,344 | 1,363 | — | 1,363 | 1,314 | — | 1,314 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicaid | 2,261 | 467 | 2,728 | 2,293 | 501 | 2,794 | 2,234 | 497 | 2,731 | 2,425 | 484 | 2,909 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total medical membership | 11,053 | 14,581 | 25,634 | 10,973 | 14,540 | 25,513 | 10,003 | 14,393 | 24,396 | 10,113 | 14,319 | 24,432 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental membership information: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Prescription Drug Plan (standalone) | 6,094 | 6,112 | 6,128 | 6,051 |
June 30, 2023 | March 31, 2023 | December 31, 2022 | June 30, 2022 | ||||||||||||||||||||
Days Claims Payable (7) | 46.9 | 48.1 | 51.3 | 53.4 |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2023 vs 2022 | Six Months Ended June 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2023 | 2022 | 2023 | 2022 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Products | $ | 44,681 | $ | 42,250 | $ | 88,352 | $ | 81,149 | $ | 2,431 | 5.8 | % | $ | 7,203 | 8.9 | % | |||||||||||||||||||||||||||||||
Services | 1,534 | 688 | 2,454 | 1,404 | 846 | 123.0 | % | 1,050 | 74.8 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 46,215 | 42,938 | 90,806 | 82,553 | 3,277 | 7.6 | % | 8,253 | 10.0 | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | 43,271 | 40,585 | 85,687 | 78,207 | 2,686 | 6.6 | % | 7,480 | 9.6 | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 383 | — | 383 | — | 383 | 100.0 | % | 383 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Gross profit (8) | 2,561 | 2,353 | 4,736 | 4,346 | 208 | 8.8 | % | 390 | 9.0 | % | |||||||||||||||||||||||||||||||||||||
Gross margin (Gross profit as a % of total revenues) (8) | 5.5 | % | 5.5 | % | 5.2 | % | 5.3 | % | |||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | 794 | $ | 564 | $ | 1,331 | $ | 1,130 | $ | 230 | 40.8 | % | $ | 201 | 17.8 | % | |||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 1.7 | % | 1.3 | % | 1.5 | % | 1.4 | % | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,767 | $ | 1,789 | $ | 3,405 | $ | 3,216 | $ | (22) | (1.2) | % | $ | 189 | 5.9 | % | |||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 3.8 | % | 4.2 | % | 3.7 | % | 3.9 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 1,894 | $ | 1,830 | $ | 3,574 | $ | 3,301 | $ | 64 | 3.5 | % | $ | 273 | 8.3 | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 4.1 | % | 4.3 | % | 3.9 | % | 4.0 | % | |||||||||||||||||||||||||||||||||||||||
Revenues (by distribution channel): | |||||||||||||||||||||||||||||||||||||||||||||||
Pharmacy network (9) | $ | 27,477 | $ | 25,896 | $ | 55,069 | $ | 50,024 | $ | 1,581 | 6.1 | % | $ | 5,045 | 10.1 | % | |||||||||||||||||||||||||||||||
Mail & specialty (10) | 17,229 | 16,283 | 33,374 | 30,951 | 946 | 5.8 | % | 2,423 | 7.8 | % | |||||||||||||||||||||||||||||||||||||
Other | 1,509 | 759 | 2,363 | 1,578 | 750 | 98.8 | % | 785 | 49.7 | % | |||||||||||||||||||||||||||||||||||||
Pharmacy claims processed (5) (6) (a) | 576.6 | 583.8 | 1,163.9 | 1,150.3 | (7.2) | (1.2) | % | 13.6 | 1.2 | % | |||||||||||||||||||||||||||||||||||||
Generic dispensing rate (6) (11) (b) | 88.3 | % | 88.0 | % | 88.4 | % | 87.9 | % | |||||||||||||||||||||||||||||||||||||||
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2023 vs 2022 | Six Months Ended June 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2023 | 2022 | 2023 | 2022 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Products | $ | 28,141 | $ | 25,870 | $ | 55,399 | $ | 50,774 | $ | 2,271 | 8.8 | % | $ | 4,625 | 9.1 | % | |||||||||||||||||||||||||||||||
Services | 642 | 894 | 1,309 | 1,904 | (252) | (28.2) | % | (595) | (31.3) | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 1 | (18) | (2) | (34) | 19 | 105.6 | % | 32 | 94.1 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 28,784 | 26,746 | 56,706 | 52,644 | 2,038 | 7.6 | % | 4,062 | 7.7 | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | 22,628 | 20,181 | 44,504 | 39,563 | 2,447 | 12.1 | % | 4,941 | 12.5 | % | |||||||||||||||||||||||||||||||||||||
Gross profit (8) | 6,156 | 6,565 | 12,202 | 13,081 | (409) | (6.2) | % | (879) | (6.7) | % | |||||||||||||||||||||||||||||||||||||
Gross margin (Gross profit as a % of total revenues) (8) | 21.4 | % | 24.5 | % | 21.5 | % | 24.8 | % | |||||||||||||||||||||||||||||||||||||||
Loss on assets held for sale | $ | — | $ | — | $ | 349 | $ | — | $ | — | — | % | $ | 349 | 100.0 | % | |||||||||||||||||||||||||||||||
Operating expenses | 4,807 | 4,995 | 9,787 | 10,076 | (188) | (3.8) | % | (289) | (2.9) | % | |||||||||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 16.7 | % | 18.7 | % | 17.3 | % | 19.1 | % | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,349 | $ | 1,570 | $ | 2,066 | $ | 3,005 | $ | (221) | (14.1) | % | $ | (939) | (31.2) | % | |||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 4.7 | % | 5.9 | % | 3.6 | % | 5.7 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 1,413 | $ | 1,710 | $ | 2,547 | $ | 3,283 | $ | (297) | (17.4) | % | $ | (736) | (22.4) | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 4.9 | % | 6.4 | % | 4.5 | % | 6.2 | % | |||||||||||||||||||||||||||||||||||||||
Revenues (by major goods/service lines): | |||||||||||||||||||||||||||||||||||||||||||||||
Pharmacy | $ | 22,614 | $ | 20,442 | $ | 44,394 | $ | 40,412 | $ | 2,172 | 10.6 | % | $ | 3,982 | 9.9 | % | |||||||||||||||||||||||||||||||
Front Store | 5,629 | 5,736 | 11,226 | 11,049 | (107) | (1.9) | % | 177 | 1.6 | % | |||||||||||||||||||||||||||||||||||||
Other | 540 | 586 | 1,088 | 1,217 | (46) | (7.8) | % | (129) | (10.6) | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 1 | (18) | (2) | (34) | 19 | 105.6 | % | 32 | 94.1 | % | |||||||||||||||||||||||||||||||||||||
Prescriptions filled (5) (6) (a) | 405.7 | 401.3 | 810.5 | 796.4 | 4.4 | 1.1 | % | 14.1 | 1.8 | % | |||||||||||||||||||||||||||||||||||||
Same store sales increase (decrease): (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 10.9 | % | 8.1 | % | 11.3 | % | 9.4 | % | |||||||||||||||||||||||||||||||||||||||
Pharmacy | 14.3 | % | 7.6 | % | 13.5 | % | 8.8 | % | |||||||||||||||||||||||||||||||||||||||
Front Store | (0.3) | % | 9.9 | % | 3.5 | % | 11.8 | % | |||||||||||||||||||||||||||||||||||||||
Prescription volume (6) | 3.6 | % | 3.1 | % | 4.3 | % | 4.5 | % | |||||||||||||||||||||||||||||||||||||||
Generic dispensing rate (6) (11) (b) | 89.5 | % | 88.5 | % | 89.5 | % | 88.0 | % |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2023 vs 2022 | Six Months Ended June 30, 2023 vs 2022 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2023 | 2022 | 2023 | 2022 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums | $ | 13 | $ | 15 | $ | 26 | $ | 32 | $ | (2) | (13.3) | % | $ | (6) | (18.8) | % | |||||||||||||||||||||||||||||||
Services | 2 | 19 | 4 | 33 | (17) | (89.5) | % | (29) | (87.9) | % | |||||||||||||||||||||||||||||||||||||
Net investment income | 68 | 76 | 241 | 171 | (8) | (10.5) | % | 70 | 40.9 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 83 | 110 | 271 | 236 | (27) | (24.5) | % | 35 | 14.8 | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | — | 10 | 1 | 20 | (10) | (100.0) | % | (19) | (95.0) | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 50 | 88 | 102 | 149 | (38) | (43.2) | % | (47) | (31.5) | % | |||||||||||||||||||||||||||||||||||||
Restructuring charge | 496 | — | 496 | — | 496 | 100.0 | % | 496 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Opioid litigation charge | — | — | — | 484 | — | — | % | (484) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Operating expenses | 579 | 487 | 1,031 | 842 | 92 | 18.9 | % | 189 | 22.4 | % | |||||||||||||||||||||||||||||||||||||
Operating loss | (1,042) | (475) | (1,359) | (1,259) | (567) | (119.4) | % | (100) | (7.9) | % | |||||||||||||||||||||||||||||||||||||
Adjusted operating loss (1) | (367) | (461) | (635) | (759) | 94 | 20.4 | % | 124 | 16.3 | % |
Six Months Ended June 30, | |||||||||||
In millions | 2023 | 2022 | |||||||||
Health care costs payable, beginning of period | $ | 10,142 | $ | 8,678 | |||||||
Less: Reinsurance recoverables | 5 | 8 | |||||||||
Less: Impact of discount rate on long-duration insurance reserves (a) | 8 | — | |||||||||
Health care costs payable, beginning of period, net | 10,129 | 8,670 | |||||||||
Acquisitions, net | 1,102 | — | |||||||||
Add: Components of incurred health care costs | |||||||||||
Current year | 42,705 | 35,884 | |||||||||
Prior years (b) | (619) | (666) | |||||||||
Total incurred health care costs (c) | 42,086 | 35,218 | |||||||||
Less: Claims paid | |||||||||||
Current year | 32,502 | 26,971 | |||||||||
Prior years | 8,800 | 6,732 | |||||||||
Total claims paid | 41,302 | 33,703 | |||||||||
Add: Premium deficiency reserve | — | 5 | |||||||||
Health care costs payable, end of period, net | 12,015 | 10,190 | |||||||||
Add: Reinsurance recoverables | 5 | 4 | |||||||||
Add: Impact of discount rate on long-duration insurance reserves (a) | (22) | 8 | |||||||||
Health care costs payable, end of period | $ | 11,998 | $ | 10,202 |
Year Ending December 31, 2023 | |||||||||||||||||||||||
Low | High | ||||||||||||||||||||||
In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | |||||||||||||||||||
Net income attributable to CVS Health (GAAP measure) | $ | 8,437 | $ | 6.53 | $ | 8,733 | $ | 6.75 | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Amortization of intangible assets | 1,915 | 1.48 | 1,895 | 1.47 | |||||||||||||||||||
Net realized capital losses | 203 | 0.16 | 203 | 0.16 | |||||||||||||||||||
Acquisition-related transaction and integration costs | 350 | 0.27 | 330 | 0.26 | |||||||||||||||||||
Restructuring charge | 496 | 0.38 | 496 | 0.38 | |||||||||||||||||||
Office real estate optimization charges | 70 | 0.05 | 60 | 0.05 | |||||||||||||||||||
Loss on assets held for sale | 349 | 0.27 | 349 | 0.27 | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (830) | (0.64) | (817) | (0.64) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 10,990 | $ | 8.50 | $ | 11,249 | $ | 8.70 | |||||||||||||||
Weighted average diluted shares outstanding | 1,293 | 1,293 |
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