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 7, 2024 | By: | /s/ Thomas F. Cowhey | ||||||||
Thomas F. Cowhey | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
CVS HEALTH CORPORATION REPORTS SECOND QUARTER 2024 RESULTS AND REVISES FULL-YEAR 2024 GUIDANCE | |||||
Financial Highlights | |||||
•Second quarter total revenues increased to $91.2 billion, up 2.6% compared to the prior year •Second quarter GAAP diluted EPS of $1.41 and Adjusted EPS of $1.83 •Generated year-to-date cash flow from operations of $8.0 billion | |||||
2024 Full-Year Guidance | |||||
•Revised GAAP diluted EPS guidance to a range of $4.95 to $5.20 from at least $5.64 •Revised Adjusted EPS guidance to a range of $6.40 to $6.65 from at least $7.00 •Revised cash flow from operations guidance to approximately $9.0 billion from at least $10.5 billion | |||||
CEO Commentary | |||||
“We have many points of differentiation that position us to win now and into the future. Our innovation is accelerating more transparent pharmacy reimbursement models, increasing the use of biosimilars, and providing better patient outcomes through our connected health care delivery assets. Our integrated model and our strategy are enabling us to execute in a challenging environment and we are delivering the value our customers demand. We are taking action today to ensure we make the most of our many opportunities, including leadership changes in the Health Care Benefits segment.” -Karen S. Lynch, CVS Health President and CEO |
WOONSOCKET, RHODE ISLAND, August 7, 2024 - CVS Health Corporation (NYSE: CVS) today announced operating results for the three months ended June 30, 2024. | |||||
Financial Results Summary | |||||
Three Months Ended June 30, | |||||||||||||||||
In millions, except per share amounts | 2024 | 2023 | Change | ||||||||||||||
Total revenues | $ | 91,234 | $ | 88,921 | $ | 2,313 | |||||||||||
Operating income | 3,045 | 3,234 | (189) | ||||||||||||||
Adjusted operating income (1) | 3,744 | 4,481 | (737) | ||||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 1.48 | $ | (0.07) | |||||||||||
Adjusted EPS (2) | $ | 1.83 | $ | 2.21 | $ | (0.38) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions, except per share amounts | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 91,234 | $ | 88,921 | $ | 2,313 | $ | 179,671 | $ | 174,199 | $ | 5,472 | |||||||||||||||||||||||
Operating income | 3,045 | 3,234 | (189) | 5,316 | 6,680 | (1,364) | |||||||||||||||||||||||||||||
Adjusted operating income (1) | 3,744 | 4,481 | (737) | 6,701 | 8,851 | (2,150) | |||||||||||||||||||||||||||||
Net income | 1,768 | 1,914 | (146) | 2,892 | 4,056 | (1,164) | |||||||||||||||||||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 1.48 | $ | (0.07) | $ | 2.28 | $ | 3.13 | $ | (0.85) | |||||||||||||||||||||||
Adjusted EPS (2) | $ | 1.83 | $ | 2.21 | $ | (0.38) | $ | 3.14 | $ | 4.41 | $ | (1.27) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions, except percentages | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 32,475 | $ | 26,747 | $ | 5,728 | $ | 64,711 | $ | 52,624 | $ | 12,087 | |||||||||||||||||||||||
Adjusted operating income (1) | 938 | 1,541 | (603) | 1,670 | 3,365 | (1,695) | |||||||||||||||||||||||||||||
Medical benefit ratio (“MBR”) (3) | 89.6 | % | 86.2 | % | 3.4 | % | 90.0 | % | 85.4 | % | 4.6 | % | |||||||||||||||||||||||
Medical membership (4) | 27.0 | 25.6 | 1.4 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 42,171 | $ | 46,215 | $ | (4,044) | $ | 82,456 | $ | 90,806 | $ | (8,350) | |||||||||||||||||||||||
Adjusted operating income (1) | 1,915 | 1,894 | 21 | 3,278 | 3,574 | (296) | |||||||||||||||||||||||||||||
Pharmacy claims processed (5) (6) | 471.2 | 576.6 | (105.4) | 934.1 | 1,163.9 | (229.8) | |||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
In millions | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||
Total revenues | $ | 29,838 | $ | 28,784 | $ | 1,054 | $ | 58,563 | $ | 56,706 | $ | 1,857 | |||||||||||||||||||||||
Adjusted operating income (1) | 1,243 | 1,413 | (170) | 2,420 | 2,547 | (127) | |||||||||||||||||||||||||||||
Prescriptions filled (5) (6) | 420.4 | 405.7 | 14.7 | 838.0 | 810.5 | 27.5 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
In millions, except per share amounts | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Products | $ | 56,212 | $ | 60,539 | $ | 109,936 | $ | 118,686 | |||||||||||||||
Premiums | 30,667 | 25,108 | 61,058 | 49,460 | |||||||||||||||||||
Services | 3,961 | 3,000 | 7,829 | 5,445 | |||||||||||||||||||
Net investment income | 394 | 274 | 848 | 608 | |||||||||||||||||||
Total revenues | 91,234 | 88,921 | 179,671 | 174,199 | |||||||||||||||||||
Operating costs: | |||||||||||||||||||||||
Cost of products sold | 49,998 | 53,536 | 98,071 | 104,991 | |||||||||||||||||||
Health care costs | 27,853 | 21,782 | 55,656 | 42,230 | |||||||||||||||||||
Operating expenses | 10,338 | 9,873 | 20,628 | 19,453 | |||||||||||||||||||
Restructuring charge | — | 496 | — | 496 | |||||||||||||||||||
Loss on assets held for sale | — | — | — | 349 | |||||||||||||||||||
Total operating costs | 88,189 | 85,687 | 174,355 | 167,519 | |||||||||||||||||||
Operating income | 3,045 | 3,234 | 5,316 | 6,680 | |||||||||||||||||||
Interest expense | 732 | 686 | 1,448 | 1,275 | |||||||||||||||||||
Other income | (24) | (22) | (49) | (44) | |||||||||||||||||||
Income before income tax provision | 2,337 | 2,570 | 3,917 | 5,449 | |||||||||||||||||||
Income tax provision | 569 | 656 | 1,025 | 1,393 | |||||||||||||||||||
Net income | 1,768 | 1,914 | 2,892 | 4,056 | |||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | 2 | (13) | (9) | (19) | |||||||||||||||||||
Net income attributable to CVS Health | $ | 1,770 | $ | 1,901 | $ | 2,883 | $ | 4,037 | |||||||||||||||
Net income per share attributable to CVS Health: | |||||||||||||||||||||||
Basic | $ | 1.41 | $ | 1.48 | $ | 2.29 | $ | 3.15 | |||||||||||||||
Diluted | $ | 1.41 | $ | 1.48 | $ | 2.28 | $ | 3.13 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 1,256 | 1,283 | 1,258 | 1,283 | |||||||||||||||||||
Diluted | 1,259 | 1,287 | 1,263 | 1,289 | |||||||||||||||||||
Dividends declared per share | $ | 0.665 | $ | 0.605 | $ | 1.33 | $ | 1.21 |
In millions | June 30, 2024 | December 31, 2023 | |||||||||
Assets: | |||||||||||
Cash and cash equivalents | $ | 12,507 | $ | 8,196 | |||||||
Investments | 3,755 | 3,259 | |||||||||
Accounts receivable, net | 32,385 | 35,227 | |||||||||
Inventories | 16,068 | 18,025 | |||||||||
Other current assets | 5,237 | 3,151 | |||||||||
Total current assets | 69,952 | 67,858 | |||||||||
Long-term investments | 25,028 | 23,019 | |||||||||
Property and equipment, net | 13,032 | 13,183 | |||||||||
Operating lease right-of-use assets | 16,901 | 17,252 | |||||||||
Goodwill | 91,272 | 91,272 | |||||||||
Intangible assets, net | 28,311 | 29,234 | |||||||||
Separate accounts assets | 3,187 | 3,250 | |||||||||
Other assets | 4,798 | 4,660 | |||||||||
Total assets | $ | 252,481 | $ | 249,728 | |||||||
Liabilities: | |||||||||||
Accounts payable | $ | 14,416 | $ | 14,897 | |||||||
Pharmacy claims and discounts payable | 24,188 | 22,874 | |||||||||
Health care costs payable | 13,885 | 12,049 | |||||||||
Policyholders’ funds | 1,051 | 1,326 | |||||||||
Accrued expenses | 21,163 | 22,189 | |||||||||
Other insurance liabilities | 1,041 | 1,141 | |||||||||
Current portion of operating lease liabilities | 1,911 | 1,741 | |||||||||
Short-term debt | — | 200 | |||||||||
Current portion of long-term debt | 3,731 | 2,772 | |||||||||
Total current liabilities | 81,386 | 79,189 | |||||||||
Long-term operating lease liabilities | 15,537 | 16,034 | |||||||||
Long-term debt | 62,643 | 58,638 | |||||||||
Deferred income taxes | 4,052 | 4,311 | |||||||||
Separate accounts liabilities | 3,187 | 3,250 | |||||||||
Other long-term insurance liabilities | 5,039 | 5,459 | |||||||||
Other long-term liabilities | 5,526 | 6,211 | |||||||||
Total liabilities | 177,370 | 173,092 | |||||||||
Shareholders’ equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock and capital surplus | 49,371 | 48,992 | |||||||||
Treasury stock | (36,919) | (33,838) | |||||||||
Retained earnings | 62,797 | 61,604 | |||||||||
Accumulated other comprehensive loss | (319) | (297) | |||||||||
Total CVS Health shareholders’ equity | 74,930 | 76,461 | |||||||||
Noncontrolling interests | 181 | 175 | |||||||||
Total shareholders’ equity | 75,111 | 76,636 | |||||||||
Total liabilities and shareholders’ equity | $ | 252,481 | $ | 249,728 |
Six Months Ended June 30, | |||||||||||
In millions | 2024 | 2023 | |||||||||
Cash flows from operating activities: | |||||||||||
Cash receipts from customers | $ | 173,728 | $ | 175,567 | |||||||
Cash paid for inventory, prescriptions dispensed and health services rendered | (90,845) | (101,318) | |||||||||
Insurance benefits paid | (52,485) | (41,108) | |||||||||
Cash paid to other suppliers and employees | (21,124) | (17,686) | |||||||||
Interest and investment income received | 839 | 801 | |||||||||
Interest paid | (1,392) | (1,131) | |||||||||
Income taxes paid | (729) | (1,779) | |||||||||
Net cash provided by operating activities | 7,992 | 13,346 | |||||||||
Cash flows from investing activities: | |||||||||||
Proceeds from sales and maturities of investments | 4,418 | 3,640 | |||||||||
Purchases of investments | (6,781) | (4,499) | |||||||||
Purchases of property and equipment | (1,343) | (1,575) | |||||||||
Acquisitions (net of cash and restricted cash acquired) | (73) | (16,474) | |||||||||
Other | 60 | 32 | |||||||||
Net cash used in investing activities | (3,719) | (18,876) | |||||||||
Cash flows from financing activities: | |||||||||||
Commercial paper borrowings (repayments), net | (200) | 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 | 4,959 | 10,898 | |||||||||
Repayments of long-term debt | (37) | (1,787) | |||||||||
Repurchase of common stock | (3,024) | (2,016) | |||||||||
Dividends paid | (1,698) | (1,574) | |||||||||
Proceeds from exercise of stock options | 228 | 120 | |||||||||
Payments for taxes related to net share settlement of equity awards | (176) | (168) | |||||||||
Other | (30) | (121) | |||||||||
Net cash provided by financing activities | 22 | 6,352 | |||||||||
Net increase in cash, cash equivalents and restricted cash | 4,295 | 822 | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | 8,525 | 13,305 | |||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | 12,820 | $ | 14,127 |
Six Months Ended June 30, | |||||||||||
In millions | 2024 | 2023 | |||||||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||||
Net income | $ | 2,892 | $ | 4,056 | |||||||
Adjustments required to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 2,289 | 2,105 | |||||||||
Stock-based compensation | 270 | 307 | |||||||||
Deferred income taxes and other items | (341) | 87 | |||||||||
Change in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
Accounts receivable, net | 2,798 | (804) | |||||||||
Inventories | 1,937 | 1,800 | |||||||||
Other assets | (2,241) | (913) | |||||||||
Accounts payable and pharmacy claims and discounts payable | 1,191 | (118) | |||||||||
Health care costs payable and other insurance liabilities | 1,581 | 4,334 | |||||||||
Other liabilities | (2,384) | 2,492 | |||||||||
Net cash provided by operating activities | $ | 7,992 | $ | 13,346 |
Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 574 | $ | 1,766 | $ | 1,179 | $ | (474) | $ | 3,045 | |||||||||||||||||||
Amortization of intangible assets | 293 | 149 | 64 | 1 | 507 | ||||||||||||||||||||||||
Net realized capital losses | 71 | — | — | 19 | 90 | ||||||||||||||||||||||||
Acquisition-related integration costs | — | — | — | 102 | 102 | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 938 | $ | 1,915 | $ | 1,243 | $ | (352) | $ | 3,744 |
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 |
Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||
In millions | Health Care Benefits | Health Services | Pharmacy & Consumer Wellness | Corporate/ Other | Consolidated Totals | ||||||||||||||||||||||||
Operating income (loss) (GAAP measure) | $ | 1,002 | $ | 2,979 | $ | 2,292 | $ | (957) | $ | 5,316 | |||||||||||||||||||
Amortization of intangible assets | 587 | 299 | 128 | 1 | 1,015 | ||||||||||||||||||||||||
Net realized capital losses | 81 | — | — | 27 | 108 | ||||||||||||||||||||||||
Acquisition-related integration costs | — | — | — | 162 | 162 | ||||||||||||||||||||||||
Opioid litigation charge | — | — | — | 100 | 100 | ||||||||||||||||||||||||
Adjusted operating income (loss) (1) | $ | 1,670 | $ | 3,278 | $ | 2,420 | $ | (667) | $ | 6,701 | |||||||||||||||||||
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 |
Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | ||||||||||||||||||||||
In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | |||||||||||||||||||
Net income attributable to CVS Health (GAAP measure) | $ | 1,770 | $ | 1.41 | $ | 1,901 | $ | 1.48 | |||||||||||||||
Amortization of intangible assets | 507 | 0.40 | 485 | 0.38 | |||||||||||||||||||
Net realized capital losses | 90 | 0.07 | 98 | 0.08 | |||||||||||||||||||
Acquisition-related transaction and integration costs | 102 | 0.08 | 157 | 0.12 | |||||||||||||||||||
Restructuring charge | — | — | 496 | 0.38 | |||||||||||||||||||
Office real estate optimization charges | — | — | 11 | 0.01 | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (163) | (0.13) | (303) | (0.24) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 2,306 | $ | 1.83 | $ | 2,845 | $ | 2.21 | |||||||||||||||
Weighted average diluted shares outstanding | 1,259 | 1,287 | |||||||||||||||||||||
Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | ||||||||||||||||||||||
In millions, except per share amounts | Total Company | Per Common Share | Total Company | Per Common Share | |||||||||||||||||||
Net income attributable to CVS Health (GAAP measure) | $ | 2,883 | $ | 2.28 | $ | 4,037 | $ | 3.13 | |||||||||||||||
Amortization of intangible assets | 1,015 | 0.80 | 887 | 0.69 | |||||||||||||||||||
Net realized capital losses | 108 | 0.09 | 203 | 0.16 | |||||||||||||||||||
Acquisition-related transaction and integration costs | 162 | 0.13 | 200 | 0.16 | |||||||||||||||||||
Opioid litigation charge | 100 | 0.08 | — | — | |||||||||||||||||||
Restructuring charge | — | — | 496 | 0.38 | |||||||||||||||||||
Office real estate optimization charges | — | — | 36 | 0.03 | |||||||||||||||||||
Loss on assets held for sale | — | — | 349 | 0.27 | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (305) | (0.24) | (524) | (0.41) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 3,963 | $ | 3.14 | $ | 5,684 | $ | 4.41 | |||||||||||||||
Weighted average diluted shares outstanding | 1,263 | 1,289 | |||||||||||||||||||||
In millions | Health Care Benefits | Health Services (a) | Pharmacy & Consumer Wellness | Corporate/ Other | Intersegment Eliminations (b) | Consolidated Totals | |||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2024 | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 32,475 | $ | 42,171 | $ | 29,838 | $ | 111 | $ | (13,361) | $ | 91,234 | |||||||||||||||||||||||
Adjusted operating income (loss) (1) | 938 | 1,915 | 1,243 | (352) | — | 3,744 | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||
Six Months Ended | |||||||||||||||||||||||||||||||||||
June 30, 2024 | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 64,711 | $ | 82,456 | $ | 58,563 | $ | 226 | $ | (26,285) | $ | 179,671 | |||||||||||||||||||||||
Adjusted operating income (loss) (1) | 1,670 | 3,278 | 2,420 | (667) | — | 6,701 | |||||||||||||||||||||||||||||
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 |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2024 vs 2023 | Six Months Ended June 30, 2024 vs 2023 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages and basis points (“bps”) | 2024 | 2023 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums | $ | 30,654 | $ | 25,095 | $ | 61,033 | $ | 49,434 | $ | 5,559 | 22.2 | % | $ | 11,599 | 23.5 | % | |||||||||||||||||||||||||||||||
Services | 1,521 | 1,447 | 3,025 | 2,821 | 74 | 5.1 | % | 204 | 7.2 | % | |||||||||||||||||||||||||||||||||||||
Net investment income | 300 | 205 | 653 | 369 | 95 | 46.3 | % | 284 | 77.0 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 32,475 | 26,747 | 64,711 | 52,624 | 5,728 | 21.4 | % | 12,087 | 23.0 | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 27,458 | 21,620 | 54,916 | 42,215 | 5,838 | 27.0 | % | 12,701 | 30.1 | % | |||||||||||||||||||||||||||||||||||||
MBR (Health care costs as a % of premium revenues) (3) | 89.6 | % | 86.2 | % | 90.0 | % | 85.4 | % | 340 | bps | 460 | bps | |||||||||||||||||||||||||||||||||||
Operating expenses | $ | 4,443 | $ | 3,967 | $ | 8,793 | $ | 7,841 | $ | 476 | 12.0 | % | $ | 952 | 12.1 | % | |||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 13.7 | % | 14.8 | % | 13.6 | % | 14.9 | % | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 574 | $ | 1,160 | $ | 1,002 | $ | 2,568 | $ | (586) | (50.5) | % | $ | (1,566) | (61.0) | % | |||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 1.8 | % | 4.3 | % | 1.5 | % | 4.9 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 938 | $ | 1,541 | $ | 1,670 | $ | 3,365 | $ | (603) | (39.1) | % | $ | (1,695) | (50.4) | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 2.9 | % | 5.8 | % | 2.6 | % | 6.4 | % | |||||||||||||||||||||||||||||||||||||||
Premium revenues (by business): | |||||||||||||||||||||||||||||||||||||||||||||||
Government | $ | 22,222 | $ | 17,944 | $ | 43,938 | $ | 35,472 | $ | 4,278 | 23.8 | % | $ | 8,466 | 23.9 | % | |||||||||||||||||||||||||||||||
Commercial | 8,432 | 7,151 | 17,095 | 13,962 | 1,281 | 17.9 | % | 3,133 | 22.4 | % |
June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In thousands | Insured | ASC | Total | Insured | ASC | Total | Insured | ASC | Total | Insured | ASC | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical membership: (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | 4,702 | 14,099 | 18,801 | 4,735 | 14,111 | 18,846 | 4,252 | 14,087 | 18,339 | 4,033 | 14,114 | 18,147 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Advantage | 4,342 | — | 4,342 | 4,205 | — | 4,205 | 3,460 | — | 3,460 | 3,408 | — | 3,408 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Supplement | 1,294 | — | 1,294 | 1,300 | — | 1,300 | 1,343 | — | 1,343 | 1,351 | — | 1,351 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicaid | 2,090 | 443 | 2,533 | 1,972 | 447 | 2,419 | 2,073 | 444 | 2,517 | 2,261 | 467 | 2,728 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total medical membership | 12,428 | 14,542 | 26,970 | 12,212 | 14,558 | 26,770 | 11,128 | 14,531 | 25,659 | 11,053 | 14,581 | 25,634 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental membership information: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medicare Prescription Drug Plan (stand-alone) | 4,903 | 4,947 | 6,081 | 6,094 |
June 30, 2024 | March 31, 2024 | December 31, 2023 | June 30, 2023 | ||||||||||||||||||||
Days Claims Payable (7) | 43.1 | 44.5 | 45.9 | 46.9 |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2024 vs 2023 | Six Months Ended June 30, 2024 vs 2023 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2024 | 2023 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Products | $ | 39,492 | $ | 44,681 | $ | 77,209 | $ | 88,352 | $ | (5,189) | (11.6) | % | $ | (11,143) | (12.6) | % | |||||||||||||||||||||||||||||||
Services | 2,681 | 1,534 | 5,249 | 2,454 | 1,147 | 74.8 | % | 2,795 | 113.9 | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (2) | — | (2) | — | (2) | (100.0) | % | (2) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 42,171 | 46,215 | 82,456 | 90,806 | (4,044) | (8.8) | % | (8,350) | (9.2) | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | 38,765 | 43,271 | 76,297 | 85,687 | (4,506) | (10.4) | % | (9,390) | (11.0) | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 791 | 383 | 1,492 | 383 | 408 | 106.5 | % | 1,109 | 289.6 | % | |||||||||||||||||||||||||||||||||||||
Gross profit (8) | 2,615 | 2,561 | 4,667 | 4,736 | 54 | 2.1 | % | (69) | (1.5) | % | |||||||||||||||||||||||||||||||||||||
Gross margin (Gross profit as a % of total revenues) (8) | 6.2 | % | 5.5 | % | 5.7 | % | 5.2 | % | |||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | 849 | $ | 794 | $ | 1,688 | $ | 1,331 | $ | 55 | 6.9 | % | $ | 357 | 26.8 | % | |||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 2.0 | % | 1.7 | % | 2.0 | % | 1.5 | % | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,766 | $ | 1,767 | $ | 2,979 | $ | 3,405 | $ | (1) | (0.1) | % | $ | (426) | (12.5) | % | |||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 4.2 | % | 3.8 | % | 3.6 | % | 3.7 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 1,915 | $ | 1,894 | $ | 3,278 | $ | 3,574 | $ | 21 | 1.1 | % | $ | (296) | (8.3) | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 4.5 | % | 4.1 | % | 4.0 | % | 3.9 | % | |||||||||||||||||||||||||||||||||||||||
Revenues (by distribution channel): | |||||||||||||||||||||||||||||||||||||||||||||||
Pharmacy network (9) | $ | 21,848 | $ | 27,477 | $ | 42,312 | $ | 55,069 | $ | (5,629) | (20.5) | % | $ | (12,757) | (23.2) | % | |||||||||||||||||||||||||||||||
Mail & specialty (10) | 17,651 | 17,229 | 34,913 | 33,374 | 422 | 2.4 | % | 1,539 | 4.6 | % | |||||||||||||||||||||||||||||||||||||
Other | 2,674 | 1,509 | 5,233 | 2,363 | 1,165 | 77.2 | % | 2,870 | 121.5 | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (2) | — | (2) | — | (2) | (100.0) | % | (2) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Pharmacy claims processed (5) (6) | 471.2 | 576.6 | 934.1 | 1,163.9 | (105.4) | (18.3) | % | (229.8) | (19.7) | % | |||||||||||||||||||||||||||||||||||||
Generic dispensing rate (6) (11) | 88.2 | % | 88.3 | % | 88.3 | % | 88.4 | % | |||||||||||||||||||||||||||||||||||||||
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2024 vs 2023 | Six Months Ended June 30, 2024 vs 2023 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2024 | 2023 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Products | $ | 29,252 | $ | 28,141 | $ | 57,372 | $ | 55,399 | $ | 1,111 | 3.9 | % | $ | 1,973 | 3.6 | % | |||||||||||||||||||||||||||||||
Services | 586 | 642 | 1,191 | 1,309 | (56) | (8.7) | % | (118) | (9.0) | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | — | 1 | — | (2) | (1) | (100.0) | % | 2 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 29,838 | 28,784 | 58,563 | 56,706 | 1,054 | 3.7 | % | 1,857 | 3.3 | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | 23,835 | 22,628 | 46,595 | 44,504 | 1,207 | 5.3 | % | 2,091 | 4.7 | % | |||||||||||||||||||||||||||||||||||||
Gross profit (8) | 6,003 | 6,156 | 11,968 | 12,202 | (153) | (2.5) | % | (234) | (1.9) | % | |||||||||||||||||||||||||||||||||||||
Gross margin (Gross profit as a % of total revenues) (8) | 20.1 | % | 21.4 | % | 20.4 | % | 21.5 | % | |||||||||||||||||||||||||||||||||||||||
Operating expenses | $ | 4,824 | $ | 4,807 | $ | 9,676 | $ | 9,787 | $ | 17 | 0.4 | % | $ | (111) | (1.1) | % | |||||||||||||||||||||||||||||||
Operating expenses as a % of total revenues | 16.2 | % | 16.7 | % | 16.5 | % | 17.3 | % | |||||||||||||||||||||||||||||||||||||||
Loss on assets held for sale | $ | — | $ | — | $ | — | $ | 349 | $ | — | — | % | $ | (349) | (100.0) | % | |||||||||||||||||||||||||||||||
Operating income | 1,179 | 1,349 | 2,292 | 2,066 | (170) | (12.6) | % | 226 | 10.9 | % | |||||||||||||||||||||||||||||||||||||
Operating income as a % of total revenues | 4.0 | % | 4.7 | % | 3.9 | % | 3.6 | % | |||||||||||||||||||||||||||||||||||||||
Adjusted operating income (1) | $ | 1,243 | $ | 1,413 | $ | 2,420 | $ | 2,547 | $ | (170) | (12.0) | % | $ | (127) | (5.0) | % | |||||||||||||||||||||||||||||||
Adjusted operating income as a % of total revenues | 4.2 | % | 4.9 | % | 4.1 | % | 4.5 | % | |||||||||||||||||||||||||||||||||||||||
Revenues (by major goods/service lines): | |||||||||||||||||||||||||||||||||||||||||||||||
Pharmacy | $ | 24,013 | $ | 22,614 | $ | 46,797 | $ | 44,394 | $ | 1,399 | 6.2 | % | $ | 2,403 | 5.4 | % | |||||||||||||||||||||||||||||||
Front Store | 5,281 | 5,629 | 10,651 | 11,226 | (348) | (6.2) | % | (575) | (5.1) | % | |||||||||||||||||||||||||||||||||||||
Other | 544 | 540 | 1,115 | 1,088 | 4 | 0.7 | % | 27 | 2.5 | % | |||||||||||||||||||||||||||||||||||||
Net investment income (loss) | — | 1 | — | (2) | (1) | (100.0) | % | 2 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Prescriptions filled (5) (6) | 420.4 | 405.7 | 838.0 | 810.5 | 14.7 | 3.6 | % | 27.5 | 3.4 | % | |||||||||||||||||||||||||||||||||||||
Same store sales increase (decrease): (12) | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 6.4 | % | 10.9 | % | 5.9 | % | 11.3 | % | |||||||||||||||||||||||||||||||||||||||
Pharmacy | 9.1 | % | 14.3 | % | 8.2 | % | 13.5 | % | |||||||||||||||||||||||||||||||||||||||
Front Store | (4.0) | % | (0.3) | % | (3.1) | % | 3.5 | % | |||||||||||||||||||||||||||||||||||||||
Prescription volume (6) | 6.5 | % | 3.6 | % | 6.1 | % | 4.3 | % | |||||||||||||||||||||||||||||||||||||||
Generic dispensing rate (6) (11) | 90.1 | % | 89.5 | % | 90.1 | % | 89.5 | % |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Three Months Ended June 30, 2024 vs 2023 | Six Months Ended June 30, 2024 vs 2023 | ||||||||||||||||||||||||||||||||||||||||||||
In millions, except percentages | 2024 | 2023 | 2024 | 2023 | $ | % | $ | % | |||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
Premiums | $ | 13 | $ | 13 | $ | 25 | $ | 26 | $ | — | — | % | $ | (1) | (3.8) | % | |||||||||||||||||||||||||||||||
Services | 2 | 2 | 4 | 4 | — | — | % | — | — | % | |||||||||||||||||||||||||||||||||||||
Net investment income | 96 | 68 | 197 | 241 | 28 | 41.2 | % | (44) | (18.3) | % | |||||||||||||||||||||||||||||||||||||
Total revenues | 111 | 83 | 226 | 271 | 28 | 33.7 | % | (45) | (16.6) | % | |||||||||||||||||||||||||||||||||||||
Cost of products sold | — | — | — | 1 | — | — | % | (1) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Health care costs | 46 | 50 | 93 | 102 | (4) | (8.0) | % | (9) | (8.8) | % | |||||||||||||||||||||||||||||||||||||
Operating expenses | 539 | 579 | 1,090 | 1,031 | (40) | (6.9) | % | 59 | 5.7 | % | |||||||||||||||||||||||||||||||||||||
Restructuring charge | — | 496 | — | 496 | (496) | (100.0) | % | (496) | (100.0) | % | |||||||||||||||||||||||||||||||||||||
Operating loss | (474) | (1,042) | (957) | (1,359) | 568 | 54.5 | % | 402 | 29.6 | % | |||||||||||||||||||||||||||||||||||||
Adjusted operating loss (1) | (352) | (367) | (667) | (635) | 15 | 4.1 | % | (32) | (5.0) | % |
Six Months Ended June 30, | |||||||||||
In millions | 2024 | 2023 | |||||||||
Health care costs payable, beginning of the period | $ | 12,049 | $ | 10,142 | |||||||
Less: Reinsurance recoverables | 5 | 5 | |||||||||
Less: Impact of discount rate on long-duration insurance reserves (a) | (23) | 8 | |||||||||
Health care costs payable, beginning of the period, net | 12,067 | 10,129 | |||||||||
Acquisitions, net | — | 1,102 | |||||||||
Add: Components of incurred health care costs | |||||||||||
Current year | 56,177 | 42,705 | |||||||||
Prior years (b) | (662) | (619) | |||||||||
Total incurred health care costs (c) | 55,515 | 42,086 | |||||||||
Less: Claims paid | |||||||||||
Current year | 43,218 | 32,502 | |||||||||
Prior years | 10,514 | 8,800 | |||||||||
Total claims paid | 53,732 | 41,302 | |||||||||
Health care costs payable, end of the period, net | 13,850 | 12,015 | |||||||||
Add: Reinsurance recoverables | 59 | 5 | |||||||||
Add: Impact of discount rate on long-duration insurance reserves (a) | (24) | (22) | |||||||||
Health care costs payable, end of the period | $ | 13,885 | $ | 11,998 |
Year Ending December 31, 2024 | |||||||||||||||||||||||
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) | $ | 6,247 | $ | 4.95 | $ | 6,564 | $ | 5.20 | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Amortization of intangible assets | 2,020 | 1.60 | 2,020 | 1.60 | |||||||||||||||||||
Net realized capital losses | 108 | 0.09 | 108 | 0.09 | |||||||||||||||||||
Acquisition-related integration costs | 240 | 0.19 | 230 | 0.18 | |||||||||||||||||||
Opioid litigation charge | 100 | 0.08 | 100 | 0.08 | |||||||||||||||||||
Tax impact of non-GAAP adjustments | (635) | (0.51) | (632) | (0.50) | |||||||||||||||||||
Adjusted income attributable to CVS Health (2) | $ | 8,080 | $ | 6.40 | $ | 8,390 | $ | 6.65 | |||||||||||||||
Weighted average diluted shares outstanding | 1,262 | 1,262 |
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