2021 Annual Review     |

Total revenues
in billions of dollars
Cash flow from operations
in billions of dollars
Diluted EPS from continuing operations

in dollars

Adjuted EPS*

in dollars per common share

Adjusted EPS is a non-GAAP financial measure. A reconciliation of GAAP diluted EPS from continuing operations to Adjusted EPS is provided under the heading "Reconciliation" here.

Financial Highlights

(in millions, except per share figures)
2021
2020
% change
Total revenues
$
292,111
$
268,706
8.7%
Operating income
$
13,193
$
13,911
(5.2)%
Net income (loss)
$
7,898
$
7,192
9.8%
Diluted EPS from continuing operations
$
5.95
$
5.47
8.8%
Cash flows from operations
$
18,265
$
15,865
15.1%
Stock price at year-end
$
103.16
$
68.30
51.0%
Market capitalization at year-end
$
136,378
$
89,405
52.5%
“We maintained our focus on growth, operational execution, and supporting the communities we serve as the effects of the pandemic persists.”

Shawn M. Guertin
Executive Vice President and Chief Financial Officer, CVS Health

Consolidated financial statements

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Operations

For the Years Ended December 31,
(in millions, except per share figures)
2021
2020
2019
Revenues:
$
$
$
Products
$
203,738
$
190,688
$
185,236
Premiums
$
76,132
$
69,364
$
63,122
Services
$
11,042
$
7,856
$
7,407
Net investment income
$
1,199
$
798
$
1,011
Total revenues
$
292,111
$
268,706
$
256,776
Operating costs:
$
$
$
Cost of products sold
$
175,803
$
163,981
$
158,719
Benefit costs
$
64,260
$
55,679
$
52,529
Store impairments
$
1,358
$
—
$
231
Goodwill impairments
$
431
$
—
$
—
Operating expenses
$
37,066
$
35,135
$
33,310
Total operating costs
$
278,918
$
254,795
$
244,789
Operating income
$
13,193
$
13,911
$
11,987
Interest expense
$
2,503
$
2,907
$
3,035
Loss on early extinguishment of debt
$
452
$
1,440
$
79
Other income
$
(182)
$
(206)
$
(124)
Income before income tax provision
$
10,420
$
9,770
$
8,997
Income tax provision
$
2,522
$
2,569
$
2,366
Income (loss) from continuing operations
$
7,898
$
7,201
$
6,631
Loss from discontinued operations, net of tax
$
—
$
(9)
$
—
Net income
$
7,898
$
7,192
$
6,631
Net (income) loss attributable to noncontrolling interests
$
12
$
(13)
$
3
Net income (loss) attributable to CVS Health
$
7,910
$
7,179
$
6,634
$
$
$
Basic earnings per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
6.00
$
5.49
$
5.10
Loss from discontinued operations attributable to CVS Health
$
—
$
(0.01)
$
—
Net income attributable to CVS Health
$
6.00
$
5.48
$
5.10
Weighted average basic shares outstanding
$
1,319
$
1,309
$
1,301
Diluted earnings per share:
$
$
$
Income from continuing operations attributable to CVS Health
$
5.95
$
5.47
$
5.08
Loss from discontinued operations attributable to CVS Health
$
—
$
(0.01)
$
—
Net income attributable to CVS Health
$
5.95
$
5.46
$
5.08
Weighted average diluted shares outstanding
$
1,329
$
1,314
$
1,305
Dividends declared per share
$
2.00
$
2.00
$
2.00

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31,
(in millions)
2021
2020
2019
Net income
$
7,898
$
7,192
$
6,631
Other comprehensive income (loss), net of tax:
$
$
$
Net unrealized investment gains (losses)
$
(436)
$
440
$
677
Foreign currency translation adjustments
$
(7)
$
3
$
162
Net cash flow hedges
$
(26)
$
(31)
$
(33)
Pension and other postretirement benefits
$
20
$
(17)
$
111
Other comprehensive income
$
(449)
$
395
$
917
Comprehensive income
$
7,449
$
7,587
$
7,548
Comprehensive (income) loss attributable to noncontrolling interests
$
12
$
(13)
$
3
Comprehensive income attributable to CVS Health
$
7,461
$
7,574
$
7,551

See accompanying notes to consolidated financial statements.

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Consolidated Balance Sheets

At December 31
(in millions, except per share figures)
2021
2020
Assets:
Cash and cash equivalents
$
9,408
$
7,854
Investments
$
3,117
$
3,000
Accounts receivable, net
$
24,431
$
21,742
Inventories
$
17,760
$
18,496
Other current assets
$
5,292
$
5,277
Total current assets
$
60,008
$
56,369
Long-term investments
$
23,025
$
20,812
Property and equipment, net
$
12,896
$
12,606
Operating lease right-of-use assets
$
19,122
$
20,729
Goodwill
$
79,121
$
79,552
Intangible assets, net
$
29,026
$
31,142
Separate accounts assets
$
5,087
$
4,881
Other assets
$
4,714
$
4,624
Total assets
$
232,999
$
230,715
Liabilities:
$
$
Accounts payable
$
12,544
$
11,138
Pharmacy claims and discounts payable
$
17,330
$
15,795
Health care costs payable
$
8,808
$
7,936
Policyholders' funds
$
4,301
$
4,270
Accrued expenses
$
17,670
$
14,243
Other insurance liabilities
$
1,303
$
1,557
Current portion of operating lease liabilities
$
1,646
$
1,638
Short-term debt
$
—
$
—
Current portion of long-term debt
$
4,205
$
5,440
Total current liabilities
$
67,807
$
62,017
Long-term operating lease liabilities
$
18,177
$
18,757
Long-term debt
$
51,971
$
59,207
Deferred income taxes
$
6,270
$
6,794
Separate accounts liabilities
$
5,087
$
4,881
Other long-term insurance liabilities
$
6,402
$
7,007
Other long-term liabilities
$
1,904
$
2,351
Total liabilities
$
157,618
$
161,014
Commitments and contingencies (Note 16)
$
$
Shareholders' equity:
Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding
$
—
$
—
Common stock, par value $0.01: 3,200 shares authorized; 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and 1,733 shares issued and 1,310 shares outstanding at December 31, 2020 and capital surplus
$
47,377
$
46,513
Treasury stock, at cost: 423 and 425 shares at December 31, 2020 and 2019
$
(28,173)
$
(28,178)
Retained earnings
$
54,906
$
49,640
Accumulated other comprehensive income
$
965
$
1,414
Total CVS Health shareholders' equity
$
75,075
$
69,389
Noncontrolling interests
$
306
$
312
Total shareholders' equity
$
75,381
$
69,701
Total liabilities and shareholders' equity
$
232,999
$
230,715

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

For the Years Ended December 31,
(in millions)
2021
2020
2019
Cash flows from operating activities:
Cash receipts from customers
$
284,219
$
264,327
$
248,393
Cash paid for inventory and prescriptions dispensed by retail network pharmacies
$
(165,783)
$
(158,636)
$
(149,655)
Insurance benefits paid
$
(63,598)
$
(55,124)
$
(52,242)
Cash paid to other suppliers and employees
$
(31,652)
$
(29,763)
$
(28,932)
Interest and investment income received
$
743
$
894
$
955
Interest paid
$
(2,469)
$
(2,904)
$
(2,954)
Income taxes paid
$
(3,195)
$
(2,929)
$
(2,717)
Net cash provided by operating activities
$
18,265
$
15,865
$
12,848
Cash flows from investing activities:
Proceeds from sales and maturities of investments
$
7,246
$
6,467
$
7,049
Purchases of investments
$
(9,963)
$
(9,639)
$
(7,534)
Purchases of property and equipment
$
(2,520)
$
(2,437)
$
(2,457)
Proceeds from sale-leaseback transactions
$
—
$
101
$
5
Acquisitions (net of cash acquired)
$
(146)
$
(866)
$
(444)
Proceeds from sale of subsidiary and other assets
$
—
$
840
$
—
Other
$
122
$
—
$
42
Net cash used in investing activities
$
(5,261)
$
(5,534)
$
(3,339)
Cash flows from financing activities:
Net repayments of short-term debt
$
—
$
—
$
(720)
Proceeds from issuance of long-term debt
$
987
$
9,958
$
3,736
Repayments of long-term debt
$
(10,254)
$
(15,631)
$
(8,336)
Derivative settlements
$
—
$
(7)
$
(25)
Dividends paid
$
(2,625)
$
(2,624)
$
(2,603)
Proceeds from exercise of stock options
$
549
$
264
$
210
Payments for taxes related to net share settlement of equity awards
$
(168)
$
(88)
$
(112)
Other
$
155
$
432
$
196
Net cash used in financing activities
$
(11,356)
$
(7,696)
$
(7,654)
Net increase in cash, cash equivalents and restricted cash
$
1,648
$
2,635
$
1,855
Cash, cash equivalents and restricted cash at the beginning of the period
$
11,043
$
8,408
$
6,553
Cash, cash equivalents and restricted cash at the end of the period
$
12,691
$
11,403
$
8,408
Reconciliation of net income (loss) to net cash provided by operating activities:
Net income (loss)
$
7,898
$
7,192
$
6,631
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
$
4,512
$
4,441
$
4,371
Store impairments
$
1,358
$
—
$
231
Goodwill impairments
$
431
$
—
$
—
Stock-based compensation
$
484
$
400
$
453
(Gain) loss on sale of subsidiaries
$
—
$
(269)
$
205
Loss on early extinguishment of debt
$
452
$
1,440
$
79
Deferred income taxes
$
(428)
$
(570)
$
(654)
Other noncash items
$
(390)
$
72
$
33
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net
$
(2,703)
$
(1,510)
$
(2,158)
Inventories
$
735
$
(973)
$
(1,075)
Other assets
$
(3)
$
364
$
(614)
Accounts payable and pharmacy claims and discounts payable
$
2,898
$
2,769
$
3,550
Health care costs payable and other insurance liabilities
$
169
$
(231)
$
320
Other liabilities
$
2,852
$
2,740
$
1,476
Net cash provided by operating activities
$
18,265
$
15,865
$
12,848

See accompanying notes to consolidated financial statements.

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