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CVS Pharmacy is the company financial statements are attached below : 1. Give a profile of the company. 2. What is its dominant source of

CVS Pharmacy is the company financial statements are attached below :

1. Give a profile of the company.

2. What is its dominant source of revenue?

3. Compare the following to the industry average,

and to a comparable Competitor: (Competitor is Rite Aid ) Balance sheet attached

Total sales (latest year)

Total assets (end of last fiscal year)

Market capitalization (give specific date)

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Consolidated Statements of Operations For the Years Ended December 31, 2019 2018 2017 $ 185,236 S 183,910 $ 180,063 63,122 8,184 3,558 7,407 1,825 1,144 1,011 660 21 256,776 194,579 184,786 158,719 52.529 In millions, except per share amounts Revenues: Products Premiums Services Net investment income Total revenues Operating costs: Cost of products sold Benefit costs Goodwill impairments Operating expenses Total operating costs Operating income Interest expense Loss on early extinguishment of debt Other expense (income) Income before income tax provision Income tax provision Income (loss) from continuing operations Loss from discontinued operations, net of tax Net income (loss Net (income) loss attributable to noncontrolling interests Net income (loss) attributable to CVS Health 156,447 6,594 6,149 21,368 190,558 4,021 2,619 153,448 2,810 181 18,809 175,248 9,538 1,062 33,541 244,789 11,987 3,035 79 (124) 8,997 2,366 6,631 208 1,406 2,002 (596) 8,268 1,637 6,631 (8) 6,623 (1) 6,622 6,631 3 6,634 5 (596) 2 (594) $ $ $ 6.48 (0.01) $ 5.10 5 $ 5.10 5 1,301 (0.57) $ $ (0.57) 5 1,044 $ 6.47 1,020 Basic earnings (loss) per share: Income (loss) from continuing operations attributable to CVS Health Loss from discontinued operations attributable to CVS Health Net income (loss) attributable to CVS Health Weighted average basic shares outstanding Diluted earnings (loss) per share: Income (loss) from continuing operations attributable to CVS Health Loss from discontinued operations attributable to CVS Health Net income (loss) attributable to CVS Health Weighted average diluted shares outstanding Dividends declared per share $ 5.08 $ $ $ $ 5.08 $ 1,305 2.00 $ (0.57) - 5 (0.57) $ 1,044 2.00 $ 6.45 (0.01) 6.44 1,024 2.00 $ See accompanying notes to consolidated financial statements. Consolidated Statements of Cash Flows For the Years Ended December 31, 2019 2018 2017 $ 248,393 5 186,519 $ 176,594 In millions Cash flows from operating activities: Cash receipts from customers Cash paid for inventory and prescriptions dispensed by retail network pharmacies Insurance benefits paid Cash paid to other suppliers and employees Interest and investment income received Interest paid Income taxes paid Net cash provided by operating activities (149,655) (52,242) (28,932) 955 (2,954) (2,717) 12.848 (148,981) (6,897) (17,234) 644 (2,803) (2,383) 8,865 (146,469) (2,810) (15,348) 21 (1,072) (2,909) 8,007 Cash flows from investing activities: Proceeds from sales and maturities of investments Purchases of investments Purchases of property and equipment Proceeds from sale-leaseback transactions Acquisitions (net of cash acquired) Proceeds from sale of subsidiary and other assets Other Net cash used in investing activities 7,049 (7,534) (2,457) 5 817 (692) (2,037) 61 (137) (1,918) 265 (1,181) (42,226) 832 21 (43,285) 42 33 (2,877) (3,339) (598) (720) 3,736 (8,336) (25) (556) 44,343 (5,522) 446 Cash flows from financing activities: Net repayments of short-term debt Proceeds from issuance of long-term debt Repayments of long-term debt Derivative settlements Repurchase of common stock Dividends paid Proceeds from exercise of stock options Payments for taxes related to net share settlement of equity awards Other Net cash provided by (used in) financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at the beginning of the period Cash, cash equivalents and restricted cash at the end of the period (2,603) 210 (112) (2,038) 242 (97) (4,361) (2,049) 329 (71) (7,850) 36,819 1,659 4,295 5,954 5 2,395 1,900 4,295 $ (6,751) 1 (1,620) 3,520 1,900 $ Consolidated Balance Sheets At December 31, 2019 2018 $ In millions, except per share amounts Assets: Cash and cash equivalents Investments Accounts receivable, net Inventories Other current assets Total current assets Long-term investments Property and equipment, net Operating lease right-of-use assets Goodwill Intangible assets, net Separate accounts assets Other assets Total assets 5,683 $ 2,373 19,617 17,516 5,113 50,302 17,314 12,044 20,860 79,749 33,121 4,459 4,600 222,449 $ 4,059 2,522 17,631 16,450 4,581 45,243 15,732 11,349 78,678 36,524 3,884 5,046 196,456 $ $ 10,492 $ 13,601 6,879 2,991 12,133 1,830 1,596 8,925 11,365 6,147 2,939 10,711 1,937 Liabilities: Accounts payable Pharmacy claims and discounts payable Health care costs payable Policyholders' funds Accrued expenses Other insurance liabilities Current portion of operating lease liabilities Short-term debt Current portion of long-term debt Total current liabilities Long-term operating lease liabilities Long-term debt Deferred income taxes Separate accounts liabilities Other long-term insurance liabilities Other long-term liabilities Total liabilities Commitments and contingencies (Note 16) 720 1,265 44,009 3,781 53,303 18,926 64,699 7,294 4,459 7,436 71,444 7,677 3,884 8,119 2,780 137,913 2,162 158,279 Shareholders' equiry: Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding Common stock, par value $0.01: 3,200 shares authorized; 1,727 shares issued and 1,302 shares outstanding at December 31, 2019 and 1,720 shares issued and 1,295 shares outstanding at December 31, 2018 and capital surplus Treasury stock, at cost: 425 shares at both December 31, 2019 and 2018 Retained earnings Accumulated other comprehensive income Total CVS Health shareholders' equity Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity 45,972 (28,235) 45,108 1,019 63,864 306 64,170 222,449 $ 45,440 (28,228) 40,911 102 58,225 318 58,543 196,456 $ See accompanying notes to consolidated financial statements. 93 Dear Fellow Stockholders: This past year was a remarkable one for CVS Health. We completed our first full year as a combined company with Aetna, and I am pleased with the progress we achieved in executing on our strategic priorities. We have set a clear and bold path for CVS Health to be the most consumer-centric health company. Powered by our unmatched collection of integrated assets, we are transforming the way health care is delivered in the United States. As consumers take a more active role efforts at mitigating the impact of the in their health care decisions, we have Coronavirus (COVID-19) pandemic. the ability to deliver health care when, where and how consumers need it. That We quickly assembled CVS Health's leadership and colleagues. During this could happen in the community, right at home or in the palm of the hand through unprecedented and uncertain time, one of our digital products. We have our first priority has been the well- CVS Pharmacy retail locations within being and safety of our employees, three miles of nearly 70 percent of the consumers, members and the U.S. population, and the frequency of communities we serve. As part of a our consumer interactions provides multi-faceted response, we waived the us the opportunity to introduce and fees on home delivery of prescriptions expand our programs and services and front store items. In our Health into consumers' existing routines. Care Benefits segment we waived co-pays for any telemedicine visits CVS Health offers an array of products and eliminated out of pocket costs for and services, including pharmacy COVID-19 diagnostic testing. We also benefit management (PBM) services, partnered with the U.S. government to mail order and specialty pharmacy, and open a local COVID-19 testing site to retail and long-term care pharmacy help facilitate increased frequency and services. We also offer health care efficiency of testing. I encourage you benefits products and services, Coram to visit CVSHealth.com as we continue infusion and Accordant nurse care to provide updates on our initiatives. management services. Taken together, these integrated assets allow us In 2019, CVS Health Posted record to engage with about one in three revenues and strong cash flow while Americans every year. Additionally, we achieving significant cost saving integration synergies from the Aetna now use text messaging to engage with acquisition more than 80 million people who are enrolled in our text messaging program Total revenues for the year increased across our Enterprise. by 32.0 percent to a record $256.8 billion, with operating income and Before I delve more deeply into our adjusted operating income totaling transformation and review the $12.0 billion and $15.3 billion, past year's financial performance, respectively. I want to update you on some of our *Adjusted operating income is anon GAAP francia monus. A reconciliation of operating income to adjusted Operating income to provided on pago 163 of the attached Annual Report on Form DK. Financial Highlights in milions, except per sharofigures) 2019 2018 % change Total revenues 256,776 $ 194,579 32.0% Operating income 11,987 $ 4,021 NM Net income (loss) 6,631 $ (596) NM Diluted EPS from continuing operations 5.08 $ (0.57) NM Cash flows from operations $ 12,848 $ 8,865 44.9% Stock price at year-end 74.29 $ 65.52 13.4% Market capitalization at year-end 96,651 $ 84,843 13.9% Total revenues in billions of dollars Adjusted EPS in dollars per common share Diluted EPS from continuing operations in dollars 4.62 4.91 6.45 (0.57) 5.08 153.3 177.5 184.8 194.6 256.8 5.16 5.84 5.90 7.08 7.08 17 18 19 18 16 17 18 19 15 16 17 18 19 NM not meaninghal *Adustod EPS is anon GAAP financial mansue. A reconciation of name is from continuing operations attributabb to CVS Heath toadjusted income from continuing operations attributable to CVS Health and cabulations of GAAP alted EPS from contruing operations and Adjusted EPS are provided under the heading "Reconciliation in the back pages of the Annual Report Consolidated Statements of Operations For the Years Ended December 31, 2019 2018 2017 $ 185,236 S 183,910 $ 180,063 63,122 8,184 3,558 7,407 1,825 1,144 1,011 660 21 256,776 194,579 184,786 158,719 52.529 In millions, except per share amounts Revenues: Products Premiums Services Net investment income Total revenues Operating costs: Cost of products sold Benefit costs Goodwill impairments Operating expenses Total operating costs Operating income Interest expense Loss on early extinguishment of debt Other expense (income) Income before income tax provision Income tax provision Income (loss) from continuing operations Loss from discontinued operations, net of tax Net income (loss Net (income) loss attributable to noncontrolling interests Net income (loss) attributable to CVS Health 156,447 6,594 6,149 21,368 190,558 4,021 2,619 153,448 2,810 181 18,809 175,248 9,538 1,062 33,541 244,789 11,987 3,035 79 (124) 8,997 2,366 6,631 208 1,406 2,002 (596) 8,268 1,637 6,631 (8) 6,623 (1) 6,622 6,631 3 6,634 5 (596) 2 (594) $ $ $ 6.48 (0.01) $ 5.10 5 $ 5.10 5 1,301 (0.57) $ $ (0.57) 5 1,044 $ 6.47 1,020 Basic earnings (loss) per share: Income (loss) from continuing operations attributable to CVS Health Loss from discontinued operations attributable to CVS Health Net income (loss) attributable to CVS Health Weighted average basic shares outstanding Diluted earnings (loss) per share: Income (loss) from continuing operations attributable to CVS Health Loss from discontinued operations attributable to CVS Health Net income (loss) attributable to CVS Health Weighted average diluted shares outstanding Dividends declared per share $ 5.08 $ $ $ $ 5.08 $ 1,305 2.00 $ (0.57) - 5 (0.57) $ 1,044 2.00 $ 6.45 (0.01) 6.44 1,024 2.00 $ See accompanying notes to consolidated financial statements. Consolidated Statements of Cash Flows For the Years Ended December 31, 2019 2018 2017 $ 248,393 5 186,519 $ 176,594 In millions Cash flows from operating activities: Cash receipts from customers Cash paid for inventory and prescriptions dispensed by retail network pharmacies Insurance benefits paid Cash paid to other suppliers and employees Interest and investment income received Interest paid Income taxes paid Net cash provided by operating activities (149,655) (52,242) (28,932) 955 (2,954) (2,717) 12.848 (148,981) (6,897) (17,234) 644 (2,803) (2,383) 8,865 (146,469) (2,810) (15,348) 21 (1,072) (2,909) 8,007 Cash flows from investing activities: Proceeds from sales and maturities of investments Purchases of investments Purchases of property and equipment Proceeds from sale-leaseback transactions Acquisitions (net of cash acquired) Proceeds from sale of subsidiary and other assets Other Net cash used in investing activities 7,049 (7,534) (2,457) 5 817 (692) (2,037) 61 (137) (1,918) 265 (1,181) (42,226) 832 21 (43,285) 42 33 (2,877) (3,339) (598) (720) 3,736 (8,336) (25) (556) 44,343 (5,522) 446 Cash flows from financing activities: Net repayments of short-term debt Proceeds from issuance of long-term debt Repayments of long-term debt Derivative settlements Repurchase of common stock Dividends paid Proceeds from exercise of stock options Payments for taxes related to net share settlement of equity awards Other Net cash provided by (used in) financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase (decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash at the beginning of the period Cash, cash equivalents and restricted cash at the end of the period (2,603) 210 (112) (2,038) 242 (97) (4,361) (2,049) 329 (71) (7,850) 36,819 1,659 4,295 5,954 5 2,395 1,900 4,295 $ (6,751) 1 (1,620) 3,520 1,900 $ Consolidated Balance Sheets At December 31, 2019 2018 $ In millions, except per share amounts Assets: Cash and cash equivalents Investments Accounts receivable, net Inventories Other current assets Total current assets Long-term investments Property and equipment, net Operating lease right-of-use assets Goodwill Intangible assets, net Separate accounts assets Other assets Total assets 5,683 $ 2,373 19,617 17,516 5,113 50,302 17,314 12,044 20,860 79,749 33,121 4,459 4,600 222,449 $ 4,059 2,522 17,631 16,450 4,581 45,243 15,732 11,349 78,678 36,524 3,884 5,046 196,456 $ $ 10,492 $ 13,601 6,879 2,991 12,133 1,830 1,596 8,925 11,365 6,147 2,939 10,711 1,937 Liabilities: Accounts payable Pharmacy claims and discounts payable Health care costs payable Policyholders' funds Accrued expenses Other insurance liabilities Current portion of operating lease liabilities Short-term debt Current portion of long-term debt Total current liabilities Long-term operating lease liabilities Long-term debt Deferred income taxes Separate accounts liabilities Other long-term insurance liabilities Other long-term liabilities Total liabilities Commitments and contingencies (Note 16) 720 1,265 44,009 3,781 53,303 18,926 64,699 7,294 4,459 7,436 71,444 7,677 3,884 8,119 2,780 137,913 2,162 158,279 Shareholders' equiry: Preferred stock, par value $0.01: 0.1 shares authorized; none issued or outstanding Common stock, par value $0.01: 3,200 shares authorized; 1,727 shares issued and 1,302 shares outstanding at December 31, 2019 and 1,720 shares issued and 1,295 shares outstanding at December 31, 2018 and capital surplus Treasury stock, at cost: 425 shares at both December 31, 2019 and 2018 Retained earnings Accumulated other comprehensive income Total CVS Health shareholders' equity Noncontrolling interests Total shareholders' equity Total liabilities and shareholders' equity 45,972 (28,235) 45,108 1,019 63,864 306 64,170 222,449 $ 45,440 (28,228) 40,911 102 58,225 318 58,543 196,456 $ See accompanying notes to consolidated financial statements. 93 Dear Fellow Stockholders: This past year was a remarkable one for CVS Health. We completed our first full year as a combined company with Aetna, and I am pleased with the progress we achieved in executing on our strategic priorities. We have set a clear and bold path for CVS Health to be the most consumer-centric health company. Powered by our unmatched collection of integrated assets, we are transforming the way health care is delivered in the United States. As consumers take a more active role efforts at mitigating the impact of the in their health care decisions, we have Coronavirus (COVID-19) pandemic. the ability to deliver health care when, where and how consumers need it. That We quickly assembled CVS Health's leadership and colleagues. During this could happen in the community, right at home or in the palm of the hand through unprecedented and uncertain time, one of our digital products. We have our first priority has been the well- CVS Pharmacy retail locations within being and safety of our employees, three miles of nearly 70 percent of the consumers, members and the U.S. population, and the frequency of communities we serve. As part of a our consumer interactions provides multi-faceted response, we waived the us the opportunity to introduce and fees on home delivery of prescriptions expand our programs and services and front store items. In our Health into consumers' existing routines. Care Benefits segment we waived co-pays for any telemedicine visits CVS Health offers an array of products and eliminated out of pocket costs for and services, including pharmacy COVID-19 diagnostic testing. We also benefit management (PBM) services, partnered with the U.S. government to mail order and specialty pharmacy, and open a local COVID-19 testing site to retail and long-term care pharmacy help facilitate increased frequency and services. We also offer health care efficiency of testing. I encourage you benefits products and services, Coram to visit CVSHealth.com as we continue infusion and Accordant nurse care to provide updates on our initiatives. management services. Taken together, these integrated assets allow us In 2019, CVS Health Posted record to engage with about one in three revenues and strong cash flow while Americans every year. Additionally, we achieving significant cost saving integration synergies from the Aetna now use text messaging to engage with acquisition more than 80 million people who are enrolled in our text messaging program Total revenues for the year increased across our Enterprise. by 32.0 percent to a record $256.8 billion, with operating income and Before I delve more deeply into our adjusted operating income totaling transformation and review the $12.0 billion and $15.3 billion, past year's financial performance, respectively. I want to update you on some of our *Adjusted operating income is anon GAAP francia monus. A reconciliation of operating income to adjusted Operating income to provided on pago 163 of the attached Annual Report on Form DK. Financial Highlights in milions, except per sharofigures) 2019 2018 % change Total revenues 256,776 $ 194,579 32.0% Operating income 11,987 $ 4,021 NM Net income (loss) 6,631 $ (596) NM Diluted EPS from continuing operations 5.08 $ (0.57) NM Cash flows from operations $ 12,848 $ 8,865 44.9% Stock price at year-end 74.29 $ 65.52 13.4% Market capitalization at year-end 96,651 $ 84,843 13.9% Total revenues in billions of dollars Adjusted EPS in dollars per common share Diluted EPS from continuing operations in dollars 4.62 4.91 6.45 (0.57) 5.08 153.3 177.5 184.8 194.6 256.8 5.16 5.84 5.90 7.08 7.08 17 18 19 18 16 17 18 19 15 16 17 18 19 NM not meaninghal *Adustod EPS is anon GAAP financial mansue. A reconciation of name is from continuing operations attributabb to CVS Heath toadjusted income from continuing operations attributable to CVS Health and cabulations of GAAP alted EPS from contruing operations and Adjusted EPS are provided under the heading "Reconciliation in the back pages of the Annual Report

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