Total revenues

in billions of dollars

Cash flow from operations

in billions of dollars

Diluted EPS from continuing operations

in dollars per common share

Adjusted 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)
2022
2021
% change
Total revenues
$
322,467
$
292,111
10.40%
Operating income
$
7,746
$
13,193
(41.30)%
Net income (loss)
$
4,165
$
7,898
(47.30)%
Diluted EPS from continuing operations
$
3.14
$
5.95
(47.20)%
Cash flows from operations
$
16,177
$
18,265
(11.40)%
Stock price at year-end
$
93.19
$
103.16
(9.66)%
Market capitalization at year-end
$
122.27
$
136,378
(10.34)%

“We delivered excellent performance in 2022, creating strong momentum as we continue to execute our strategy in 2023. We are building on our achievements, expanding our portfolio of capabilities and continuing on our path to become the leading health care solution company.”

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

Consolidated Financial Statements

Consolidated Statements of Operations

For the Years Ended December 31,
(in millions, except per share figures)
2022
2021
2020
Revenues:
$
$
$
Products
$
226,616
$
203,738
$
190,688
Premiums
$
85,330
$
76,132
$
69,364
Services
$
9,683
$
11,042
$
7,856
Net investment income
$
838
$
1,199
$
798
Total revenues
$
322,467
$
292,111
$
268,706
Operating costs:
$
$
$
Cost of products sold
$
196,892
$
175,803
$
163,981
Benefit costs
$
71,281
$
64,260
$
55,679
Opioid litigation charges
$
5,803
$
$
Loss on assets held for sale
$
2,533
$
$
Store impairments
$
$
1,358
$
Goodwill impairments
$
$
431
$
Operating expenses
$
38,212
$
37,066
$
35,135
Total operating costs
$
314,721
$
278,918
$
254,795
Operating income
$
7,746
$
13,193
$
13,911
Interest expense
$
2,287
$
2,503
$
2,907
Loss on early extinguishment of debt
$
$
452
$
1,440
Other income
$
(169)
$
(182)
$
(206)
Income before income tax provision
$
5,628
$
10,420
$
9,770
Income tax provision
$
1,463
$
2,522
$
2,569
Income (loss) from continuing operations
$
4,165
$
7,898
$
7,201
Loss from discontinued operations, net of tax
$
$
$
(9)
Net income
$
4,165
$
7,898
$
7,192
Net (income) loss attributable to noncontrolling interests
$
(16)
$
12
$
(13)
Net income (loss) attributable to CVS Health
$
4,149
$
7,910
$
7,179
$
$
$
Basic earnings per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
3.16
$
6.00
$
5.49
Loss from discontinued operations attributable to CVS Health
$
$
$
(0.01)
Net income attributable to CVS Health
$
3.16
$
6.00
$
5.48
Weighted average basic shares outstanding
$
1,312
$
1,319
$
1,309
Diluted earnings per share:
$
$
$
Income from continuing operations attributable to CVS Health
$
3.14
$
5.95
$
5.47
Loss from discontinued operations attributable to CVS Health
$
$
$
(0.01)
Net income attributable to CVS Health
$
3.14
$
5.95
$
5.46
Weighted average diluted shares outstanding
$
1,323
$
1,329
$
1,314
Dividends declared per share
$
2.20
$
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)
2022
2021
2020
Net income
$
4,165
$
7,898
$
7,192
Other comprehensive income (loss), net of tax:
$
$
$
Net unrealized investment gains (losses)
$
(2,279)
$
(436)
$
440
Foreign currency translation adjustments
$
-
$
(7)
$
3
Net cash flow hedges
$
17
$
(26)
$
(31)
Pension and other postretirement benefits
$
(168)
$
20
$
(17)
Other comprehensive income
$
(2,430)
$
(449)
$
395
Comprehensive income
$
1,735
$
7,449
$
7,587
Comprehensive (income) loss attributable to noncontrolling interests
$
(16)
$
12
$
(13)
Comprehensive income attributable to CVS Health
$
1,719
$
7,461
$
7,574

See accompanying notes to consolidated financial statements.

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Consolidated Balance Sheets

At December 31,

(in millions, except per share figures)
2022
2021
Assets:
Cash and cash equivalents
$
12,945
$
9,408
Investments
$
2,778
$
3,117
Accounts receivable, net
$
27,276
$
24,431
Inventories
$
19,090
$
17,760
Assets held for sale
$
908
$
-
Other current assets
$
2,685
$
5,292
Total current assets
$
65,682
$
60,008
Long-term investments
$
21,096
$
23,025
Property and equipment, net
$
12,873
$
12,896
Operating lease right-of-use assets
$
17,872
$
19,122
Goodwill
$
78,150
$
79,121
Intangible assets, net
$
24,754
$
29,026
Separate accounts assets
$
3,228
$
5,087
Other assets
$
4,620
$
4,714
Total assets
$
228,275
$
232,999
Liabilities:
$
$
Accounts payable
$
14,838
$
12,544
Pharmacy claims and discounts payable
$
19,423
$
17,330
Health care costs payable
$
10,406
$
8,808
Policyholders' funds
$
1,500
$
4,301
Accrued expenses
$
18,745
$
17,670
Other insurance liabilities
$
1,140
$
1,303
Current portion of operating lease liabilities
$
1,678
$
1,646
Current portion of long-term debt
$
1,778
$
4,205
Liabilities held for sale
$
228
$
Total current liabilities
$
69,736
$
67,807
Long-term operating lease liabilities
$
16,800
$
18,177
Long-term debt
$
50,476
$
51,971
Deferred income taxes
$
3,880
$
6,270
Separate accounts liabilities
$
3,228
$
5,087
Other long-term insurance liabilities
$
6,108
$
6,402
Other long-term liabilities
$
6,732
$
1,904
Total liabilities
$
156,960
$
157,618
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; 1,758 shares issued and 1,300 shares outstanding at December 31, 2022 and 1,744 shares issued and 1,322 shares outstanding at December 31, 2021 and capital surplus
$
48,193
$
47,377
Treasury stock, at cost: 458 and 422 shares at December 31, 2022 and 2021
$
(31,858)
$
(28,173)
Retained earnings
$
56,145
$
54,906
Accumulated other comprehensive income
$
(1,465)
$
965
Total CVS Health shareholders' equity
$
71,015
$
75,075
Noncontrolling interests
$
300
$
306
Total shareholders' equity
$
71,315
$
75,381
Total liabilities and shareholders' equity
$
228,275
$
232,999

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

For the Years Ended December 31,
(in millions)
2022
2021
2020
Cash flows from operating activities:
Cash receipts from customers
$
313,662
$
284,219
$
264,327
Cash paid for inventory and prescriptions dispensed by retail network pharmacies
$
(189,766)
$
(165,783)
$
(158,636)
Insurance benefits paid
$
(69,728)
$
(63,598)
$
(55,124)
Cash paid to other suppliers and employees
$
(32,662)
$
(31,652)
$
(29,763)
Interest and investment income received
$
1,026
$
894
$
894
Interest paid
$
(2,239)
$
(2,469)
$
(2,904)
Income taxes paid
$
(4,116)
$
(3,195)
$
(2,929)
Net cash provided by operating activities
$
16,177
$
18,265
$
15,865
Cash flows from investing activities:
Proceeds from sales and maturities of investments
$
6,729
$
7,246
$
6,467
Purchases of investments
$
(7,746)
$
(9,963)
$
(9,639)
Purchases of property and equipment
$
(2,727)
$
(2,520)
$
(2,437)
Proceeds from sale-leaseback transactions
$
$
$
101
Acquisitions (net of cash acquired)
$
(139)
$
(146)
$
(866)
Proceeds from sale of subsidiary and other assets
$
(1,249)
$
$
840
Other
$
85
$
122
$
Net cash used in investing activities
$
(5,047)
$
(5,261)
$
(5,534)
Cash flows from financing activities:
Proceeds from issuance of long-term debt
$
$
987
$
9,958
Repayments of long-term debt
$
(4,211)
$
(10,254)
$
(15,631)
Derivative settlements
$
$
$
(7)
Repurchase of common stock
$
(3,500)
$
$
Dividends paid
$
(2,907)
$
(2,625)
$
(2,624)
Proceeds from exercise of stock options
$
551
$
549
$
264
Payments for taxes related to net share settlement of equity awards
$
(370)
$
(168)
$
(88)
Other
$
(79)
$
155
$
432
Net cash used in financing activities
$
(10,516)
$
(11,356)
$
(7,696)
Net increase in cash, cash equivalents and restricted cash
$
614
$
1,648
$
2,635
Cash, cash equivalents and restricted cash at the beginning of the period
$
12,691
$
11,043
$
8,408
Cash, cash equivalents and restricted cash at the end of the period
$
13,305
$
12,691
$
11,403
Reconciliation of net income (loss) to net cash provided by operating activities:
Net income
$
4,165
$
7,898
$
7,192
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
$
4,247
$
4,512
$
4,441
Loss on assets held for sale
$
2,533
$
$
Store impairments
$
$
1,358
$
Goodwill impairments
$
$
431
$
Stock-based compensation
$
447
$
484
$
400
(Gain) loss on sale of subsidiaries
$
(475)
$
$
(269)
Loss on early extinguishment of debt
$
$
452
$
1,440
Deferred income taxes
$
(2,075)
$
(428)
$
(570)
Other noncash items
$
332
$
(390)
$
72
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net
$
(2,971)
$
(2,703)
$
(1,510)
Inventories
$
(1,435)
$
735
$
(973)
Other assets
$
(566)
$
(3)
$
364
Accounts payable and pharmacy claims and discounts payable
$
4,260
$
2,898
$
2,769
Health care costs payable and other insurance liabilities
$
1,247
$
169
$
(231)
Other liabilities
$
6,468
$
2,852
$
2,740
Net cash provided by operating activities
$
16,177
$
18,265
$
15,865

See accompanying notes to consolidated financial statements.

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Page 3 of 7

2022 Annual Review

CEO Message

Financial Highlights

Strategic Imperatives

Value-Based Care

Digital Innovation

Sustainability