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Financial Highlights

(in millions, except per share figures)
2020
2019
% change
Total revenues
$
268,706
$
256,776
4.6%
Operating income
$
13,911
$
11,987
16.1%
Net income (loss)
$
7,192
$
6,631
8.5%
Diluted EPS from continuing operations
$
5.47
$
5.08
7.7%
Cash flows from operations
$
15,865
$
12,848
23.5%
Stock price at year-end
$
68.30
$
74.29
(8.1)%
Market capitalization at year-end
$
89,405
$
96,651
(7.5)%

Total revenues

in billions of dollars

177.5
16
184.8
17
194.6
18
256.8
19
268.7
20

Diluted EPS from continuing operations

in dollars

4.91
16
6.45
17
(0.57)
18
5.08
19
5.47
20

Cash flow from operations

in billions of dollars

10.1
16
8.0
17
8.9
18
12.8
19
15.9
20

Adjusted EPS*

in dollars per common share

5.84
16
5.90
17
7.08
18
7.08
19
7.50
20
* Adjusted EPS is a non-GAAP financial measure. A reconciliation of income (loss) from continuing operations attributable to CVS Health to adjusted income from continuing operations attributable to CVS Health and calculations of GAAP diluted EPS from continuing operations and Adjusted EPS are provided under the heading "Reconciliation" in the back pages of our Annual Report.

Consolidated financial statements

Consolidated Statements of Operations

For the Years Ended December 31,
For the Year Ended December 31,
(in millions, except per share figures)
2020
2019
2018
Revenues:
$
$
$
Products
$
190,688
$
185,236
$
183,910
Premiums
$
69,364
$
63,122
$
8,184
Services
$
7,856
$
7,407
$
1,825
Net investment income
$
798
$
1,011
$
660
Total revenues
$
268,706
$
256,776
$
194,579
Operating costs:
$
$
$
Cost of products sold
$
163,981
$
158,719
$
156,447
Benefit costs
$
55,679
$
52,529
$
6,594
Goodwill impairments
$
$
$
6,149
Operating expenses
$
35,135
$
33,541
$
21,368
Total operating costs
$
254,795
$
244,789
$
190,558
Operating income
$
13,911
$
11,987
$
4,021
Interest expense
$
2,907
$
3,035
$
2,619
Loss on early extinguishment of debt
$
1,440
$
79
$
Other expense (income)
$
(206)
$
(124)
$
(4)
Income before income tax provision
$
9,770
$
8,997
$
1,406
Income tax provision
$
2,569
$
2,366
$
2,002
Income (loss) from continuing operations
$
7,201
$
6,631
$
(596)
Loss from discontinued operations, net of tax
$
(9)
$
$
Net income (loss)
$
7,192
$
6,631
$
(596)
Net (income) loss attributable to noncontrolling interests
$
(13)
$
3
$
2
Net income (loss) attributable to CVS Health
$
7,179
$
6,634
$
(594)
$
$
$
Basic earnings (loss) per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
5.49
$
5.10
$
(0.57)
Loss from discontinued operations attributable to CVS Health
$
(0.01)
$
$
Net income (loss) attributable to CVS Health
$
5.48
$
5.10
$
(0.57)
Weighted average basic shares outstanding
$
1,309
$
1,301
$
1,044
Diluted earnings (loss) per share:
$
$
$
Income (loss) from continuing operations attributable to CVS Health
$
5.47
$
5.08
$
(0.57)
Loss from discontinued operations attributable to CVS Health
$
(0.01)
$
$
Net income (loss) attributable to CVS Health
$
5.46
$
5.08
$
(0.57)
Weighted average diluted shares outstanding
$
1,314
$
1,305
$
1,044
Dividends declared per share
$
2.00
$
2.00
$
2.00

Consolidated Statements of Comprehensive Income (Loss)

For the Years Ended December 31,
For the Year Ended December 31,
(in millions)
2020
2019
2018
Net income (loss)
$
7,192
$
6,631
$
(596)
Other comprehensive income (loss), net of tax:
$
$
$
Net unrealized investment gains
$
440
$
677
$
97
Foreign currency translation adjustments
$
3
$
162
$
(29)
Net cash flow hedges
$
(31)
$
(33)
$
330
Pension and other postretirement benefits
$
(17)
$
111
$
(124)
Other comprehensive income
$
395
$
917
$
274
Comprehensive income (loss)
$
7,587
$
7,548
$
(322)
Comprehensive (income) loss attributable to noncontrolling interests
$
(13)
$
3
$
2
Comprehensive income (loss) attributable to CVS Health
$
7,574
$
7,551
$
(320)

Consolidated Balance Sheets

At December 31,
At December 31,
(in millions, except per share figures)
2020
2019
Assets:
$
$
Cash and cash equivalents
$
7,854
$
5,683
Investments
$
3,000
$
2,373
Accounts receivable, net
$
21,742
$
19,617
Inventories
$
18,496
$
17,516
Other current assets
$
5,277
$
5,113
Total current assets
$
56,369
$
50,302
Long-term investments
$
20,812
$
17,314
Property and equipment, net
$
12,606
$
12,044
Operating lease right-of-use assets
$
20,729
$
20,860
Goodwill
$
79,552
$
79,749
Intangible assets, net
$
31,142
$
33,121
Separate accounts assets
$
4,881
$
4,459
Other assets
$
4,624
$
4,600
Total assets
$
230,715
$
222,449
$
$
Liabilities:
$
$
Accounts payable
$
11,138
$
10,492
Pharmacy claims and discounts payable
$
15,795
$
13,601
Health care costs payable
$
7,936
$
6,879
Policyholders' funds
$
4,270
$
2,991
Accrued expenses
$
14,243
$
12,133
Other insurance liabilities
$
1,557
$
1,830
Current portion of operating lease liabilities
$
1,638
$
1,596
Short-term debt
$
$
Current portion of long-term debt
$
5,440
$
3,781
Total current liabilities
$
62,017
$
53,303
Long-term operating lease liabilities
$
18,757
$
18,926
Long-term debt
$
59,207
$
64,699
Deferred income taxes
$
6,794
$
7,294
Separate accounts liabilities
$
4,881
$
4,459
Other long-term insurance liabilities
$
7,007
$
7,436
Other long-term liabilities
$
2,351
$
2,162
Total liabilities
$
161,014
$
158,279
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; 1,733 shares issued and 1,310 shares outstanding at December 31, 2020 and 1,727 shares issued and 1,302 shares outstanding at December 31, 2019 and capital surplus
$
46,513
$
45,972
Treasury stock, at cost: 423 and 425 shares at December 31, 2020 and 2019
$
(28,178)
$
(28,235)
Retained earnings
$
49,640
$
45,108
Accumulated other comprehensive income
$
1,414
$
1,019
Total CVS Health shareholders' equity
$
69,389
$
63,864
Noncontrolling interests
$
312
$
306
Total shareholders' equity
$
69,701
$
64,170
Total liabilities and shareholders' equity
$
230,715
$
222,449

Consolidated Statements of Cash Flows

For the Years Ended December 31,
For the Year Ended December 31,
(in millions)
2020
2019
2018
Cash flows from operating activities:
$
$
$
Cash receipts from customers
$
264,327
$
248,393
$
186,519
Cash paid for inventory and prescriptions dispensed by retail network pharmacies
$
(158,636)
$
(149,655)
$
(148,981)
Insurance benefits paid
$
(55,124)
$
(52,242)
$
(6,897)
Cash paid to other suppliers and employees
$
(29,763)
$
(28,932)
$
(17,234)
Interest and investment income received
$
894
$
955
$
644
Interest paid
$
(2,904)
$
(2,954)
$
(2,803)
Income taxes paid
$
(2,929)
$
(2,717)
$
(2,383)
Net cash provided by operating activities
$
15,865
$
12,848
$
8,865
$
$
$
Cash flows from investing activities:
$
$
$
Proceeds from sales and maturities of investments
$
6,467
$
7,049
$
817
Purchases of investments
$
(9,639)
$
(7,534)
$
(692)
Purchases of property and equipment
$
(2,437)
$
(2,457)
$
(2,037)
Proceeds from sale-leaseback transactions
$
101
$
5
$
Acquisitions (net of cash acquired)
$
(866)
$
(444)
$
(42,226)
Proceeds from sale of subsidiary and other assets
$
840
$
$
832
Other
$
$
42
$
21
Net cash used in investing activities
$
(5,534)
$
(3,339)
$
(43,285)
Cash flows from financing activities:
$
$
$
Net repayments of short-term debt
$
$
(720)
$
(556)
Proceeds from issuance of long-term debt
$
9,958
$
3,736
$
44,343
Repayments of long-term debt
$
(15,631)
$
(8,336)
$
(5,522)
Derivative settlements
$
(7)
$
(25)
$
446
Dividends paid
$
(2,624)
$
(2,603)
$
(2,038)
Proceeds from exercise of stock options
$
264
$
210
$
242
Payments for taxes related to net share settlement of equity awards
$
(88)
$
(112)
$
(97)
Other
$
(27)
$
$
1
Net cash provided by (used in) financing activities
$
(8,155)
$
(7,850)
$
36,819
Effect of exchange rate changes on cash, cash equivalents and restricted cash
$
$
$
(4)
Net increase (decrease) in cash, cash equivalents and restricted cash
$
2,176
$
1,659
$
2,395
Cash, cash equivalents and restricted cash at the beginning of the period
$
5,954
$
4,295
$
1,900
Cash, cash equivalents and restricted cash at the end of the period
$
8,130
$
5,954
$
4,295
Reconciliation of net income (loss) to net cash provided by operating activities:
$
$
$
Net income (loss)
$
7,192
$
6,631
$
(596)
Adjustments required to reconcile net income (loss) to net cash provided by operating activities:
$
$
$
Depreciation and amortization
$
4,441
$
4,371
$
2,718
Goodwill impairments
$
$
$
6,149
Loss on settlement of defined benefit pension plans
$
$
$
Stock-based compensation
$
400
$
453
$
280
Loss on sale of subsidiary
$
(269)
$
205
$
86
Loss on early extinguishment of debt
$
1,440
$
79
$
Deferred income taxes
$
(570)
$
(654)
$
87
Other noncash items
$
72
$
264
$
253
Change in operating assets and liabilities, net of effects from acquisitions:
$
$
$
Accounts receivable, net
$
(1,510)
$
(2,158)
$
(1,139)
Inventories
$
(973)
$
(1,075)
$
(1,153)
Other assets
$
364
$
(614)
$
(3)
Accounts payable and pharmacy claims and discounts payable
$
2,769
$
3,550
$
2,329
Health care costs payable and other insurance liabilities
$
(231)
$
320
$
(311)
Other liabilities
$
2,740
$
1,476
$
165
Net cash provided by operating activities
$
15,865
$
12,848
$
8,865