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2023 Annual Review     |

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Total revenues

in billions of dollars
Bar chart of Total Revenues from 2021, 2022 and 2023

Cash flow from operations

in billions of dollars
Bar chart of Cash Flows from Operations for 2021, 2022 and 2023

Diluted EPS

in dollars per common share
Bar chart of Diluted EPS for 2021, 2022 and 2023

Adjusted EPS*

in dollars per common share
Bar chart of 2021, 2022 and 2023 Adjusted EPS values

Financial Highlights

(in millions, except per share figures)
2023
2022
% change
Total revenues
$
357,776
$
322,467
10.9%
Operating income
$
13,743
$
7,954
72.8%
Adjusted operating income
$
17,534
$
18,037
(2.8%)
Diluted earnings per share
$
6.47
$
3.26
98.5%
Adjusted earnings per share*
$
8.74
$
9.03
(3.2%)
Cash flows from operations
$
13,426
$
16,177
(17.0%)

This annual report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Please see the “Cautionary Statement Concerning Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Form 10-K”), included in the PDF accessible here as part of this Annual Report, for a discussion on forward-looking statements.

* FOR ADJUSTED EPS: Adjusted operating income and adjusted earnings per share (EPS) are non-GAAP financial measures. A reconciliation of operating income to adjusted operating income is provided on page 194 of the Form 10-K included in this Annual Report, and a reconciliation of GAAP diluted EPS to Adjusted EPS is provided under the heading “Reconciliation” in the Form 10-K accessible here as part of this Annual Report.

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 amounts)
2023
2022
2021
Revenues:
$
$
$
Products
$
245,138
$
226,616
$
203,738
Premiums
$
99,192
$
85,330
$
76,132
Services
$
12,293
$
9,683
$
11,042
Net investment income
$
1,153
$
838
$
1,199
Total revenues
$
357,776
$
322,467
$
292,111
Operating costs:
$
$
$
Cost of products sold
$
217,263
$
196,892
$
175,803
Health care costs
$
86,247
$
71,073
$
64,188
Restructuring Charges
$
507
$
—
$
—
Opioid litigation charges
$
—
$
5,803
$
—
Loss on assets held for sale
$
349
$
2,533
$
—
Store impairments
$
—
$
—
$
1,358
Goodwill impairments
$
—
$
—
$
431
Operating expenses
$
39,832
$
38,212
$
37,021
Total operating costs
$
344,033
$
314,513
$
278,801
Operating income
$
13,743
$
7,954
$
13,310
Interest expense
$
2,658
$
2,287
$
2,503
Loss on early extinguishment of debt
$
—
$
—
$
452
Other income
$
(88)
$
(169)
$
(182)
Income before income tax provision
$
11,173
$
5,836
$
10,537
Income tax provision
$
2,805
$
1,509
$
2,548
Net income
$
8,368
$
4,327
$
7,989
Net (income) loss attributable to noncontrolling interests
$
(24)
$
(16)
$
12
Net income attributable to CVS Health
$
8,344
$
4,311
$
8,001
$
$
$
Net income per share attributable to CVS Health:
$
$
$
Basic
$
6.49
$
3.29
$
6.07
Diluted
$
6.47
$
3.26
$
6.02
Weighted average shares outstanding:
$
$
$
Basic
$
1,285
$
1,312
$
1,319
Diluted
$
1,290
$
1,323
$
1,329
Dividends declared per share
$
2.42
$
2.20
$
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)
2023
2022
2021
Net income
$
8,368
$
4,327
$
7,989
Other comprehensive income (loss), net of tax:
$
$
$
Net unrealized investment gains (losses)
$
1,090
$
(2,317)
$
(556)
Change in discount rate on insurance reserves
$
(67)
$
870
$
225
Foreign currency translation adjustments
$
—
$
—
$
(7)
Net cash flow hedges
$
5
$
17
$
(26)
Pension and other postretirement benefits
$
(61)
$
(168)
$
20
Other comprehensive income (loss)
$
967
$
(1,598)
$
(314)
Comprehensive income
$
9,335
$
2,729
$
7,675
Comprehensive (income) loss attributable to noncontrolling interests
$
(24)
$
(16)
$
12
Comprehensive income attributable to CVS Health
$
9,311
$
2,713
$
7,687

See accompanying notes to consolidated financial statements.

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Consolidated Balance Sheets

At December 31,

(in millions, except per share amounts)
2023
2022
Assets:
Cash and cash equivalents
$
8,196
$
12,945
Investments
$
3,259
$
2,778
Accounts receivable, net
$
35,227
$
27,276
Inventories
$
18,025
$
19,090
Assets held for sale
$
—
$
908
Other current assets
$
3,151
$
2,636
Total current assets
$
67,858
$
65,633
Long-term investments
$
23,019
$
21,096
Property and equipment, net
$
13.181
$
12,873
Operating lease right-of-use assets
$
17,252
$
17,872
Goodwill
$
91,272
$
78,150
Intangible assets, net
$
29,234
$
24,803
Separate accounts assets
$
3,250
$
3,228
Other assets
$
4,660
$
4,620
Total assets
$
249,728
$
228,275
Liabilities:
$
$
Accounts payable
$
14,897
$
14,838
Pharmacy claims and discounts payable
$
22,874
$
19,423
Health care costs payable
$
12,049
$
10,142
Policyholders' funds
$
1,326
$
1,500
Accrued expenses
$
22,189
$
18,745
Other insurance liabilities
$
1,141
$
1,089
Current portion of operating lease liabilities
$
1,741
$
1,678
Short-term debt
$
200
$
—
Current portion of long-term debt
$
2,772
$
1,778
Liabilities held for sale
$
—
$
228
Total current liabilities
$
79,189
$
69,421
Long-term operating lease liabilities
$
16,034
$
16,800
Long-term debt
$
58,638
$
50,476
Deferred income taxes
$
4,311
$
4,016
Separate accounts liabilities
$
3,250
$
3,228
Other long-term insurance liabilities
$
5,459
$
5,835
Other long-term liabilities
$
6,211
$
6,730
Total liabilities
$
173,092
$
156,506
Commitments and contingencies (Note 18)
$
$
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; 1,768 shares issued and 1,288 shares outstanding at December 31, 2023 and 1,758 shares issued and 1,300 shares outstanding at December 31, 2022 and capital surplus
$
48,992
$
48,193
Treasury stock, at cost: 480 and 458 shares at December 31, 2023 and 2022
$
(33,838)
$
(31,858)
Retained earnings
$
61,604
$
56,398
Accumulated other comprehensive loss
$
(297)
$
(1,264)
Total CVS Health shareholders' equity
$
76,461
$
71,496
Noncontrolling interests
$
175
$
300
Total shareholders' equity
$
76,636
$
71,769
Total liabilities and shareholders' equity
$
249,728
$
228,275

See accompanying notes to consolidated financial statements.

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Consolidated Statements of Cash Flows

For the Years Ended December 31,
(in millions)
2023
2022
2021
Cash flows from operating activities:
Cash receipts from customers
$
345,464
$
313,662
$
284,219
Cash paid for inventory, prescriptions dispensed and health services rendered
$
(208,848)
$
(189,766)
$
(165,783)
Insurance benefits paid
$
(84,097)
$
(69,728)
$
(63,598)
Cash paid to other suppliers and employees
$
(34,735)
$
(32,662)
$
(31,652)
Interest and investment income received
$
1,584
$
1,026
$
743
Interest paid
$
(2,418)
$
(2,239)
$
(2,469)
Income taxes paid
$
(3,524)
$
(4,116)
$
(3,195)
Net cash provided by operating activities
$
13,426
$
16,177
$
18,265
Cash flows from investing activities:
Proceeds from sales and maturities of investments
$
7,729
$
6,729
$
7,246
Purchases of investments
$
(9,043)
$
(7,746)
$
(9,963)
Purchases of property and equipment
$
(3,031)
$
(2,727)
$
(2,520)
Acquisitions (net of cash and restricted cash acquired)
$
(16,612)
$
(139)
$
(146)
Proceeds from sale of subsidiaries (net of cash and restricted cash sold of $2,854 in 2022)
$
—
$
(1,249)
$
—
Other
$
68
$
85
$
122
Net cash used in investing activities
$
(20,889)
$
(5,047)
$
(5,261)
Cash flows from financing activities:
Commercial paper borrowing (repayments), net
$
200
$
—
$
—
Proceeds from issuance of short-term loan
$
5,000
$
—
$
—
Repayment of short-term loan
$
(5,000)
$
—
$
—
Proceeds from issuance of long-term debt
$
10,898
$
—
$
987
Repayments of long-term debt
$
(3,166)
$
(4,211)
$
(10,254)
Repurchase of common stock
$
(2,012)
$
(3,500)
$
—
Dividends paid
$
(3,132)
$
(2,907)
$
(2,625)
Proceeds from exercise of stock options
$
277
$
551
$
549
Payments for taxes related to net share settlement of equity awards
$
(181)
$
(370)
$
(168)
Other
$
(201)
$
(79)
$
155
Net cash provided by (used in) financing activities
$
2,683
$
(10,516)
$
(11,356)
Net increase (decrease) in cash, cash equivalents and restricted cash
$
(4,780)
$
614
$
1,648
Cash, cash equivalents and restricted cash at the beginning of the period
$
13,305
$
12,691
$
11,043
Cash, cash equivalents and restricted cash at the end of the period
$
8,525
$
13,305
$
12,691

See accompanying notes to consolidated financial statements.

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2023 Annual Review

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Superior Assets
Superior Care
Superior Value
Healthy 2030

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2023 Annual Review

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Superior Assets

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Healthy 2030

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