1. No category

Positioned for Today,
Preparing for Tomorrow
Jon Roberts
Executive Vice President &
President, CVS/caremark
Bank of America Merrill Lynch
2015 Health Care Conference
May 13, 2015
Forward-looking Statements
During today’s presentation, we will make forward-looking statements
within the meaning of the federal securities laws. By their nature, all
forward-looking statements involve risks and uncertainties. Actual
results may differ materially from those contemplated by the forwardlooking statements for a number of reasons as described in our SEC
filings, including the risk factors section and cautionary statement
disclosure in those filings.
During this presentation, we will also use some non-GAAP financial
measures when talking about our company’s performance, including
free cash flow and Adjusted EPS. In accordance with SEC regulations,
you can find the definitions of these non-GAAP items, as well as
reconciliations to comparable GAAP measures, on the investor relations
portion of our website.
©2015 CVS Health
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New Name, New Growth Era for
Purpose-driven company: Helping people on their path to better health
©2015 CVS Health
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Industry-leading Pharmacy Benefit Manager
Operating Profit
• Approximately 71 million members
($, billions)
• ~25% share of PBM market
14.7%
CAGR
3.8
3.1
• Leading clinical programs and
innovative plan designs
• Established leadership positions in
fastest-growing markets:
2.2
• Specialty pharmacy
• Medicare
• Medicaid
2011
2013
2015E
Notes:
1. 2013 excludes $11 million gain from a legal settlement
2. 2015 reflects midpoint of guidance ranges.
3. Market share calculation excludes unmanaged prescriptions from U.S. market.
©2015 CVS Health
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Gross New Business of $7.5 Billion, Net New
Business of $4.1 Billion, Client Retention of 96%
2015 Selling Season
$1.5
billion
$3.7
$7.5billion
$2.3
billion
billion
State of Florida
Health Plan
Government & Union
Employer
Notes:
1. As of 4/24/15.
2. Gross Wins excludes Medicare Part D SilverScript individual products.
©2015 CVS Health
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Largest Specialty Pharmacy in the U.S. …
CVS Health
Specialty Revenues
Dispensing Share of
Specialty Market
($, billions)
($, billions)
37
86
31
CVS Health
25%
22
19
All Other
Specialty
Pharmacies
75%
12
2011
2012
2013
Dispensed
2014
2015E
Managed
2014
Note:
1. Specialty market currently excludes infused oncology.
Source: NHE, Artemetrx, CVS Health Internal Analysis, 2013.
©2015 CVS Health
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… With Expanding Opportunity in This
Fast-growing Market
Specialty Market
CVS Health Advantages
($, billions)
16%
CAGR
• 35+ year history in specialty
153
118
• Ability to manage across both
medical and pharmacy benefit
• Infusion services
86
• Medical claims management
• Specialty ConnectTM
2014E
2016E
Medical
2018E
• Disease management
Pharmacy
Unmatched capabilities to manage client specialty spend
Note:
1. Specialty market currently excludes infused oncology.
Source: NHE, Artemetrx, CVS Health Internal Analysis, 2013.
©2015 CVS Health
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Built One-of-a-kind Health Care Company with
Unmatched Integrated Assets
Only company with the ability to impact patients, providers and
plan sponsors with innovative, channel-agnostic solutions
Broadest capabilities to holistically manage patient in
fast-growing specialty market
CVS Health
Competitive
Edge
Unparalleled scale in the U.S. makes us low-cost provider
Largest retail clinic in U.S. with 25 million patient visits to date
Deep clinical expertise and insights across the enterprise
enable us to deliver superior outcomes at a lower cost
Note:
1. Patient visits at CVS/minuteclinic as of 5/1/15.
©2015 CVS Health
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2014 Was a Great Year
Net Revenues
Operating Profit (1)
Adjusted EPS (1) (2) (3)
Free Cash Flow (4)
Full-year 2014
Change vs. 2013
$139.4 billion
9.9%
$8.8 billion
10.5%
$4.49
13.5%
$6.5 billion
48.1%
Returned $5B+ to shareholders through dividends and share repurchases
Refer to page 13 for end notes.
©2015 CVS Health
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2015 Guidance: Healthy Enterprise Growth
Full-year 2015
Net Revenue Growth
$5.08 to $5.19
Adjusted EPS (2) (5)
Year-over-year Growth
Free Cash Flow (4)
Year-over-year Growth
7.00% to 8.25%
(3)
13.0% to 15.5%
$5.9 billion to $6.2 billion
(9.5)% to (4.8)%
Refer to page 13 for end notes.
©2015 CVS Health
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Focused on Enhancing Shareholder Value
Productive
Long-term
Growth
Generating
Significant
Free Cash
Flow
Optimizing
Capital
Allocation
Enhanced
Shareholder Value
©2015 CVS Health
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Substantial Increases in Dividends and Share
Repurchases Continuing Solid Returns
Annual Dividend per Share
Share Repurchases
($)
($, billions)
27%
50%
1.40
6.0
1.10
4.3
0.90
4.0
4.0
3.0
0.65
0.50
0.35
2010 2011 2012 2013 2014 2015E
1.5
2010 2011 2012 2013 2014E 2015E
More than $7 billion expected to be returned to shareholders in 2015
©2015 CVS Health
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Endnotes
1.
2.
3.
4.
5.
Excludes $72 million gain from a legal settlement (~$0.04 per diluted share) recognized during 2013.
Adjusted EPS equals income before income tax provision plus amortization, less adjusted income tax provision and other
(comprised of earnings allocated to participating securities), less net income attributable to noncontrolling interest, divided by
the weighted average diluted common shares outstanding. The adjusted income tax provision is computed using the effective
income tax rate computed from the consolidated statement of income.
Excludes $521 million loss on early extinguishment of debt (~$0.27 per diluted share) recognized during 2014.
Free Cash Flow equals net cash provided by operating activities less net additions to properties and equipment (i.e.,
additions to property and equipment plus proceeds from sale-leaseback transactions).
Estimates for weighted-average share count and EPS assume completion of approximately $6.0 billion in share repurchases
in 2015 as part of a $6.0 billion share repurchase program authorized by CVS Health’s board of directors in December 2013,
and a $10.0 billion share repurchase program authorized by CVS Health’s board of directors in December 2014.
©2015 CVS Health
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