8-KRegulation FD

CVS HEALTH Corp 8-K Report, Regulation FD Disclosure (May 31, 2023)

Filed May 31, 2023For Securities:CVS

Summary

CVS Health Corporation (CVS) has filed an 8-K report on May 31, 2023, primarily to reaffirm its previously issued full-year 2023 financial guidance. The company reiterated its GAAP diluted EPS guidance range of $6.90 to $7.12, Adjusted EPS guidance range of $8.50 to $8.70, and cash flow from operations guidance of $12.5 billion to $13.5 billion. Management also indicated that medical costs are expected to remain in line with pricing expectations and that more than 50% of full-year earnings are anticipated in the second half of 2023, with Q3 earnings expected to be modestly higher than Q4 earnings. The filing also provides a detailed reconciliation for its projected Adjusted EPS, outlining various non-GAAP adjustments. These include amortization of intangible assets, net realized capital losses, a loss on assets held for sale related to the long-term care business, acquisition-related costs for Signify Health and Oak Street Health, and office real estate optimization charges. Investors should note that these non-GAAP measures are used by the company to analyze underlying business performance and trends and are not a substitute for GAAP measures.

Key Highlights

  • 1Reaffirmed full-year 2023 GAAP diluted EPS guidance range of $6.90 to $7.12.
  • 2Reaffirmed full-year 2023 Adjusted EPS guidance range of $8.50 to $8.70.
  • 3Reaffirmed full-year 2023 cash flow from operations guidance range of $12.5 billion to $13.5 billion.
  • 4Expects medical costs to remain in-line with pricing expectations.
  • 5Anticipates more than 50% of full-year earnings to be generated in the second half of 2023.
  • 6Projects Q3 earnings to be modestly higher than Q4 earnings.
  • 7Provided reconciliation for non-GAAP adjustments impacting Adjusted EPS, including amortization, capital losses, asset sales, acquisition costs, and real estate charges.

Frequently Asked Questions

The main purpose of this 8-K filing is for CVS Health to reaffirm its previously issued financial guidance for the full fiscal year 2023. This includes guidance for GAAP diluted EPS, Adjusted EPS, and cash flow from operations.

CVS Health reaffirmed its full-year 2023 guidance for: GAAP diluted EPS between $6.90 and $7.12, Adjusted EPS between $8.50 and $8.70, and cash flow from operations between $12.5 billion and $13.5 billion.

CVS Health expects medical costs to remain in line with its pricing expectations. Regarding earnings distribution, the company anticipates that more than 50% of its full-year earnings will be generated in the second half of 2023, with third-quarter earnings expected to be modestly higher than fourth-quarter earnings.

The significant non-GAAP adjustments mentioned include amortization of intangible assets, net realized capital losses, a loss on assets held for sale (related to the long-term care business), acquisition-related transaction and integration costs (for Signify Health and Oak Street Health), and office real estate optimization charges. These are used to calculate Adjusted EPS.