Health is personal. 2020 Annual Report Dear Fellow Stockholders: In my first letter as president and chief executive officer, let me begin by expressing how honored I am to lead this great company and our dedicated team of nearly 300,000 CVS Health colleagues as we work together to reimagine health care. During one of the most challenging years in our nation’s history, our purpose to help people on their path to better health has never been more important. Since the pandemic struck, CVS Health colleagues served a prominent role in supporting our customers, providers, and communities, while we outperformed on our financial commitments. Over the past decade, we have been on a journey to become the nation’s leading diversified health services company. As one of the most trusted brands in America, our presence in communities across the country allows us to meet consumers where they are and support them for every Karen S. Lynch meaningful moment of health throughout their lifetime. President and Chief Executive Officer Continued growth in our core subscription customers, achieving for the Federal Pharmacy Partnership businesses drove our strong high customer satisfaction results. program through which we administer performance in 2020 COVID-19 immunizations in our In 2020, CVS Health year-over-year Delivered new solutions and CVS Pharmacy locations. With the total revenues grew by 5 percent to established an unparalleled response commitment and hard work of our $268.7 billion. GAAP diluted earnings to COVID-19 employees, we have the capacity to per share (EPS) from continuing During the past year, we delivered new administer 20 to 25 million doses operations grew by 8 percent to $5.47 market solutions and strengthened our per month, depending on availability. and Adjusted EPS grew by 6 percent role as a trusted health care partner in to $7.50*. We achieved over $900 response to COVID-19. I am grateful for our colleagues, particularly those on the front lines, million of integration synergies and We rapidly innovated to meet customer generated $15.9 billion in cash flow who worked tirelessly to help millions needs for COVID-19 testing in the of Americans through extraordinary from operations, which we deployed community. Today, we remain the to invest in our future, maintain circumstances and all that we have largest community testing organization achieved this past year. our quarterly dividend, and reduce in the United States. Through our debt. In total, we have repaid over fourth quarter earnings call, we had Making significant progress in $12.2 billion in net debt since the close administered approximately 15 million creating new CVS Health services of the Aetna transaction. We remain tests at our more than 4,800 testing and integrated value on track to achieve our target leverage locations nationwide. Over 50 percent We have made measurable and import- ratio in 2022 and are committed to of these tests were administered in ant progress with our strategy as a returning value to our stockholders. communities with significant need for health services company that integrates Our strong results demonstrate that support, according to the CDC Social and utilizes all our assets to create a Vulnerability Index. Additionally, we superior customer experience that firmly our strategy and business model are SM working. launched our Return Ready solution addresses the total cost of care. to help employers and universities as n We are creating health platforms that n In the Health Care Benefits segment, they execute their return-to-work and we grew total revenue by 8 percent combine local points of care, remote school strategies. Such leadership monitoring, virtual care, and access for the year, with strong growth com- enabled us to establish new relation- ing from our Government businesses. to health care professionals – all ships with approximately 8 million within a personalized consumer-cen- n Our Pharmacy Services segment consumers who previously were not tric model. Examples of these new has been resilient throughout the CVS Health customers. programs include Transform Diabe- pandemic. We demonstrated the We started working with the federal tes Care®, Transform Oncology Care®, value we bring to our customers and government on vaccine distribution and the CVS Kidney Care® program. members, achieving strong retention readiness in the fourth quarter of 2020 n We have seen strong reception to rates and positive momentum in and were selected as one of the partners winning new business. our first fully integrated plan, the for vaccine administration in long-term Aetna Connected Plan®, and expect n In our Retail / Long-Term Care care facilities. We administered more to make this plan available in an segment, we continued to advance than 4 million vaccine doses to patients additional 15 markets in 2021. Key our clinical programs that improve and staff in over 40,000 long-term care features include zero-dollar copays medication adherence and health facilities across the country through at MinuteClinic® locations**, standard outcomes. We increased the level the end of February. We were also formulary, and use of the CVS Health of engagement with our loyalty and selected as one of the national partners Coram® infusion services. 1 CVS Health 177.5 184.8 194.6 256.8 268.7 4.91 6.45 (0.57) 5.08 5.47 Total Diluted EPS revenues from in billions of continuing dollars operations in dollars 16 17 18 19 20 16 17 18 19 20 10.1 8.0 8.9 12.8 15.9 5.84 5.90 7.08 7.08 7.50 Cash flow Adjusted EPS* from in dollars per operations common share in billions of dollars 16 17 18 19 20 16 17 18 19 20 n We have deepened our pharmacy Sustainability World Index. We Strong momentum for 2021 penetration into the Health Care renewed and strengthened our and beyond Benefits segment through increased commitment to addressing the racial In summary, we are starting 2021 with cross-selling of medical and health disparities and social injustices strong momentum. We are accelerat- pharmacy plans. This is expected to that weaken our nation and affect ing our pace of progress to drive our result in approximately $350 million health. Over the next five years, we consumer-centric strategy – a strategy in incremental revenue in 2021. are investing nearly $600 million to built upon the fundamental belief that n We launched new medical benefit advance employee, community, and solving consumer health needs will plans designed with low-copay public policy initiatives that address create value for our customers, our or no-copay at MinuteClinics to inequality faced by Black Americans communities, and our stockholders. and other underserved communities. offer broader access to care. We I want to thank Larry Merlo and the have approximately 6 million Aetna In 2020 we also made great strides in advancing a holistic strategic diversity Board of Directors for setting a bold Commercial and Medicare members path for CVS Health to change health enrolled to date. management strategy that supports our business objectives and creates care in this country. Larry did an n We ended 2020 with just over 650 new opportunities for our colleagues. incredible job of bringing together our HealthHUB® locations nationwide, Diversity powers our ability to support unique assets and establishing the including locations in underserved patients and customers with empathy, foundation for our future. You can read communities. The HealthHUB is respect, and cultural sensitivity, more about Larry’s achievements on one of the many channels we have helping to build healthier communities. page 9, where he also shares a few to engage with consumers for their Our workforce development programs parting thoughts. health, that also improve access to support our efforts to cultivate and I am confident in our future and in our quality and holistic care. recruit the best health care talent ability to help people on their path to n We continue to expand our virtual in the country. better health. On behalf of the Board care capabilities with our E-Clinic We took steps to address diversity and our colleagues, thank you for service in our MinuteClinic footprint among our senior leadership and investing in CVS Health. and our virtual-first primary care worked to develop benchmarks Sincerely, program where members can and measure outcomes in diverse engage with providers virtually. representation at all levels of our These examples clearly show that organization. For the first time, we’ve we are delivering value by creating tied performance in this area to superior health offerings that help executive compensation. Karen S. Lynch President and Chief Executive Officer consumers get quality, affordable, and You can read about our activities convenient care. on pages 7–8. For a comprehensive April 2, 2021 Deepening our commitment to overview, read the CVS Health 2020 Corporate Social Responsibility Corporate Social Responsibility Report In addition to spearheading initiatives on our corporate website. related to COVID-19, we furthered our leadership in sustainability and * Adjusted EPS is a non-GAAP financial measure. A reconciliation of GAAP diluted EPS from continuing corporate social responsibility. For the operations to Adjusted EPS is provided under the heading “Reconciliation” in the back pages of this second straight year, CVS Health was Annual Report. named in the prestigious Dow Jones ** Not applicable to HSA plans 2020 Annual Report 2 Health is personal. CVS Health is committed to addressing the unique, holistic health care needs of each of our customers. We are engaging them in ways that address the most prevalent, costly, and complex health conditions impacting their lives. As a result, we can drive better health outcomes, improving their experience, enhancing access, making care more affordable, and being their trusted health care partners for every meaningful moment of health in their lives.