CVS achieved strong financial results in 2000, with record sales, operating profit, and net earnings. CVS is positioned for continued growth by focusing on its vision to be the most customer-focused, innovative, and convenient healthcare retailer. Key factors driving growth in the retail pharmacy industry include the introduction of new drugs, an aging population, and expanding managed care. CVS is well-positioned to capitalize on these opportunities through its expanding network of CVS/pharmacy stores, CVS ProCare specialty pharmacies, PharmaCare pharmacy benefits management business, and CVS.com online pharmacy.
CVS Corporation reported strong financial results in its 1999 Annual Report. Total sales increased 18.5% to $18.1 billion and same-store sales grew 12.5%. CVS filled a record 281 million prescriptions and opened 433 new stores. CVS achieved a five-year compounded annual earnings growth rate of nearly 28% and operated 4,100 stores, maintaining its position as the largest drugstore chain in America. CVS has already attained a leading position in the fast-growing specialty pharmacy business with its CVS ProCare division.
Alltel Corporation reported its financial results for the first quarter of 2008. Service revenues increased 11% compared to the first quarter of 2007, however operating income decreased 21% and net income decreased 154% due to losses from continuing operations. Capital expenditures also decreased 14% year-over-year. The number of customers grew 9% to over 13 million, while average monthly cash costs per customer remained relatively flat at $32.53.
This annual report summarizes Procter & Gamble's (P&G's) financial performance and strategic goals for 2001. Net sales declined slightly but core earnings grew. P&G aims to focus on core brands and businesses, improve performance in key markets like the US and Western Europe, and drive growth through innovation. The report highlights how P&G employees and brands help improve people's lives through stories like a dog saved by a specialized diet and a woman who used Olay for decades.
Groupon has experienced rapid subscriber, customer, and revenue growth since launching in late 2008. By the first quarter of 2011, Groupon had over 83 million subscribers and $655 million in quarterly revenue, up significantly from prior periods. However, costs have also grown rapidly, accounting for over 100% of revenue in Q1 2011. Key metrics like the average deal price, revenue per merchant, and marketing costs per merchant have fluctuated over time. Most of Groupon's 7,000+ employees are international and work in sales roles.
The document provides financial information for Jones Lang LaSalle's first quarter 2009 earnings call. It includes reconciliations of GAAP net loss to adjusted figures, summaries of revenue and earnings by segment, details of cost cutting measures, debt covenant metrics, and a list of new client wins in their Global Corporate Solutions division. The financial results showed a net loss of $61.5M for the quarter, though adjustments for items like restructuring charges brought the adjusted net loss to $16.3M. Segments like the Americas saw revenue and earnings growth while others like Europe declined. The company also outlined steps taken to reduce costs like staff cuts, discretionary spending cuts, and reduced capital expenditures.
This document summarizes Office Depot's first quarter 2009 earnings conference call. It reports that total company sales were $3.2 billion, down 19% year-over-year, and the company had a GAAP loss of $55 million but earnings of $27 million after adjusting for charges. The call also provides details on performance in North America retail, business solutions, and international segments. It outlines steps being taken under the strategic business review to improve profitability and cash flow, such as store closures. Liquidity remains strong with $806 million available and an expectation of minimal debt levels for the year.
PDG started as a financial investor in real estate projects, pairing with developers. It has since expanded to control two core developers, Goldfarb (80%) and CHL (70%), through gradual acquisitions. PDG's structure transforms it into a "one-stop shop" in Brazil's real estate sector while maintaining flexibility. Its network of joint ventures and role as a partner rather than competitor ensures a constant flow of new investment opportunities. Organic growth comes from its stakes in core developers as well as new projects, while its acquisition approach and relationships create inorganic growth options. Valuation using a DCF model sets a December 2008 target price implying a 99.8% upside.
Greene King reported resilient results for 2008/09 despite difficult trading conditions. Revenue increased 1.3% to £954.6 million but operating profit declined 6.7% to £216.2 million due to cost pressures. The company continued to invest in its businesses, pay down debt, and maintain its dividend. Current trading was described as encouraging.
CVS Corporation reported strong financial results in its 1999 Annual Report. Total sales increased 18.5% to $18.1 billion and same-store sales grew 12.5%. CVS filled a record 281 million prescriptions and opened 433 new stores. CVS achieved a five-year compounded annual earnings growth rate of nearly 28% and operated 4,100 stores, maintaining its position as the largest drugstore chain in America. CVS has already attained a leading position in the fast-growing specialty pharmacy business with its CVS ProCare division.
Alltel Corporation reported its financial results for the first quarter of 2008. Service revenues increased 11% compared to the first quarter of 2007, however operating income decreased 21% and net income decreased 154% due to losses from continuing operations. Capital expenditures also decreased 14% year-over-year. The number of customers grew 9% to over 13 million, while average monthly cash costs per customer remained relatively flat at $32.53.
This annual report summarizes Procter & Gamble's (P&G's) financial performance and strategic goals for 2001. Net sales declined slightly but core earnings grew. P&G aims to focus on core brands and businesses, improve performance in key markets like the US and Western Europe, and drive growth through innovation. The report highlights how P&G employees and brands help improve people's lives through stories like a dog saved by a specialized diet and a woman who used Olay for decades.
Groupon has experienced rapid subscriber, customer, and revenue growth since launching in late 2008. By the first quarter of 2011, Groupon had over 83 million subscribers and $655 million in quarterly revenue, up significantly from prior periods. However, costs have also grown rapidly, accounting for over 100% of revenue in Q1 2011. Key metrics like the average deal price, revenue per merchant, and marketing costs per merchant have fluctuated over time. Most of Groupon's 7,000+ employees are international and work in sales roles.
The document provides financial information for Jones Lang LaSalle's first quarter 2009 earnings call. It includes reconciliations of GAAP net loss to adjusted figures, summaries of revenue and earnings by segment, details of cost cutting measures, debt covenant metrics, and a list of new client wins in their Global Corporate Solutions division. The financial results showed a net loss of $61.5M for the quarter, though adjustments for items like restructuring charges brought the adjusted net loss to $16.3M. Segments like the Americas saw revenue and earnings growth while others like Europe declined. The company also outlined steps taken to reduce costs like staff cuts, discretionary spending cuts, and reduced capital expenditures.
This document summarizes Office Depot's first quarter 2009 earnings conference call. It reports that total company sales were $3.2 billion, down 19% year-over-year, and the company had a GAAP loss of $55 million but earnings of $27 million after adjusting for charges. The call also provides details on performance in North America retail, business solutions, and international segments. It outlines steps being taken under the strategic business review to improve profitability and cash flow, such as store closures. Liquidity remains strong with $806 million available and an expectation of minimal debt levels for the year.
PDG started as a financial investor in real estate projects, pairing with developers. It has since expanded to control two core developers, Goldfarb (80%) and CHL (70%), through gradual acquisitions. PDG's structure transforms it into a "one-stop shop" in Brazil's real estate sector while maintaining flexibility. Its network of joint ventures and role as a partner rather than competitor ensures a constant flow of new investment opportunities. Organic growth comes from its stakes in core developers as well as new projects, while its acquisition approach and relationships create inorganic growth options. Valuation using a DCF model sets a December 2008 target price implying a 99.8% upside.
Greene King reported resilient results for 2008/09 despite difficult trading conditions. Revenue increased 1.3% to £954.6 million but operating profit declined 6.7% to £216.2 million due to cost pressures. The company continued to invest in its businesses, pay down debt, and maintain its dividend. Current trading was described as encouraging.
The document provides answers to 19 questions about ConAgra Foods' financial performance in Q1 FY09. Some key details include: brands in Consumer Foods that saw sales growth/declines; unit volume was flat for Consumer Foods; total depreciation was $76M; capital expenditures were $106M; net interest expense was $50M; corporate expense was $97M; dividends paid were $92M; diluted shares outstanding were 470M; gross/operating margins were 20%/10%; net debt was $3.09B; net debt to capital ratio was 39%; effective tax rate was 38%; projected capex for FY09 were $475M; expected net interest expense
The Pantry, Inc. is the largest convenience store operator in the southeastern United States, operating 1,289 stores across 10 states. In fiscal year 2002, the company focused on operational excellence through strategic investments and initiatives to enhance store performance and gasoline operations. While total revenues declined from $2.6 billion in 2001 to $2.5 billion in 2002 due to lower gasoline prices, the company grew comparable store merchandise sales by 3.4% and gasoline volume by 1.5%. Net income improved to $1.8 million compared to a net loss in 2001, as the company paid down debt and ended the year with $42.2 million in cash.
Best Buy Co., Inc. is a specialty retailer of consumer electronics, personal computers, entertainment software and appliances. In fiscal 2001, Best Buy achieved record sales of $15.3 billion and net earnings of $396 million. Best Buy acquired Musicland Stores Corporation and Magnolia Hi-Fi in fiscal 2001 to expand into new retail formats and reach more consumers. Best Buy plans to leverage these acquisitions to grow sales and earnings, while also expanding internationally by opening stores in Canada. The chairman is confident in Best Buy's strategies and employees to continue outperforming competitors and delivering top-quartile earnings growth over the long run.
This document provides an overview and agenda for a PBG presentation. It includes a snapshot of PBG highlighting their employees, brands, and financial track record. It discusses the evolving landscape facing consumers and the beverage industry. The strategic priorities to drive shareholder value are refreshing and repositioning the brand portfolio, transforming performance through operating excellence, and capitalizing on geographic growth opportunities. Guidance for 2009 anticipates low single-digit top-line and profit growth due to currency pressures but strong cash flow and liquidity.
Campbell Soup Company reported strong financial results in 2006. Net sales increased to $7.34 billion from $7.07 billion in 2005. Earnings from continuing operations grew to $755 million in 2006 from $644 million in 2005. The company is focused on driving sustainable quality growth through five key strategies, including expanding their iconic brands within the categories of Simple Meals and Baked Snacks. In 2006, the company increased sales of brands like Campbell's soup, Goldfish crackers, and Pepperidge Farm cookies. The annual report discusses Campbell Soup Company's financial performance in 2006 and strategic plans for further growing their business in the coming years.
The document is ConAgra Foods' 2008 annual report which provides financial highlights and discusses the company's focus on its food business. It summarizes that net sales increased over $11 billion but profit growth was impacted by high inflation. The company divested non-core businesses and focused on innovation, cost reductions, and quality improvements to combat inflation and drive sustainable growth going forward.
This document contains the transcript from Oshkosh Corporation's earnings conference call for the third quarter of fiscal year 2008. Key highlights include a 6.6% increase in quarterly sales to $1.97 billion but a 5.9% decrease in operating income to $181.2 million. EPS for the quarter decreased 1.7% to $1.19. Oshkosh revised its estimate for full year 2008 EPS to a range of $3.15 to $3.30.
WESCO International is a leading distributor of electrical products and other maintenance, repair and operating supplies. In 1999, WESCO saw record sales of $3.4 billion and net income of $35.1 million. The company operates over 340 branches across North America and focuses on exceptional customer service, a wide selection of quality products, and reliable logistics to ensure on-time delivery.
This document is a letter from the Chairman and CEO of General Motors Corporation to stockholders summarizing the company's performance in 2005. It discusses GM's $10.6 billion loss for the year due to challenges in the US market from legacy costs and inability to cut structural costs as revenue fell. It outlines GM's four-point turnaround plan to address costs, including plant closures and workforce reductions estimated to cut annual costs by $7 billion. It also discusses GM's continued investments in new vehicles and technology while growing its global business outside North America.
This document is a letter from the Chairman and CEO of General Motors Corporation to stockholders summarizing the company's performance in 2005. It discusses GM's $10.6 billion loss for the year due to challenges in the US market from legacy costs and inability to cut structural costs as revenue fell. It outlines GM's four-point turnaround plan to address costs, including plant closures and workforce reductions estimated to cut annual costs by $7 billion. It also discusses GM's continued investments in new vehicles and technology while growing its global business outside North America.
Whole Foods Market is the largest natural and organic foods retailer in North America. In 2003, it had sales of $3.1 billion, operating income of $175 million, and 145 stores across the US and Canada. The company aims to reach $10 billion in sales by 2010 by continuing to open new, larger stores with an emphasis on perishables and prepared foods.
The document is a presentation from Neenah Paper, Inc. given at an investor conference in February 2012. It provides an overview of Neenah Paper, including:
1) Neenah Paper leads in performance-based technical products and high-end printing papers. It has two business segments: Technical Products and Fine Paper.
2) The company has successfully transformed its business mix and financial performance through strategic acquisitions and focus on specialty markets.
3) Neenah Paper has continued strong financial momentum, with top and bottom line growth, improving margins, and increasing return on capital. A recent acquisition is expected to further drive growth and value creation.
Neenah Paper presented at an investor forum on March 19, 2012. The presentation discussed Neenah's business segments in technical products and fine paper, highlighting growth strategies for each segment. Key priorities included expanding internationally, entering new markets, and gaining share in target areas. Neenah aims to increase returns through profitable growth while maintaining financial strength.
The Sherwin-Williams Company reported another successful year in 2003 with net sales increasing 4.3% to $5.41 billion. Income before the cumulative effect of change in accounting principle grew 6.9% to $332.1 million. Diluted earnings per share set a new record high of $2.26, up 10.8% from the prior year. Cash flow from operations exceeded $550 million for the third consecutive year. The company strengthened its balance sheet, invested in capital expenditures and acquisitions, paid dividends, and repurchased shares. All operating segments increased sales with the exception of the Automotive Finishes segment, which saw a 0.6% increase. The company expects continued growth through
This document summarizes CNH Global's financial results for the first quarter of 2009. It reports that net sales were down 2% from the first quarter of 2008 to $3.241 billion, excluding currency effects. Agricultural equipment net sales were $1.174 billion while construction equipment net sales were $480 million. Operating profit declined significantly from the prior year due to lower volumes and negative currency effects, with agricultural equipment operating profit impacted most by volume and market mix changes. The construction equipment business saw a decline in operating profit driven by lower volumes and extended plant closures.
Barnes & Noble's annual report summarizes the company's strong financial performance in 1997. Revenues increased 14% to $2.8 billion compared to 1996. Net earnings increased 27% to $64.7 million and diluted earnings per share increased 24% to $0.93. The company also saw growth in return on beginning equity to 14.2% from 12.8% in 1996. Barnes & Noble opened 65 new stores in 1997 and operated over 1,000 stores total by the end of the fiscal year.
The Timken Company maintained profitability in 1999 despite weaknesses in many markets. The company achieved its third highest sales ever and reduced inventory days for the third consecutive year. Looking ahead, Timken is transforming its organization into a more global business with new leadership and a broader product portfolio to fuel growth and take advantage of improving business conditions in 2000.
The document is P&G's 2000 annual report which summarizes the company's financial and operating performance for the fiscal year.
1) Net sales grew 5% to $39.9 billion while net earnings fell 6% to $3.5 billion due to higher costs from organizational changes and new investments. Core earnings excluding restructuring costs grew 2% to a record $4.2 billion.
2) The CEO acknowledges the year's challenges but expresses confidence that by focusing on big brands, innovation, customer partnerships, and cost control, P&G can restore balanced growth in sales and profits.
3) Looking forward, the new organizational structure aims to leverage P&G's strengths in understanding consumer needs
Lennar Corporation grew significantly in 1998 through adherence to core values and strategies of operational simplicity, strategic acquisitions, diversified earnings, and balance sheet strength. Key accomplishments included 73% earnings per share growth, reduced homebuilding debt ratio, and 63% increased shareholders' equity. Lennar's simple operating model of focused geographic markets, standardized home features, and emphasis on quality helped drive efficient growth. Acquisitions expanded operations across high-growth states while diversifying earnings. Maintaining a prudent balance sheet positions Lennar for continued long-term growth.
Lennar Corporation grew significantly from 1996-1998 through strategic acquisitions, geographic expansion, product and service diversification, and strengthening of its balance sheet. It grew revenues from $1.4 billion to $2.4 billion, net income from $59.8 million to $144.1 million, and earnings per share from $1.12 to $2.49 over this period. Lennar focused on building high quality homes across a range of price points for first-time buyers, move-up buyers, and active adults in the fastest growing markets of Florida, Texas, Arizona, Nevada, and California. It also expanded its financial services offerings. Lennar emphasized keeping operations simple and leveraging its
General Mills reported financial results for fiscal year 2006 that marked the beginning of a new phase of growth for the company. Net sales increased 4% to over $11.6 billion worldwide, and segment operating profit grew 5% despite significant input cost inflation. Earnings per share were $2.90. The company aims to deliver low single-digit sales growth, mid single-digit operating profit growth, and high single-digit earnings per share growth over the next 3-5 years. International expansion and growth in new retail channels will be important drivers of the company's future financial performance.
General Mills reported financial results for fiscal year 2006 that marked the beginning of a new phase of growth for the company. Net sales increased 4% to over $11.6 billion worldwide, and segment operating profit grew 5% despite significant input cost inflation. Earnings per share were $2.90. The company aims to deliver low single-digit sales growth, mid single-digit operating profit growth, and high single-digit earnings per share growth over the next 3-5 years through international expansion, growth in new retail channels, and a diversified portfolio of brands and businesses.
The document provides answers to 19 questions about ConAgra Foods' financial performance in Q1 FY09. Some key details include: brands in Consumer Foods that saw sales growth/declines; unit volume was flat for Consumer Foods; total depreciation was $76M; capital expenditures were $106M; net interest expense was $50M; corporate expense was $97M; dividends paid were $92M; diluted shares outstanding were 470M; gross/operating margins were 20%/10%; net debt was $3.09B; net debt to capital ratio was 39%; effective tax rate was 38%; projected capex for FY09 were $475M; expected net interest expense
The Pantry, Inc. is the largest convenience store operator in the southeastern United States, operating 1,289 stores across 10 states. In fiscal year 2002, the company focused on operational excellence through strategic investments and initiatives to enhance store performance and gasoline operations. While total revenues declined from $2.6 billion in 2001 to $2.5 billion in 2002 due to lower gasoline prices, the company grew comparable store merchandise sales by 3.4% and gasoline volume by 1.5%. Net income improved to $1.8 million compared to a net loss in 2001, as the company paid down debt and ended the year with $42.2 million in cash.
Best Buy Co., Inc. is a specialty retailer of consumer electronics, personal computers, entertainment software and appliances. In fiscal 2001, Best Buy achieved record sales of $15.3 billion and net earnings of $396 million. Best Buy acquired Musicland Stores Corporation and Magnolia Hi-Fi in fiscal 2001 to expand into new retail formats and reach more consumers. Best Buy plans to leverage these acquisitions to grow sales and earnings, while also expanding internationally by opening stores in Canada. The chairman is confident in Best Buy's strategies and employees to continue outperforming competitors and delivering top-quartile earnings growth over the long run.
This document provides an overview and agenda for a PBG presentation. It includes a snapshot of PBG highlighting their employees, brands, and financial track record. It discusses the evolving landscape facing consumers and the beverage industry. The strategic priorities to drive shareholder value are refreshing and repositioning the brand portfolio, transforming performance through operating excellence, and capitalizing on geographic growth opportunities. Guidance for 2009 anticipates low single-digit top-line and profit growth due to currency pressures but strong cash flow and liquidity.
Campbell Soup Company reported strong financial results in 2006. Net sales increased to $7.34 billion from $7.07 billion in 2005. Earnings from continuing operations grew to $755 million in 2006 from $644 million in 2005. The company is focused on driving sustainable quality growth through five key strategies, including expanding their iconic brands within the categories of Simple Meals and Baked Snacks. In 2006, the company increased sales of brands like Campbell's soup, Goldfish crackers, and Pepperidge Farm cookies. The annual report discusses Campbell Soup Company's financial performance in 2006 and strategic plans for further growing their business in the coming years.
The document is ConAgra Foods' 2008 annual report which provides financial highlights and discusses the company's focus on its food business. It summarizes that net sales increased over $11 billion but profit growth was impacted by high inflation. The company divested non-core businesses and focused on innovation, cost reductions, and quality improvements to combat inflation and drive sustainable growth going forward.
This document contains the transcript from Oshkosh Corporation's earnings conference call for the third quarter of fiscal year 2008. Key highlights include a 6.6% increase in quarterly sales to $1.97 billion but a 5.9% decrease in operating income to $181.2 million. EPS for the quarter decreased 1.7% to $1.19. Oshkosh revised its estimate for full year 2008 EPS to a range of $3.15 to $3.30.
WESCO International is a leading distributor of electrical products and other maintenance, repair and operating supplies. In 1999, WESCO saw record sales of $3.4 billion and net income of $35.1 million. The company operates over 340 branches across North America and focuses on exceptional customer service, a wide selection of quality products, and reliable logistics to ensure on-time delivery.
This document is a letter from the Chairman and CEO of General Motors Corporation to stockholders summarizing the company's performance in 2005. It discusses GM's $10.6 billion loss for the year due to challenges in the US market from legacy costs and inability to cut structural costs as revenue fell. It outlines GM's four-point turnaround plan to address costs, including plant closures and workforce reductions estimated to cut annual costs by $7 billion. It also discusses GM's continued investments in new vehicles and technology while growing its global business outside North America.
This document is a letter from the Chairman and CEO of General Motors Corporation to stockholders summarizing the company's performance in 2005. It discusses GM's $10.6 billion loss for the year due to challenges in the US market from legacy costs and inability to cut structural costs as revenue fell. It outlines GM's four-point turnaround plan to address costs, including plant closures and workforce reductions estimated to cut annual costs by $7 billion. It also discusses GM's continued investments in new vehicles and technology while growing its global business outside North America.
Whole Foods Market is the largest natural and organic foods retailer in North America. In 2003, it had sales of $3.1 billion, operating income of $175 million, and 145 stores across the US and Canada. The company aims to reach $10 billion in sales by 2010 by continuing to open new, larger stores with an emphasis on perishables and prepared foods.
The document is a presentation from Neenah Paper, Inc. given at an investor conference in February 2012. It provides an overview of Neenah Paper, including:
1) Neenah Paper leads in performance-based technical products and high-end printing papers. It has two business segments: Technical Products and Fine Paper.
2) The company has successfully transformed its business mix and financial performance through strategic acquisitions and focus on specialty markets.
3) Neenah Paper has continued strong financial momentum, with top and bottom line growth, improving margins, and increasing return on capital. A recent acquisition is expected to further drive growth and value creation.
Neenah Paper presented at an investor forum on March 19, 2012. The presentation discussed Neenah's business segments in technical products and fine paper, highlighting growth strategies for each segment. Key priorities included expanding internationally, entering new markets, and gaining share in target areas. Neenah aims to increase returns through profitable growth while maintaining financial strength.
The Sherwin-Williams Company reported another successful year in 2003 with net sales increasing 4.3% to $5.41 billion. Income before the cumulative effect of change in accounting principle grew 6.9% to $332.1 million. Diluted earnings per share set a new record high of $2.26, up 10.8% from the prior year. Cash flow from operations exceeded $550 million for the third consecutive year. The company strengthened its balance sheet, invested in capital expenditures and acquisitions, paid dividends, and repurchased shares. All operating segments increased sales with the exception of the Automotive Finishes segment, which saw a 0.6% increase. The company expects continued growth through
This document summarizes CNH Global's financial results for the first quarter of 2009. It reports that net sales were down 2% from the first quarter of 2008 to $3.241 billion, excluding currency effects. Agricultural equipment net sales were $1.174 billion while construction equipment net sales were $480 million. Operating profit declined significantly from the prior year due to lower volumes and negative currency effects, with agricultural equipment operating profit impacted most by volume and market mix changes. The construction equipment business saw a decline in operating profit driven by lower volumes and extended plant closures.
Barnes & Noble's annual report summarizes the company's strong financial performance in 1997. Revenues increased 14% to $2.8 billion compared to 1996. Net earnings increased 27% to $64.7 million and diluted earnings per share increased 24% to $0.93. The company also saw growth in return on beginning equity to 14.2% from 12.8% in 1996. Barnes & Noble opened 65 new stores in 1997 and operated over 1,000 stores total by the end of the fiscal year.
The Timken Company maintained profitability in 1999 despite weaknesses in many markets. The company achieved its third highest sales ever and reduced inventory days for the third consecutive year. Looking ahead, Timken is transforming its organization into a more global business with new leadership and a broader product portfolio to fuel growth and take advantage of improving business conditions in 2000.
The document is P&G's 2000 annual report which summarizes the company's financial and operating performance for the fiscal year.
1) Net sales grew 5% to $39.9 billion while net earnings fell 6% to $3.5 billion due to higher costs from organizational changes and new investments. Core earnings excluding restructuring costs grew 2% to a record $4.2 billion.
2) The CEO acknowledges the year's challenges but expresses confidence that by focusing on big brands, innovation, customer partnerships, and cost control, P&G can restore balanced growth in sales and profits.
3) Looking forward, the new organizational structure aims to leverage P&G's strengths in understanding consumer needs
Lennar Corporation grew significantly in 1998 through adherence to core values and strategies of operational simplicity, strategic acquisitions, diversified earnings, and balance sheet strength. Key accomplishments included 73% earnings per share growth, reduced homebuilding debt ratio, and 63% increased shareholders' equity. Lennar's simple operating model of focused geographic markets, standardized home features, and emphasis on quality helped drive efficient growth. Acquisitions expanded operations across high-growth states while diversifying earnings. Maintaining a prudent balance sheet positions Lennar for continued long-term growth.
Lennar Corporation grew significantly from 1996-1998 through strategic acquisitions, geographic expansion, product and service diversification, and strengthening of its balance sheet. It grew revenues from $1.4 billion to $2.4 billion, net income from $59.8 million to $144.1 million, and earnings per share from $1.12 to $2.49 over this period. Lennar focused on building high quality homes across a range of price points for first-time buyers, move-up buyers, and active adults in the fastest growing markets of Florida, Texas, Arizona, Nevada, and California. It also expanded its financial services offerings. Lennar emphasized keeping operations simple and leveraging its
General Mills reported financial results for fiscal year 2006 that marked the beginning of a new phase of growth for the company. Net sales increased 4% to over $11.6 billion worldwide, and segment operating profit grew 5% despite significant input cost inflation. Earnings per share were $2.90. The company aims to deliver low single-digit sales growth, mid single-digit operating profit growth, and high single-digit earnings per share growth over the next 3-5 years. International expansion and growth in new retail channels will be important drivers of the company's future financial performance.
General Mills reported financial results for fiscal year 2006 that marked the beginning of a new phase of growth for the company. Net sales increased 4% to over $11.6 billion worldwide, and segment operating profit grew 5% despite significant input cost inflation. Earnings per share were $2.90. The company aims to deliver low single-digit sales growth, mid single-digit operating profit growth, and high single-digit earnings per share growth over the next 3-5 years through international expansion, growth in new retail channels, and a diversified portfolio of brands and businesses.
- AutoZone reported first quarter fiscal year 2009 results, with net sales up 2% to $1.478 billion and diluted EPS up 10% to $2.23. Operating profit was flat at $239 million and operating margin decreased slightly.
- The company opened 30 new stores and replaced 2 stores in the US, ending the quarter with 4,122 domestic stores. Commercial programs grew 2% and commercial sales increased 1.8% to $170.6 million.
- Inventory increased 6% to $2.192 billion while inventory turns decreased to 1.5x. Working capital was negative $66 million and debt increased 5% to $2.268 billion.
This document provides a summary of General Mills' 2007 annual report. It discusses growth across General Mills' divisions, with every major operating division posting sales increases. Net sales grew 6% to $12.4 billion and segment operating profits grew 7% to $2.3 billion. The summary also mentions that General Mills sees five key drivers of ongoing growth: product innovation, channel expansion, international expansion, margin expansion, and brand-building investment. General Mills believes these drivers will allow it to meet its long-term growth model targets.
This document provides a summary of General Mills' 2007 annual report. It discusses the company's financial highlights for fiscal year 2007, including a 6% increase in net sales to $12.4 billion and a 10% growth in diluted earnings per share to $3.18. The summary also notes that General Mills' major operating divisions all saw sales increases in 2007. General Mills attributes its financial success to factors such as product innovation, channel expansion, international growth, margin expansion, and brand investment.
1) Timken's 2005 annual report summarizes their vision of delivering value to customers through innovative solutions in friction management and power transmission.
2) In 2005, Timken achieved strong financial results including record sales of $5.2 billion and earnings per share of $2.81, nearly double the previous year.
3) Timken's focus on improving costs and productivity, along with investments in high-growth markets like Asia and industrial applications, positions them for continued profitable growth as industrial markets remain strong in 2006.
This document is Timken's 2005 Annual Report which summarizes the company's strong financial performance and growth. The report discusses how Timken's vision of delivering value through friction management and power transmission solutions has guided its expansion into new markets and growth opportunities around the world. Key points include record sales and earnings, investments to support growth, expanding capabilities in aerospace and emerging markets like China, and leadership changes with W.R. Timken stepping down as chairman.
The document summarizes The Home Depot's 2004 annual report. It discusses that in 2004, The Home Depot had record sales of $73.1 billion and saw increases in net earnings, earnings per share, total assets, and store count. Key accomplishments included comparable store sales growth of 5.4%, operating margin reaching 10.8%, and returning $4 billion to shareholders through stock buybacks and dividends. The company focused on enhancing its core business through merchandising resets and new products, extending into new store formats, and investing in its employees.
Whole Foods Market is the largest natural and organic foods retailer in North America. In 2003, it had sales of $3.1 billion, operating income of $175 million, and 145 stores across the US and Canada. The company aims to reach $10 billion in sales by 2010 by continuing to open new, larger stores with an emphasis on perishables and prepared foods.
The document is Campbell Soup Company's 2001 annual report. It summarizes the company's transformation plan to revitalize the business and return to growth. The plan focuses on 5 strategies: 1) revitalizing US soup sales, 2) strengthening the broader portfolio, 3) building new growth avenues, 4) improving quality while driving productivity, and 5) improving organizational excellence. The report provides details on initiatives under each strategy, and discusses financial performance and outlook.
VF Corporation reported financial results for 2000 that were mixed compared to 1999. Net sales reached a record $5.7 billion but operating income and net income declined from the previous year. Earnings per share were reduced by restructuring charges and a change in accounting policy. Throughout 2000, VF took actions to strengthen its brands and position the company for improved financial performance in 2001, including acquiring new brands, exiting unprofitable businesses, consolidating operations, and continuing its share repurchase program.
This annual report summarizes Bed Bath & Beyond's financial performance for fiscal year 2000. Some key points:
- Net sales increased 29% to $2.397 billion compared to the previous fiscal year. Net earnings increased 31% to $171.9 million.
- The company opened 70 new stores and expanded 2 others, ending the year with 311 stores total across 43 states.
- Comparable store sales increased 5% and this was the 9th consecutive year of record earnings since the company's IPO in 1992.
Bed Bath & Beyond had a very successful fiscal year 2000 according to their annual report.
1) Net sales increased 29% to $2.4 billion and net earnings increased 31% to $171.9 million.
2) They opened 70 new stores, more than any previous year, expanding their total store count to 311 stores across 43 states.
3) Looking ahead, Bed Bath & Beyond plans to open about 80 new stores in fiscal year 2001 and believes it can ultimately operate over 850 stores in the US, taking advantage of continued strong industry growth and their small market share.
VF Corporation had a successful 2004 fiscal year. Net sales increased to over $6 billion, up from $5.2 billion in 2003. Operating income grew to $777.8 million compared to $644.9 million the previous year. Income from continuing operations increased to $474.7 million from $397.9 million in 2003. VF aims to continue growing its brands by expanding into new product categories, markets, and distribution channels globally. Employees are passionate about their brands and focused on delivering innovative products and experiences to consumers.
The Pantry, Inc. 2001 Annual Report summarizes the company's strategic moves in fiscal 2001 to strengthen its future. Despite challenges from rising gas prices and economic downturn, the company streamlined processes, enhanced efficiency, and implemented technology initiatives like new reporting and inventory systems. It acquired 45 stores to strengthen its market position but curtailed aggressive expansion. The Pantry focused on cost cuts, improving merchandise sales, and leveraging new fuel pricing systems to balance profits and volume in a volatile gas market. It positioned itself to capitalize on future growth opportunities once market conditions improve.
The Pantry is the second largest independently operated convenience store chain in the US. In fiscal 2001, The Pantry focused on implementing strategic moves to strengthen its future, including streamlining processes, enhancing efficiency, and directing resources to improve operations. Key actions taken were curtailing acquisitions, centralizing administrative functions to reduce costs, and implementing technology solutions to better monitor performance and enhance efficiency at the corporate and store levels. While fiscal 2001 proved challenging due to economic conditions, The Pantry is positioned to benefit from its strategic moves once market conditions improve.
Merrill Lynch reported first quarter 2003 net earnings of $685 million, a 6% increase from $647 million in the first quarter of 2002. Revenues were $4.9 billion, down 5% from the prior year quarter. While commissions revenue declined due to lower transaction volumes, debt trading increased revenues. Expenses decreased 6% to $2.5 billion for compensation and 7% for other expenses through cost cutting. The results demonstrated progress in diversifying revenues despite difficult markets.
Merrill Lynch reported second quarter net earnings of $1 billion, their second-best quarterly earnings ever. Net revenues for the quarter were $5.3 billion, a 7% increase over the previous year. The pre-tax profit margin of 27.6% was the highest in over 25 years. Global Markets and Investment Banking saw a 25% increase in revenues compared to the previous year and achieved a record pre-tax profit margin. Global Private Client revenues declined 6% from the previous year due to reduced transaction activity, but the pre-tax profit margin increased. Merrill Lynch continues initiatives to diversify revenues and leverage client relationships across business segments.
Merrill Lynch reported net earnings of $1.04 billion for Q3 2003, a 50% increase from $693 million in Q3 2002. This was the highest third quarter earnings in company history and the second-best quarterly earnings overall. Revenues increased 16% to $5.1 billion from Q3 2002, driven by strong growth in global markets and investment banking. The pre-tax profit margin rose to 29.8% from 24.2% in Q3 2002.
Merrill Lynch reported record quarterly and annual net earnings for 2003. Net earnings for 2003 were $4.0 billion, up 59% from 2002. Fourth quarter net earnings were $1.2 billion, also the highest ever reported. Global Markets and Investment Banking pre-tax earnings increased 65% for the year due to revenue growth and expense discipline. Global Private Client pre-tax earnings rose 22% for the year due to diverse revenue sources and operating leverage. Merrill Lynch Investment Managers pre-tax earnings declined 11% for the year but rose in the fourth quarter.
- Merrill Lynch reported second quarter net earnings of $1.1 billion, up 10% from the second quarter of 2003. Earnings per share were $1.06.
- Global Private Client and Merrill Lynch Investment Managers saw increased earnings, while Global Markets and Investment Banking saw lower earnings.
- For the first half of the year, net earnings were $2.3 billion, up 44% from the first half of 2003, driven by revenue growth of 13% and improved profit margins.
Merrill Lynch reported record quarterly earnings for Q1 2004, with net earnings up 95% year-over-year to $1.3 billion. Net revenues grew 27% to $6.1 billion, driven by growth across all three business segments. Global Markets and Investment Banking saw increased revenues from debt and equity trading. Global Private Client achieved record pre-tax earnings on higher asset values and net inflows. Merrill Lynch Investment Managers posted a near tripling of pre-tax earnings due to increased assets under management. The company will continue focusing on disciplined growth, diversification, and maintaining strategic balance across its businesses.
Merrill Lynch reported third quarter net earnings of $920 million, down 8% from the previous year. For the first nine months of the year, net earnings were $3.3 billion, up 24% from the same period last year. While markets were challenging in the quarter, the company's diversification efforts helped deliver solid results. Merrill Lynch continues investing in key growth initiatives across its business segments.
Merrill Lynch reported record results for full year 2004, with net earnings of $4.4 billion, up 16% from 2003. All three of Merrill Lynch's business segments - Global Markets and Investment Banking, Global Private Client, and Merrill Lynch Investment Managers - contributed to this performance by generating higher revenues and pre-tax earnings compared to 2003. In the fourth quarter of 2004 specifically, net revenues increased 21% to $5.9 billion compared to the same period in 2003. Merrill Lynch's chairman and CEO stated that the company is well positioned for continued shareholder rewards in the future.
Merrill Lynch reported first quarter 2005 net earnings of $1.2 billion, down 3% from the first quarter of 2004. Diluted earnings per share were $1.21. Net revenues increased 3% to $6.2 billion from the first quarter of 2004. Merrill Lynch also announced a new $4 billion share repurchase program and raised its quarterly dividend per share by 25%.
Merrill Lynch reported second quarter 2005 earnings per share of $1.14, up 9% from the second quarter of 2004. This was the highest earnings per share Merrill Lynch has achieved in a second quarter. Net revenues increased 20% compared to the prior year quarter. All three of Merrill Lynch's business segments - Global Markets and Investment Banking, Global Private Client, and Merrill Lynch Investment Managers - saw increases in net revenues and pre-tax earnings compared to the second quarter of 2004. Merrill Lynch had record first half earnings per share, pre-tax earnings, and net earnings for the first six months of 2005.
Merrill Lynch reported record quarterly earnings for Q3 2005, with net earnings per share of $1.40, up 51% from the prior year. Net revenues were $6.7 billion, up 38% year-over-year. All three business segments - Global Markets and Investment Banking, Global Private Client, and Merrill Lynch Investment Managers - saw revenue and earnings increases. Merrill Lynch's performance was driven by strong growth across its businesses and the benefits of investments made over the past two years.
Merrill Lynch reported record earnings for 2005, with earnings per share of $5.27, up 20% from 2004. Net earnings were $5.2 billion, up 18% from 2004. All three of Merrill Lynch's business segments - Global Markets and Investment Banking, Global Private Client, and Merrill Lynch Investment Managers - generated record pre-tax earnings and higher revenues compared to 2004. Merrill Lynch also announced a 25% increase to its quarterly common stock dividend to $0.25 per share.
Merrill Lynch reported record quarterly net revenues of $8.0 billion for Q1 2006, up 28% from Q1 2005. Net earnings were $475 million, though excluding one-time compensation expenses earnings were $1.7 billion, up 36% from Q1 2005. All three business segments saw increased net revenues both sequentially and year-over-year. Global Markets revenues rose 37% to $4.6 billion due to strong performance across equity, debt, and investment banking. Global Private Client revenues increased 13% to $2.9 billion on higher fees and client assets. Merrill Lynch Investment Managers revenues grew 38% to $570 million on higher assets under management.
Merrill Lynch reported record quarterly net revenues of $8.2 billion for Q2 2006, up 29% from Q2 2005. Net earnings were $1.6 billion for Q2 2006, up 44% from Q2 2005. All three business segments - Global Markets and Investment Banking, Global Private Client, and Merrill Lynch Investment Managers - delivered substantial year-over-year revenue and earnings growth. Merrill Lynch also achieved several business and financial records in Q2 2006. Looking forward, Merrill Lynch will continue investing in talent and technology to build capabilities and achieve future growth.
This document is a press release from Merrill Lynch announcing record third quarter and year-to-date 2006 earnings. Some key points:
- Third quarter net earnings were $3.0 billion, or $3.17 per diluted share, up significantly from third quarter 2005. Excluding a one-time gain from the BlackRock merger, EPS was $2.00, up 43% from third quarter 2005.
- Year-to-date net earnings and EPS were also records at $5.2 billion and $5.19 respectively, up 38% from the same period in 2005. Excluding one-time items, year-to-date EPS was $5.27, up 40% from 2005
Merrill Lynch reported record financial results for full year 2006, with net revenues of $34.7 billion, net earnings of $7.5 billion ($7.59 per share), and return on equity of 21.3%. The fourth quarter saw net revenues of $8.6 billion, net earnings of $2.3 billion ($2.41 per share), and return on equity of 25.6%. Business segments Global Markets and Investment Banking and Global Wealth Management both had strong growth in revenues and earnings for the full year and fourth quarter. Merrill Lynch was well positioned for continued growth in global markets and wealth management.
Merrill Lynch reported strong financial results for the first quarter of 2007, with net revenues of $9.9 billion, up 24% from the first quarter of 2006. Net earnings were $2.2 billion, up 354% from the prior year period, driven by record revenues in fixed income, currencies and commodities, equity markets, and investment banking. Global wealth management also saw growth, with record fee-based revenues and client assets totaling $1.6 trillion, up 10% from the year before. Looking forward, Merrill Lynch expects continued growth and remains focused on disciplined expansion.
Merrill Lynch reported strong financial results for the second quarter and first half of 2007, with record revenues and earnings. Net revenues for Q2 2007 increased 19% year-over-year to $9.7 billion, while net earnings increased 31% to $2.1 billion. Both Global Markets and Investment Banking and Global Wealth Management saw record revenues. For the first half of the year, net revenues were up 21% to a record $19.6 billion, with net earnings up 104% to $4.3 billion. Merrill Lynch exceeded expectations in a volatile market environment and saw continued growth across all business segments and global regions.
- Merrill Lynch reported a net loss from continuing operations of $8.6 billion for full year 2007, significantly below net earnings of $7.1 billion in 2006. The loss was primarily driven by significant declines in Fixed Income, Currencies & Commodities (FICC) net revenues in the second half of 2007, which more than offset record revenues in other business lines.
- For Q4 2007 specifically, Merrill Lynch reported a net loss from continuing operations of $10.3 billion, down substantially from net earnings of $2.2 billion in Q4 2006. This was mainly due to large write-downs related to mortgage-backed securities and hedges with financial guarantors.
- Several
Merrill Lynch reported a net loss of $1.97 billion for Q1 2008 compared to net earnings of $2.03 billion in Q1 2007. Revenues fell 69% to $2.9 billion due to write-downs related to US ABS CDOs and credit valuation adjustments on hedges with financial guarantors. However, Global Wealth Management saw record quarterly revenues with strong fee income and $9 billion in annuity inflows. While investment banking revenues fell 40% due to lower deal volumes, the business pipeline was only down 5% overall from year-end levels.
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Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
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CVS Caremark 2000 Annual Report
1. Achieving Our Goal:
To be the most
customer-focused,
innovative,
convenient
and
healthcare service
retailer in America.
2000 Annual Report
CVS Corporation
2. 2000
ment
A Year of Great Achieve
on a comparable
total sales jumped 13%
• Our
billion.
52-week basis to $20.1
le pharmacy same
store sales rose 11%, whi
• Same
.
store sales climbed 18%
advanced 18% on a
• Our earnings per share
sis.
comparable 52-week ba
iptions than any
again filled more prescr
• We once ely
, dispensing approximat
other retailer in America
300 million in 2000.
ding
d relocated stores, inclu
We opened 388 new an
•
ended the year with a
CVS ProCare stores, and
35
record 4,133 stores.
substantial growth
tered new markets with
• We en
ndo and Tampa.
potential: Chicago, Orla
y 1,100 extended-hour
w operate approximatel
• We no
ies and 3,000 one-hour
200 drive-thru pharmac
stores, 1, s.
e easier for our customer
photo labs—making lif
adtlander Pharmacy,
eted the acquisition of St
• We compl ialty
in the fast-growing spec
making CVS ProCare #1
pharmacy market.
tly
n in free cash, significan
e generated $384 millio
•W
l.
higher than 1999’s leve
t
than 50% and our marke
stock price soared more
• Our
4 billion.
capitalization grew to $2
3. Financial Highlights
2000 1999
In millions, except per share (52 weeks) (53 weeks) % Change
Sales $ 20,087.5 $ 18,098.3 11.0
Operating profit* 1,303.5 1,135.5 14.8
Net earnings* 734.5 635.1 15.7
Diluted earnings per common share* 1.80 1.55 16.1
Closing stock price per common share 59.94 39.88 50.3
Sales Operating Profit*
(in Billions) (in Millions)
$ 1,303.5
$ 20.1
$1,135.5
$18.1
$940.5
$15.3
$13.7
$779.1
$11.8
$604.7
96 97 98 99 00 96 97 98 99 00
Five-year compounded Five-year compounded
annual growth rate 13.8% annual growth rate 21.8%
Earnings from Earnings Per Common Share
Continuing Operations* from Continuing Operations*
(in Millions) (Diluted)
$ 734.5
$1.80
$635.1
$1.55
$510.1
$1.26
$419.2
$1.05
$0.78
$306.8
96 97 98 99 00 96 97 98 99 00
Five-year compounded Five-year compounded
annual growth rate 28.4% annual growth rate 27.7%
* Excludes the effect of the merger, restructuring and other nonrecurring charges and gain that were recorded in 2000, 1998, 1997 and 1996. See page 39 for further information.
4. To Our Shareholders
The year 2000 was an exceptional year for CVS by any measure. We achieved con-
tinued strong financial results, including record sales, operating profit and net earnings.
We also made significant strides toward our goal of being the most customer-focused,
innovative and convenient healthcare service retailer in America, with four comple-
mentary and growing healthcare businesses—CVS/pharmacy, ProCare, PharmaCare,
and CVS.com—serving the needs of all our customers.
Excellent Financial Performance and
Shareholder Returns
“We are a recognized
Net sales for the year reached a record $20.1 bil-
lion, up 13% from $17.7 billion in 1999 (on a compa-
leader in our industry and
rable 52-week basis), while same store sales surged
believe CVS is better
11% and led the industry. Net earnings, excluding a
one-time gain of $19 million related to a litigation
positioned than at any
settlement, advanced to a record $735 million, or
$1.80 per share, up 18% from $1.52 per share in 1999
time in the Company’s
on a comparable 52-week basis. We continue to gen-
erate significant free cash flow, reaching $384 million
history to capitalize on
in 2000, ahead of our goal and significantly higher
than the $233 million we reported in 1999. This out- the significant opportunities
standing performance solidified our track record of
in healthcare.”
meeting or beating Wall Street’s expectations every
quarter since we became a stand-alone public com-
pany in the Fall of 1996, and has translated into
excellent returns for our shareholders.
For the year, CVS’ share price climbed more than 50%, compared with a 6% decline
in the Dow Jones Industrial Average, and a 10% decline in the S&P 500 Index. In con-
trast to 1999, when investors flocked to technology stocks and, more specifically, to
pure-play Internet stocks, investors have now come back to companies such as CVS
that offer the best of both worlds: old economy fundamentals with above average
growth and new economy innovation.
America’s Pharmacy Leader
The drugstore industry remains extremely vibrant, possessing
perhaps the most compelling growth demographics in all of
retail—and CVS is America’s #1 Pharmacy. With 4,133 locations,
we operate more drugstores than any other company in the U.S.
Our pharmacy business continues to register phenomenal same
store sales growth, up nearly 18% in 2000. In fact, more
prescriptions are filled at CVS/pharmacy than at any other
retailer. The $140 billion pharmacy industry will continue to
be among the fastest-growing segments of the retail sector,
CVS pharmacists filled approximately 300 million
prescriptions in 2000, providing pharmacy 2
counseling to millions of customers.
CVS Corporation
5. driven by the introduction of new drugs and
the aging American population. We contin-
ue to capture an increasing share of this
expanding market.
Our front-end business also continues
to thrive, achieving broad-based category
growth.We gained market share in all core
categories, including photo, skin care,
hair care, candy, cold and stomach reme-
dies, diet/nutrition and cosmetics. Our
unique photo offerings, which integrate
our in-store photo processing business
with digital uploads onto the Kodak
Picture Center® at CVS.com, have gen-
erated excellent results. In 2000, we
became the #1 online photo provider
Thomas M. Ryan Chairman of the Board,
in the U.S.
President and Chief Executive Officer
We are very enthusiastic about
the benefits we can derive from
greater customer loyalty through our
new relationship marketing program, ExtraCare®. We recently rolled out our ExtraCare
card chainwide and expect to create superior value for our customers, unmatched by
competitors’ programs.
Growing by Remaining Focused on Our Vision
To achieve our objective of being the most customer-focused, innovative and con-
venient healthcare retailer in America, we have concentrated our efforts on building
our presence in the nation’s top drugstore markets.We have added our traditional CVS/
pharmacy stores, through organic growth or strategic acquisitions, and developed new
channels, such as ProCare and CVS.com, to meet the needs of all our customers.
CVS currently enjoys the #1 or #2 market share in 75% of the top markets in which
we operate. We have a presence in 59 of the top 100 U.S. drugstore markets, which
leaves 41 of the top 100 markets for CVS’ possible expansion, many of which are under-
served and offer tremendous potential.
During 2000, we opened or relocated 388 stores. These included new CVS and
ProCare stores in current and new markets as well as relocations of existing units to more
convenient sites. We also took advantage of opportunities to expand into markets that
we identified as having strong fundamentals for drugstores. We recently entered the
Chicago market, currently the 2nd largest drugstore market in the U.S., and we
launched an aggressive expansion into several Florida markets, beginning with Tampa,
the 16th largest drugstore market, and Orlando, the 27th largest. In February 2001 we
announced plans to build CVS/pharmacy stores in two of the fastest-growing drugstore
3
2000 Annual Report
6. markets in the U.S.—Phoenix, Arizona and Las Vegas, Nevada. We will announce our
intentions to enter several new markets each year, but at a pace that will allow us to sus-
tain our strong earnings growth progression.
Our 1997 acquisition of Revco D.S. Inc. and our 1998 acquisition of Arbor Drugs, Inc.
provided us with leadership in new markets, earnings accretion and incremental
upside potential. Both companies have been fully integrated—from a systems, people
and operational perspective—and are performing very well. Additionally, the busi-
nesses we acquired have become important sources of idea generation for further
enhancing the performance of the entire company.
CVS ProCare: #1 in a Fast-Growing Industry
One of our successful new channels,CVS ProCare,has grown to become an important
complement to our core CVS drugstore chain by enabling us to reach a new customer
segment with specialized pharmacy needs. We introduced our first CVS ProCare
apothecaries in 1999 and, during 2000, accelerated the expansion of this business
through our acquisition of Stadtlander Pharmacy, a leading specialty pharmacy com-
pany, and the addition of new ProCare locations.The acquisition of Stadtlander provided
CVS with the nation’s largest specialty retail/mail business. ProCare is now the #1 player
in the highly fragmented, rapidly growing, $14 billion market for patients
requiring complex and expensive drug therapies for long-
term health conditions—and the only specialty pharmacy
player with integrated retail and mail order services. We
expect the addition of Stadtlander to help propel ProCare to
a $2+ billion business within three to four years.
Our expansion of ProCare parallels, in many respects, the
growth we have achieved over the years with our PharmaCare
subsidiary. Designed to meet the needs of a specific customer
audience—managed care organizations—PharmaCare has
become one of the top pharmacy benefit management companies
(PBMs) in the nation, currently managing more than 9 million lives.
Through its proprietary systems and services, PharmaCare has
enabled the managed care community to provide its members with
the best healthcare in the most cost-effective manner, while assuring
We now operate 46 CVS ProCare specialty phar-
acies across the U.S., serving customers requiring CVS’ presence in this growing segment of the healthcare industry.
complex and expensive prescription therapies.
CVS.com: A Winning “Clicks and Mortar” Strategy
CVS.com has provided us with a new vehicle to enhance the convenience and
value we offer customers…on the corner, on the phone, and on the web. Through
unique partnerships with healthcare leaders, we are providing a level of healthcare
information and services unmatched by our competitors, backed by the trusted CVS
brand name. The strength of the “clicks and mortar” drugstore format is evidenced by
the fact that approximately 70% of CVS.com’s pharmacy customers choose in-store
4
CVS Corporation
7. pickup. In markets where we have CVS/pharmacy
stores, more than 90% choose in-store pickup. We are
continuing to drive growth in the business, and we expect
CVS.com to be profitable by no later than 2002.
CVS’ Strong Outlook
I believe CVS is better positioned than at any time in
the Company’s history to capitalize on the significant
opportunities in healthcare. We are optimistic that we can
achieve our targets for top-line and bottom-line growth
while we continue to invest for the future. CVS is the leading
More than 90% of customers who use CVS.com in
player in an industry that is itself vibrant and growing. We our markets choose to pick up their prescriptions
have dynamic and expanding businesses in multiple segments in our stores, confirming the strength of our
“clicks and mortar” format.
of the retail healthcare industry, proven strategies in place, and
a solid financial position. Our investments in new technology,
such as the EPIC pharmacy system and our Assisted Inventory Management program,
are expected to have a positive impact on efficiency and profitability. And, we expect
to reap the benefits of our participation in the Worldwide Retail Exchange (WWRE)
through better communications and streamlined ordering processes with our suppli-
ers. CVS was a founding member of the WWRE, which has grown to encompass 53
companies representing more than $700 billion in combined retail revenue.
CVS’ success in 2000 was directly attributable to the hard work and commitment of
our 100,000 colleagues, and I want to thank each of them for their contributions. We
also appreciate the wise counsel of our Board of Directors and the loyal support of our
business partners and customers. We thank you, our shareholders, for your continued
confidence in CVS, and we look forward to reporting on our future successes.
Thomas M. Ryan
Chairman of the Board,
President and Chief Executive Officer
5
2000 Annual Report
8. Positioned for Growth
America’s #1 Pharmacy It is estimated that 35 “block-
buster” drugs, with the poten-
Customer-focused, innova-
…the most tial to generate more than $1
tive and convenient healthcare
billion in annual sales each, are
customer-focused...
strategies have propelled CVS
in the final stages of trial. This
to #1 on the list of U.S. drug-
strong pipeline bodes well for
store chains. More people filled
the future, as 40% of pharma-
their prescriptions at CVS last
“More people trust ceutical sales are historically
year than at any other drugstore.
generated by drugs developed
CVS for their
Our pharmacy sales climbed
within the preceding five years.
17% to nearly $13 billion, repre-
healthcare needs At the same time, patents
senting 63% of our total annual
on an estimated $40 billion
revenues. Moreover, given the
than any other worth of branded drugs are set
highly attractive fundamentals
to expire over the next 10 years,
drugstore chain
of the retail pharmacy industry,
opening the door for generic
we expect this strong growth to
in America.” alternatives. That’s good news
continue.
for our customers, who will
benefit from lower prices.
Key Trends Driving Growth Demographic trends and the expansion of man-
The retail pharmacy industry is a $140 billion market aged care are also playing substantial roles in driving
with a projected compound annual growth rate of retail pharmacy
more than 13% through 2004. The increases in phar- growth. With mem-
maceutical sales are being fueled by the convergence bers of the “Baby
of a number of positive trends. Drug companies are Boom” generation
introducing a steady stream of new pharmaceuticals moving into their
into the marketplace, while investing heavily to 50s, demand for pre-
advertise these products directly to the consumer. scriptions should con-
tinue to accelerate.
Individuals over age
65 take approximately
16 prescriptions per
year, compared to about
six prescriptions annually
for Americans under age
45. We have found that Demand for prescriptions continues to
when people switch from rise as the population ages, and CVS
continues to capture an increasing
no prescription coverage to
share of this growing market.
a managed care plan requiring
only a customer co-pay, prescription use nearly dou-
bles. These trends, coupled with the possibility of a
CVS led the industry with an 18% increase
prescription drug benefit for Medicare enrollees, pro-
in pharmacy same store sales in 2000.
vide further catalysts for continued pharmacy growth.
6
CVS Corporation
9. CVS’ Technological Edge
We have positioned CVS to capture a growing share
of the expanding pharmacy market by achieving an
industry leadership position and utilizing technology
to enhance our capabilities. A cornerstone of our phar-
macy strategy is our Excellence in Pharmacy Innovation
and Care (EPIC) project, which will help us maintain our
pharmacy leadership as the industry low-cost provider
of prescriptions. Through workflow improvements and
proprietary technology, we are able to let pharmacy tech-
nicians who have completed a comprehensive training
program perform many of the tasks related to filling a
prescription. This frees our pharmacists to spend more
time doing what they were trained to do—counsel
patients and oversee drug interaction reviews. We are
also adding pill-counting automation to our higher-
volume stores to improve productivity and reduce wait
times for customers. As we continue to roll out the EPIC
program throughout our stores, we expect to see
improved quality assurance and customer service, while
reducing labor costs throughout the Company.
We were the first in the industry to introduce Drug
Utilization Review (DUR) technology that checks for
harmful interactions between prescription drugs, over-
the-counter products, vitamins and herbal remedies.
Our DUR system reduces the risk of adverse drug
interactions by cross-checking each prescription
against other medications that a patient may be
taking. It is unique in that it also looks for potential
incompatibilities between prescriptions and over-
the-counter medications. As a result of DUR, custo-
mers who fill their prescriptions at CVS can be confi-
dent that the latest technology is working to improve
their health and safety.
Programs like EPIC underscore our role as the
clear industry leader in introducing new technologies
as well as our commitment to quality assurance. We
were also the first in the industry to install a chain-
wide automated prescription refill system. We call it
the Rapid Refill System because it lets customers
renew prescriptions, 24 hours a day over the phone,
without having to speak directly to someone in our
The aggressive rollout of EPIC, our state-of-the-art pharmacy
store.This provides greater convenience for our custo-
workflow modernization program, began in 2000. EPIC will help
mers by eliminating wait time, and benefits CVS by streamline the prescription filling process by using new
reducing labor costs and improving our productivity. information technology hardware and software systems.
7
2000 Annual Report
10. Fro n t - E n d B u s i n e s s
Unparalleled Convenience in the
Front Store
Today’s busy customers appreciate convenience.
Therefore, our strategy at CVS has been to find the
most convenient locations and to develop in the front
of our stores the best selection of merchandise to meet
our customers’ everyday needs.
Unique Products Exclusive to CVS
One of the ways that we create value for CVS cus-
tomers is by offering products and services that are
unique to CVS. Because of our size and scale, we are
able to forge partnerships with some of the nation’s
largest manufacturers to jointly develop merchandis-
ing strategies solely for CVS. For example, in 2000 we
teamed up with Procter & Gamble to launch grl>lab®,
an area in our stores featuring beauty, hair and other
accessory items that are relevant to teenage girls.
grl>lab will help us grow by reaching out to a whole
new group of convenience shoppers, who we hope
will remain loyal customers into their adult lives.
We tailor our stores to focus on key customer
segments. For example, we have a Women’s Health
Initiative focusing on the health needs of women with
specific conditions, such as diabetes or osteoporosis.
We also carry ethnic beauty products in certain mar-
kets. We further reinforce CVS’ convenience through
an accessible, easy-to-shop store format and our
extended hours.
Private label and controlled label products serve
as another important vehicle for differentiating CVS
from its drugstore and mass merchant competitors.
During 2000, we introduced a line of exclusive bath
and body products under the Essence of Beauty®
brand name.The early results demonstrate the gener-
ation of strong repeat purchases and customer traffic
in our stores; therefore we have already begun to
add new products to the Essence of Beauty line.
We also continue to register solid growth in
our CVS-brand products, which increased 7% and
represented 12% of our total front-store sales. We
Our new grl>lab area is designed to capture the attention of teenage girls by
offering beauty, hair and other accessory items in a fun and appealing environment.
The introduction of grl>lab is part of CVS' efforts to establish loyalty at an early
age by an important group of core customers.
11. now have more than The most dramatic front-end growth occurred
1500 CVS-brand last year in our photo business where sales rose more
products, including than 20%, and our market share of Kodak’s business
over-the-counter increased significantly. To enhance convenience, we
items and health and added more one-hour labs in 2000, reaching a total of
beauty aids, as well as 3,000 chainwide. At the same time, we have been at
our premium line of the forefront in introducing new photo-related serv-
Gold Emblem® snacks ices. For example, we now offer a service that allows
and beverages. These customers to drop off film from a regular camera and
private label products have their pictures uploaded onto the Kodak Picture
offer quality and cost sav- Center® at CVS.com. The popularity of this site has
ings for our customers and made it the industry’s fastest-growing photo-sharing
competitive profit margins service, making us Kodak’s #1 online customer. We
CVS’ exclusive Essence of Beauty bath
and body products have received an for us. continue to explore opportunities for the introduction
excellent response, generating strong
of other unique photo services.
repeat purchases.
We aim to
further enhance
CVS’ First-to-Market Advantage our value to custo-
mers through the
For those new products that are not exclusive to
introduction in
CVS, we place a priority on bringing these items to
2001 of a new
market faster than our competitors. Our success with
branded relationship
the introduction of Olay Total Effects® demonstrates
marketing initiative,
the benefits of this strategy. By being first to market,
ExtraCare®, making us
CVS has achieved a 36% share within the total U.S.
the only major drug-
drug market, significantly higher than our 23% mois-
store with a loyalty
turizer segment share. We have found that being first
program chainwide.
to market allows us to build sustainable market share
This initiative has been
ahead of our competitors and reinforces our innova-
tested in six markets
tion with consumers.
CVS operates 3,000 one-hour photo labs, up from
for a number of years,
2,000 in 1999, and our share of the U.S. photo
enabling us to continu-
…innovative… processing market continues its rapid growth.
ally refine our program.
Through ExtraCare, we are offering special promotions
and incentives to our best customers, to reward their
“We take pride patronage of CVS and encourage higher loyalty. For
example, benefits may include opportunities to earn
in knowing our rewards and free merchandise in select categories
customers, and creating through support from our vendor partners, exclusive
savings on purchases, access to special mailings with
unique products and highly customized coupons and health information,
automatic sweepstakes entries, and participation in a
services to meet college savings program. CVS is the exclusive pharmacy
participant in UPromise, a savings network that makes
their different and
it easy for families to accelerate savings for college
changing needs.” through partnership with America’s most trusted brands.
9
2000 Annual Report
12. Innovative Technology to
Improve Efficiency
Consistent with other areas of our business, we
are investing in technology to improve efficiency and
maximize performance in our front-store operations.
Computer-assisted ordering is lowering inventory
levels in selected categories, and we are testing ven-
dor-managed inventory programs with key over-the-
counter and prescription suppliers. We believe that
the reduction of inventory levels will accelerate our
ability to reach our return on invested capital goals.
In addition, we are continuing to reap the benefits of
our Promotional forecasting and allocation system,
which helps reduce promotional out-of-stocks, increase
sales and reduce seasonal residual inventories. After
a pilot test in more than 30 stores, we are also rolling Our new Tampa store represents entry into a
high-growth market that capitalizes on the Company's
out an improved store-level system, Assisted Inventory
name recognition among the thousands of people
Management, or AIM, which we believe will signifi- who have migrated from current CVS markets.
cantly reduce out-of-stocks, drive sales and improve
inventory productivity.
New Store Grow th Program
Real Estate Strategy
…and convenient…
The location and expansion of our store base are
critical components of CVS’ success. We place a high
priority on both the quality of the markets we enter
“We place a high
and the sites we select. We focus on three key strate-
priority on selecting gies: 1) entering new markets, 2) adding stores within
existing markets, and 3) relocating stores to more con-
prime locations, venient, freestanding sites. During 2000, we opened
a total of 388 stores, including new stores, relocations
which offer our
and ProCare apothecaries.
customers convenient Through sophisticated analysis that includes
extensive market research and the use of proprietary
access to CVS and CVS software systems, our CVS Realty team is able to
identify the prime locations for our stores, right down
generate strong sales.”
to a specific corner at an intersection. We take advan-
tage of statistical and in-the-field research, as well as
our own spatial modeling software, to reach impor-
tant conclusions about the various demographic and
other factors that drive growth in our stores. As a
10
CVS Corporation
13. New High-Growth Markets
result, when we open a new store or enter a new
market, we can be confident in the potential of the
In 2000, we entered four new markets: Chicago,
investments we are making and their ability to
Illinois; Grand Rapids, Michigan; and Tampa and
deliver an attractive return on invested capital over
Orlando, Florida. Chicago is the 2nd largest drugstore
the long term.
market in the U.S., and our expansion here supports
We remain committed to carefully controlled
our strategy to grow in high-quality markets with
and managed growth and, in that regard, the vast
substantial potential. Our early results suggest that
majority of new market stores will be delivered
these stores will exceed our expectations.
through our highly successful preferred developer
We also launched an aggressive growth initiative
program. These arrangements afford us maximum
in Florida. During 2000, we opened stores in Tampa,
flexibility and have greatly mitigated occupancy
the 16th largest market in the U.S., and in Orlando,
costs, as the pricing of these transactions reflects
the 27th largest market, and we have plans to enter
our superior credit worthiness.
Fort Lauderdale, the 23rd largest market, in 2001.
We currently operate stores in 59 of the top 100
These are especially promising markets for CVS; the
U.S. markets. In 34 of those markets, we are the #1
population in these Florida locations is expected to
drugstore chain. The 41 top markets we are not in
grow at a rate three times that of the population in
represent enormous untapped potential for two
our most successful markets. Our strong name recog-
reasons: their populations are growing and they are
nition precedes us among thousands of people who
underserved. In 2001, we expect more than one third
have migrated to Florida from northern cities where
of all new CVS stores will be in new markets. Our
CVS already has a strong presence.
growth plan is structured to allow us to achieve this
goal while sustaining strong earnings growth. Our entry into the Grand Rapids market was a
Through sophisticated analysis, CVS is able to pinpoint prime locations for new stores, such as our new
store in Orlando pictured below, which will deliver attractive returns on invested capital over the long term.
14. C V S Pro c a re
natural extension from our #1 position in Detroit, the
4th largest drugstore market. Since our acquisition
of Michigan-based Arbor Drugs, Inc. in 1998, we have
America’s #1 Specialty Pharmacy:
reinforced and built upon our presence in this highly
CVS ProCare
attractive market.
During 2000, we solidified CVS’ position as the
Economic Lift from Relocations leading provider of specialty pharmacy services
Store relocations, the third leg of our real estate through our CVS ProCare subsidiary. We now operate
strategy, are highly productive investments for CVS. 46 ProCare apothecaries in 18 urban markets across
When we relocate a store from an inline shopping the U.S., and, with our September 2000 acquisition of
center to a freestanding, convenient corner location, Stadtlander Pharmacy, we have established ProCare
we typically generate 25% to 35% higher front-end as the largest specialty mail order pharmacy in the
sales, improved margins and a better return on invest- nation. Importantly, we are the only specialty phar-
ed capital than the stores they replace. The new sites, macy provider offering integrated retail and mail
which are in higher-profile locations with convenient order services.
parking, have more appeal to consumers. Today, nearly We launched ProCare with the objective of
40% of our stores are in freestanding locations. Our providing a pharmacy resource uniquely focused
goal over the next five to seven years is to reach 80%. on serving patients with chronic conditions, such as
Although the number of relocations will decrease over HIV/AIDS, organ transplants, infertility, multiple scle-
time, our relocation strategy will remain an important rosis and cancer. Estimated at $14 billion in size today,
component of our overall growth strategy. the specialty pharmacy market is growing at an annual
rate of 20%, with much of this growth being driven by
medical advancements.
ProCare pharmacists are active patient advocates and partner with physicians, pharmaceutical
manufacturers and other healthcare providers to offer in-depth patient treatment and counseling services.
15. ProCare’s Unique Business Model We have created a sophisticated platform to
manage these billing issues, including our customers’
A major factor differentiating the needs of spe-
insurance claims and our own receivables. This is not
cialty and traditional pharmacy customers is the cost
only a valuable convenience for our customers but
of treatment. Specialty pharmacy customers often
also sets us apart from many smaller competitors that
require complex, highly expensive drug therapies
have been unable to develop an effective system for
over an extended period of time. While it is impracti-
managing receivables and insurance-related billing
cal to stock such medications in more than 4,000
requirements.
CVS/pharmacy stores, we are able to maintain inven-
Our growth strategy calls for the continued expan-
tories in our ProCare apothecaries, where we have
sion of ProCare, with a goal of operating
steady demand for
100-125 strategically located ProCare
these products.
apothecaries within a few years. These
ProCare’s emphasis
retail stores are an important mechanism
on healthcare is
for establishing ties with local commu-
further reinforced in
nities. We have opened ProCare apothe-
I N D I V I D U A L N E E D S . I N D I V I D U A L C A R E.
the front of the store,
caries in markets not currently served
which is stocked
by CVS/pharmacy, such as Texas, Oregon and California,
with wellness-oriented products such as alternative
where there is significant demand for specialty phar-
medications, homeopathic remedies and vitamins.
macy services. In addition, we will continue to evaluate
Due to the high cost of treatment, there are
opportunities to make acquisitions, like Stadtlander,
complex billing procedures associated with specialty
that accelerate our market leadership position.
pharmacy. ProCare customers often have primary,
secondary and even tertiary insurance.
C V S . co m
America’s 1st Major Integrated
Pharmacy and Front-End Offering
…healthcare CVS.com was the industry’s first major “clicks and
mortar” pharmacy to offer pharmacy and front-end
service retailer… products, a perfect example of how we have been
putting innovative technology
to work to make life more
“CVS is on the corner, convenient for our customers.
CVS.com provides 24-hour
on the phone and access to registered pharma-
cists through the Internet
on the web, offering or via a toll-free telephone
healthcare products and number. Visitors to CVS.com
can research health-related
services to meet all of information or shop for
thousands of over-the-
our customers’ needs.” The CVS.com Pharmacy Counter offers
counter items at highly prescription refills and advice
competitive prices. for Internet customers.
13
2000 Annual Report
16. They can pick up their purchases at the nearest CVS/ a total e-connectivity solution that will improve
pharmacy or have them delivered to their homes. healthcare delivery by directly linking physicians,
In only its second year of operation, the CVS.com pharmacists and patients
site has been significantly enhanced and is on its way over the Internet. In the
to profitability by no later than 2002. In fact, in recent long term, we will roll
Gomez rankings, CVS.com was ranked among the top out additional pro-
pharmacy sites. grams that will link our
About 70% of CVS.com’s pharmacy customers Internet business with
choose in-store pickup of their prescriptions. In mar- our stores in order to
kets where we have stores, however, more than 90% deliver greater value
choose in-store pickup, indicating the significance of to customers.
a “clicks and mortar” strategy.
We have entered into two important strategic
partnerships, with Merck-Medco and WebMD.
We now have the exclusive right to sell over-the-
counter medications, such as vitamins, herbal
remedies and health and beauty aids, to Merck-
Customers who get their film developed at
Medco.com customers, gaining exposure to Merck- CVS can have their pictures uploaded to
Medco’s 53 million members nationwide, many of the Kodak Picture Center® at CVS.com,
a popular and fast-growing service.
whom are in areas west of the Mississippi where
CVS does not yet have a presence. Early sales from
the site are robust. WebMD became our exclusive
provider of health
content, providing
our customers with
Internet access to reli-
…in America.
able health-related
information from
expert sources.
We made the deci- “At CVS, we believe it is
sion in 2000 to relocate
important to become part of
CVS.com’s operations
to our headquarters
every community we serve,
in Rhode Island to
better leverage our supporting healthcare and
Our private label vitamins, herbal remedies existing retail support
and nutritional supplements are available
educational initiatives,
infrastructure and to
not just in our stores, but online as well.
accelerate our path
and training thousands of
to profitability. Our vision for this fast-growing new
workers through the
business includes providing a vehicle for physicians
to write prescriptions and send them directly to
Welfare-to-Work program.”
pharmacies via the Internet. We are working toward
14
CVS Corporation
17. Community Involvement
Serving America’s Communities
Corporate philanthropy and community involvement
are integral parts of how we do business. By focusing
on health and education, CVS seeks to maximize the
impact of our charitable resources.
Our desire to improve the communities in which we
do business has extended into the workforce through
our support of the Welfare-to-Work program. We have
transitioned 10,000 welfare recipients to work, training
them as pharmacy technicians, photo technicians and
supervisors. Identified by President Clinton as a leader
in this area, CVS is one of a number of prominent
national companies that have embraced the Welfare-
to-Work concept, providing jobs that benefit our com-
munities. Our industry-leading retention rate, achieved
through training and public/private partnerships, helps
to increase employment and productivity while main-
taining the economic health of both the Company
and the nation.
Our longstanding charitable initiatives continue
to thrive.The Innovations Grants Program is in its ninth
year of providing funds for cutting-edge education
programs in the communities where we are located.
Through our Volunteer Challenge Grants Program,
CVS colleagues who volunteer for community organ-
izations obtain corporate donations from CVS that
benefit those organizations, and ultimately the com-
munities they serve.
Other national programs that help our communi-
ties include Reach Out and Read, a children’s literacy
program that provides children’s books to physicians’
offices; the CVS/Samaritan Vans, which patrol the
nation’s highways and offer free roadside assistance
to motorists; and major financial support for United
Way agencies and other local and national charities.
CVS is also a leading sponsor of the CVS Charity Golf
Classic, an annual tournament featuring PGA pros
that has contributed almost $900,000 to dozens of
CVS is actively involved in the communities we serve.
charities in just two years.
Our philanthropic and community service efforts focus
These initiative contribute to the fulfillment of on healthcare and education programs.
our mission to help people live longer, healthier,
happier lives.
15
2000 Annual Report
18. Store Count by State
137 Alabama 19 Maine 388 Ohio
172 Maryland 1 Oregon
Arizona
*
9 California 324 Massachusetts 342 Pennsylvania
125 Connecticut 240 Michigan 55 Rhode Island
2 Delaware 1 Minnesota 177 South Carolina
31 Florida 1 Missouri 141 Tennessee
280 Georgia 4 Texas
Nevada
*
1 Hawaii 29 New Hampshire 2 Vermont
73 Illinois 209 New Jersey 244 Virginia
274 Indiana 404 New York 1 Washington
67 Kentucky 275 North Carolina 50 Washington, D.C.
55 West Virginia
* New Markets Announced in February 2001 include Phoenix, Arizona and Las Vegas, Nevada.
4,133 Stores
ProCare Retail Sites (46)
CVS Markets
16
CVS Corporation
19. 2000 Financial Report
Management’s Discussion and Analysis of
18
Financial Condition and Results of Operations
21
Management’s Responsibility for Financial Reporting
21
Independent Auditors’ Report
22
Consolidated Statements of Operations
23
Consolidated Balance Sheets
24
Consolidated Statements of Shareholders’ Equity
25
Consolidated Statements of Cash Flows
26
Notes to Consolidated Financial Statements
39
Five-Year Financial Summary
40
Officers, Directors and Shareholder Information
17
2000 Annual Report
20. Management’s Discussion and Analysis of
Financial Condition and Results of Operation
Introduction • The increase in net sales in 1998 was positively affected by
our efforts to improve the performance of the Revco stores,
We strongly recommend that you read our accompanying
which we acquired in 1997. To do this, we converted the
audited consolidated financial statements and footnotes along
retained Revco stores to the CVS store format and relocated
with this important discussion and analysis.
certain stores. Our performance during the conversion period
was positively affected by temporary promotional events.
Results of Operations
• We continued to relocate our existing shopping center stores
Fiscal 2000, which ended on December 30, 2000 and fiscal 1998, to larger, more convenient, freestanding locations. Historically,
which ended on December 26, 1998, each included 52 weeks. we have achieved significant improvements in customer
Fiscal 1999, which ended on January 1, 2000, included 53 weeks. count and net sales when we do this. The resulting increase
in net sales has typically been driven by an increase in front
Net sales increased 11.0% in 2000 to $20.1 billion. This compares store sales, which normally have a higher gross margin. We
to increases of 18.5% in 1999 and 11.1% in 1998. Same store sales, believe that our relocation program offers a significant
consisting of sales from stores that have been open for more opportunity for future growth, as only 39% of our existing
than one year, rose 10.9% in 2000, 12.5% in 1999 and 10.8% in stores are freestanding. We currently expect to have
1998. Pharmacy same store sales increased 17.7% in 2000, 19.4% approximately 44% of our stores in freestanding locations
in 1999 and 16.5% in 1998. Our pharmacy sales as a percentage by the end of 2001. Our long-term goal is to have 80% of our
of total net sales were 63% in 2000, 59% in 1999 and 58% in stores located in freestanding sites. We cannot, however,
1998. Our third party prescription sales as a percentage of total guarantee that future store relocations will deliver the
pharmacy sales were 89% in 2000, 87% in 1999 and 84% in 1998. same results as those historically achieved. Please read
the “Cautionary Statement Concerning Forward-Looking
As you review our sales performance, we believe you should Statements” section below.
consider the following important information:
Gross margin as a percentage of net sales was 26.7% in 2000.
• Our pharmacy sales growth continued to benefit from our This compares to 26.9% in 1999 and 27.0% in 1998. As you
ability to attract and retain managed care customers and review our gross margin performance, please remember to
favorable industry trends. These trends include an aging consider the impact of the following nonrecurring charge:
American population; many “baby boomers” are now in their
fifties and are consuming a greater number of prescription • During 1998, we recorded a $10.0 million charge to cost of
drugs. The increased use of pharmaceuticals as the first line goods sold to reflect markdowns on noncompatible Arbor
of defense for healthcare and the introduction of a number merchandise, which resulted from the CVS/Arbor merger
of successful new prescription drugs also contributed to the transaction. Please read Note 10 to the consolidated financial
growing demand for pharmacy services. statements for other important information about the
CVS/Arbor merger.
• Our front store sales growth was driven by strong performance
in the general merchandise, health and beauty, convenience If you exclude the effect of this nonrecurring charge, our
foods and film and photofinishing categories. comparable gross margin as a percentage of net sales was 26.7%
in 2000, 26.9% in 1999 and 27.1% in 1998.
• The increase in net sales in 2000 was negatively affected by
the 53rd week in 1999. Excluding the impact of the 53rd Why has our comparable gross margin rate been declining?
week in 1999, comparable net sales increased 13.4% in 2000
when compared to 1999. • Pharmacy sales are growing at a faster pace than front store
sales. On average, our gross margin on pharmacy sales is
• The increase in net sales in 1999 was positively affected by lower than our gross margin on front store sales.
the 53rd week in 1999. Excluding the impact of the 53rd
week in 1999, comparable net sales increased 16.0% in 1999
when compared to 1998.
18
CVS Corporation
21. • Sales to customers covered by third party insurance programs What have we done to improve our comparable total operating
have continued to increase and, thus, have become a larger expenses as a percentage of net sales?
part of our total pharmacy business. On average, our gross
• Our strong sales performance has consistently allowed our
margin on third party pharmacy sales is lower than our gross
net sales to grow at a faster pace than total operating
margin on cash pharmacy sales.
expenses.
• Our third party gross margin rates have historically reflected
• Our information technology initiatives have led to greater
varying degrees of pressure due to the efforts of managed
productivity, which has resulted in lower operating costs,
care organizations and other pharmacy benefit managers
particularly at the store level.
to reduce prescription drug costs. To address this trend, we
have dropped and/or renegotiated a number of third party
Operating profit increased $187.2 million in 2000 to $1.3 billion.
programs that fell below our minimum profitability
This compares to $1.1 billion in 1999 and $751.9 million in 1998.
standards. These continuing efforts have resulted in a
If you exclude the effect of the nonrecurring gain we recorded in
stabilization of third party rates. However, in the event this
total operating expenses in 2000 and the nonrecurring charges
trend were to continue and we elect to drop additional
we recorded in gross margin and in total operating expenses in
programs and/or decide not to participate in future
1998, our comparable operating profit increased $168.0 million
programs that fall below our minimum profitability
in 2000 to $1.3 billion (or 14.8%). This compares to $1.1 billion in
standards, we may not be able to sustain our current rate of
1999 and $940.5 million in 1998. Comparable operating profit as
sales growth.
a percentage of net sales was 6.5% in 2000, 6.3% in 1999 and 6.2%
in 1998.
Total operating expenses were 20.1% of net sales in 2000. This
compares to 20.6% of net sales in 1999 and 22.1% in 1998. As
Interest expense, net consisted of the following:
you review our performance in this area, please remember to
consider the impact of the following nonrecurring gain and charge:
Fiscal Year
• During 2000, we recorded a $19.2 million pre-tax ($11.5 In millions 2000 1999 1998
million after-tax) nonrecurring gain in total operating Interest expense $ 84.1 $ 66.1 $ 69.7
expenses, which represented a partial payment of our share Interest income (4.8) (7.0) (8.8)
of the settlement proceeds from a class action lawsuit
Interest expense, net $ 79.3 $ 59.1 $ 60.9
against certain manufacturers of brand name prescription
drugs. The timing and amount of any future payments have
The increase in interest expense in 2000 was primarily due to
yet to be determined.
higher average interest rates and higher average borrowing levels
during the year.
• During 1998, we recorded a $147.3 million pre-tax ($101.3
million after-tax) charge in total operating expenses for
Income tax provision ~ Our effective income tax rate was 40.0%
direct and other merger-related costs pertaining to the
in 2000, 41.0% in 1999 and 44.4% in 1998. The decrease in our
CVS/Arbor merger transaction and related restructuring
effective income tax rate in 2000 and 1999 was primarily due to
activities. In addition, we incurred $31.3 million of
lower state income taxes. Our effective income tax rate was
nonrecurring costs ($18.4 million after-tax) in connection
higher in 1998 because certain components of the nonrecurring
with eliminating Arbor’s information technology systems
charges we recorded in conjunction with the CVS/Arbor merger
and Revco’s noncompatible store merchandise fixtures.
transaction were not deductible for income tax purposes.
Please read Note 10 to the consolidated financial statements
for other important information about the CVS/Arbor merger.
Net earnings increased $110.9 million to $746.0 million (or $1.83
per diluted share) in 2000.This compares to $635.1 million (or $1.55
If you exclude the effect of the nonrecurring gain and charges
per diluted share) in 1999 and $384.5 million (or $0.95 per diluted
we recorded in 2000 and 1998, respectively, comparable total
share) in 1998. If you exclude the effect of the nonrecurring gain we
operating expenses as a percentage of net sales were 20.2% in
recorded in total operating expenses in 2000 and the nonrecurring
2000, 20.6% in 1999 and 20.9% in 1998.
charges we recorded in gross margin and in total operating
expenses in 1998, our comparable net earnings increased $99.4
million to $734.5 million (or $1.80 per diluted share) in 2000.This
compares to $635.1 million (or $1.55 per diluted share) in 1999 and
$510.1 million (or $1.26 per diluted share) in 1998.
19
2000 Annual Report
22. Management’s Discussion and Analysis of
Financial Condition and Results of Operation
Liquidity & Capital Resources Capital Expenditures ~ Our capital expenditures, before the
effect of the sale-leaseback transactions discussed below,
Liquidity ~ We generally finance our working capital and capital
totaled $695.3 million in 2000. This compared to $722.7 million,
expenditure requirements with internally generated funds and
in 1999 and $502.3 million in 1998. During 2000, we opened
our commercial paper program. In addition, we may elect to use
158 new stores, relocated 230 existing stores and closed 123
additional long-term borrowings and/or other financing sources
stores. This includes 34 new ProCare stores and 1 relocation.We
in the future to support our continued growth.
also entered three new major markets in 2000 including
Chicago, Illinois, Tampa and Orlando, Florida. As of December
Our commercial paper program is supported by a $670 million,
30, 2000, we operated 4,133 retail and specialty pharmacy
five-year unsecured revolving credit facility, which expires on
stores in 31 states and the District of Columbia. This compares to
May 30, 2002 and a $995 million unsecured revolving credit
4,098 stores as of January 1, 2000. The Company finances a
facility, which expires on May 25, 2001. We can also obtain short-
portion of its store development program through sale-leaseback
term financing through various uncommitted lines of credit. As
transactions. Proceeds from sale-leaseback transactions totaled
of December 30, 2000, we had $589.6 million of commercial
$299.3 million in 2000 and $229.2 million in 1999.The properties
paper outstanding at a weighted average interest rate of 6.9%.
were sold at net book value and the resulting leases are being
accounted for as operating leases.
Our credit facilities and unsecured senior notes contain customary
restrictive financial and operating covenants. We do not believe
Recent Accounting Pronouncements
that the restrictions contained in these covenants materially
affect our financial or operating flexibility.
Effective fiscal 2001, we adopted Statement of Financial
Accounting Standards No. 133,“Accounting for Derivative
On March 6, 2000, the Board of Directors approved a common
Instruments and Hedging Activities,” as amended by SFAS 138,
stock repurchase program, which allows the Company to
“Accounting for Certain Derivative Instruments and Certain
acquire up to $1 billion of its common stock. During 2000, we
Hedging Activities—an amendment to FASB Statement No. 133.”
repurchased 4.7 million shares of common stock at an aggregate
These statements, which established the accounting and
cost of $163.2 million.
financial reporting requirements for derivative instruments,
require companies to recognize derivatives as either assets or
On September 18, 2000, the Company completed the acquisition
liabilities on the balance sheet and measure those instruments
of certain assets of Stadtlander Pharmacy of Pittsburgh,
at fair value. The adoption of this standard did not have a
Pennsylvania, a subsidiary of Bergen Brunswig Corporation, for
material effect on our consolidated financial statements.
$124 million in cash plus the assumption of certain liabilities. The
results of operations of Stadtlander have been included in the
During the fourth quarter of 2000, we adopted the Staff Accounting
consolidated financial statements since this date.
Bulletin 101,“Revenue Recognition in Financial Statements.”
This bulletin summarizes the application of generally accepted
Capital Resources ~ Although there can be no assurance and
accounting principles to revenue recognition in financial
assuming market interest rates remain favorable, we currently
statements.The adoption of this standard did not have a material
believe that we will continue to have access to capital at attractive
effect on our consolidated financial statements.
interest rates in 2001. We further believe that our cash on hand
and cash provided by operations, together with our ability to
Cautionary Statement Concerning
obtain additional short-term and long-term financing, will be
sufficient to cover our future working capital needs, capital
Forward - Looking Statements
expenditures and debt service requirements for at least the next
12 months. We have made forward-looking statements in this Annual Report
that are subject to risks and uncertainties that could cause actual
Net Cash Provided by Operations ~ Net cash provided by results to differ materially. For these statements, we claim the
operations increased to $780.2 million in 2000.This compares protection of the safe harbor for forward-looking statements
to $726.3 million in 1999 and $292.4 million in 1998. The contained in the Private Securities Litigation Reform Act of 1995.
improvement in net cash provided by operations was primarily We strongly recommend that you become familiar with the specific
the result of higher net earnings. As of December 30, 2000, the risks and uncertainties that we have outlined for you under the
future cash payments associated with various restructuring caption “Cautionary Statement Concerning Forward-Looking
programs totaled $105.2 million, which primarily consists of Statements” in our Annual Report on Form 10-K for the fiscal
continuing lease obligations extending through 2020. year ended December 30, 2000.
20
CVS Corporation
23. Management’s Responsibility for Financial Reporting
The integrity and objectivity of the financial statements and related financial information in this Annual Report are the responsibility
of the management of the Company. The financial statements have been prepared in conformity with accounting principles generally
accepted in the United States of America and include, when necessary, the best estimates and judgments of management.
The Company maintains a system of internal controls designed to provide reasonable assurance, at appropriate cost, that assets are
safeguarded, transactions are executed in accordance with management’s authorization, and the accounting records provide a reliable
basis for the preparation of the financial statements. The system of internal accounting controls is continually reviewed by management
and improved and modified as necessary in response to changing business conditions and the recommendations of the Company’s
internal auditors and independent auditors.
KPMG LLP, independent auditors, were engaged to render an opinion regarding the fair presentation of the consolidated financial
statements of the Company.Their accompanying report is based upon an audit conducted in accordance with auditing standards generally
accepted in the United States of America and included a review of the system of internal controls to the extent they considered necessary
to support their opinion.
The Audit Committee of the Board of Directors, consisting solely of outside directors, meets periodically with management, internal
auditors and the independent auditors to review matters relating to the Company’s financial reporting, the adequacy of internal accounting
controls and the scope and results of audit work.The internal auditors and independent auditors have free access to the Audit Committee.
Thomas M. Ryan David B. Rickard
Chairman of the Board, President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
February 1, 2001
Independent Auditor’s Report
Board of Directors and Shareholders
CVS Corporation:
We have audited the accompanying consolidated balance sheets of CVS Corporation and subsidiaries as of December 30, 2000 and
January 1, 2000, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the fifty-two week
period ended December 30, 2000, the fifty-three week period ended January 1, 2000 and the fifty-two week period ended December
26, 1998. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
CVS Corporation and subsidiaries as of December 30, 2000 and January 1, 2000, and the results of their operations and their cash flows
for the the fifty-two week period ended December 30, 2000, the fifty-three week period ended January 1, 2000 and the fifty-two week
period ended December 26, 1998, in conformity with accounting principles generally accepted in the United States of America.
KPMG LLP
Providence, Rhode Island
February 1, 2001
21
2000 Annual Report