CVS Health Corporation (NYSE:CVS) Q4 2014 Earnings Conference Call - Final Transcript

Feb 10, 2015 • 08:30 am ET


CVS Health Corporation (NYSE:CVS) Q4 2014 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to CVS Health Fourth Quarter Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, February 10th, 2015.

I would now turn this conference over to Nancy Christal, Senior VP of Investor Relations. Please proceed.

Nancy Christal

Thanks, Gillian. Good morning, everyone, and thanks for joining us. I'm here this morning with Larry Merlo, President and CEO, who will provide a business update and Dave Denton, Executive Vice President and CFO, who will review our fourth quarter results as well as guidance for the first quarter and year. Jon Roberts, President of PBM and Helena Foulkes, President of the Retail Business are also with us today and they'll participate in the question-and-answer session following our prepared remarks. During the Q&A, please limit yourself to no more than one question with a quick follow-up, so we can provide more callers with the chance to ask questions.

Just before this call, we posted a slide presentation on our Web site. The slide summarizes the information you'll hear today as well as some additional facts and figures regarding our operating performance and guidance. Additionally, note that our Form 10-K will be filed later this afternoon and it will be available on our Web site at that time. Please note that during today's presentation, we will make forward-looking statements within the meaning of the federal securities laws. By their nature, all forward-looking statements involve risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements for a number of reasons as described in our SEC filings including the Risk Factors section and cautionary statement disclosures in those filings. During this call, we'll also use some non-GAAP financial measures when talking about our Company's performance, including free cash flow and adjusted EPS. In accordance with SEC regulations, you can find the definitions of these non-GAAP items as well as reconciliations to comparable GAAP measures on the Investor Relations portion of our website. And as always, today's call is being simulcast on our website and it will be archived there following the call for one-year.

And now, I'll turn this over to our CEO, Larry Merlo.

Larry Merlo

Thanks, Nancy. Good morning everyone and thanks for joining us today. This call wraps up 2014 and it was a great year for our company by any measure. We delivered approximately 10% growth in consolidated revenues, 14% growth in PBM operating profit, 8% growth in retail operating profit and 13.5% growth in adjusted earnings per share on a comparable basis.

On a quarterly basis, we have consistently posted solid financial results and the fourth quarter was no exception. Adjusted earnings per share increased 8.4% to a $1.21 per share at the high-end of our guidance range and both the PBM and Retail segments exceeded our revenue expectations. Operating profit in the retail business grew 6.5%, just above the high-end