CVS 1998 Annual Report Download - page 41

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1998 Financial Report
In millions, except per share amounts 1998 1997 1996 1995 1994
Results of operations:(3)
Net sales $15,273.6 $13,749.6 $11,831.6 $10,513.1 $9,469.1
Operating profit 772.2 261.4 591.9 271.7 416.8
Comparable operating profit(1) 940.5 779.1 604.7 486.8 416.8
Earnings from continuing operations
before extraordinary item 396.4 76.5 372.4 83.4 185.9
Comparable earnings from continuing operations
before extraordinary item(2) 510.1 419.2 306.8 210.2 185.9
Net earnings (loss) 396.4 76.9 208.2 (547.1) 400.2
Per common share:
Earnings from continuing operations
before extraordinary item:
Basic $ 0.99 $ 0.17 $ 0.98 $ 0.18 $ 0.47
Diluted 0.98 0.16 0.95 0.18 0.47
Comparable earnings from continuing operations
before extraordinary item:(2)
Basic 1.28 1.08 0.80 0.53 0.47
Diluted 1.26 1.05 0.78 0.53 0.47
Weighted average number of common shares
outstanding used to calculate comparable
diluted earnings per common share 405.2 396.0 383.6 364.8 361.6
Cash dividends 0.225 0.220 0.220 0.760 0.760
Financial position and other data:
Total assets $ 6,763.2 $ 5,978.9 $ 6,014.9 $ 6,614.4 $7,202.9
Total long-term debt 275.7 290.4 1,204.8 1,056.3 1,012.3
Shareholders’ equity 3,110.6 2,614.6 2,413.8 2,567.4 3,341.4
Depreciation and amortization 249.7 238.2 205.4 186.4 169.5
Number of stores at year-end 4,122 4,094 4,204 3,715 3,617
Percentage of net sales:
Operating profit 5.1% 1.9% 5.0% 2.6% 4.4%
Comparable operating profit(1) 6.2% 5.7% 5.1% 4.6% 4.4%
Earnings from continuing operations
before extraordinary item 2.6% 0.6% 3.1% 0.8% 2.0%
Comparable earnings from continuing operations
before extraordinary item(2) 3.3% 3.0% 2.6% 2.0% 2.0%
Net earnings (loss) 2.6% 0.6% 1.8% (5.2%) 4.2%
(1) Comparable operating profit excludes the pre-tax effect of the following nonrecurring charges: (i) in 1998, $158.3 million ($107.8 million after-tax)
related to the merger of CVS and Arbor and $10.0 million ($5.9 million after-tax) related to the markdown of noncompatible Arbor merchandise,
(ii) in 1997, $411.7 million ($273.7 million after-tax) related to the merger of CVS and Revco, $75.0 million ($49.9 million after-tax) related to the
markdown of noncompatible Revco merchandise and $31.0 million ($19.1 million after-tax) related to the restructuring of Big B, Inc., (iii) in 1996,
$12.8 million ($6.5 million after-tax) related to the write-off of costs incurred in connection with the failed merger of Rite Aid Corporation and Revco
and (iv) in 1995, $165.5 million ($97.7 million after-tax) related to the Company’s strategic restructuring program and the early adoption of SFAS
No. 121 and $49.5 million ($29.1 million after-tax) related to the Company changing its policy from capitalizing internally developed software costs to
expensing the costs as incurred, outsourcing certain technology functions and retaining certain employees until their respective job functions were
transitioned.
(2) Comparable earnings from continuing operations before extraordinary item and comparable earnings per common share from continuing operations
before extraordinary item exclude the after-tax effect of the charges discussed in Note (1) above and a $121.4 million ($72.1 million after-tax) gain on
sale of securities.
(3) Prior to the Mergers, Arbor’s fiscal year ended on July 31 and Revco’s fiscal year ended on the Saturday closest to May 31. In recording the business
combinations, Arbor’s and Revco’s historical stand-alone consolidated financial statements have been restated to a December 31 year-end, to conform
with CVS’ fiscal year-end. As permitted by the rules and regulations of the Securities and Exchange Commission, Arbor’s fiscal year ended July 31, 1995
and Revco’s fiscal year ended June 3, 1995 have been combined with CVS’ fiscal year ended December 31, 1994.
Five-Year Financial Summary