CVS 2002 Annual Report Download - page 5

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We are well positioned for steady, strong growth as we look into 2003 and beyond. We are a
leader in the pharmacy industry, which boasts some of the best growth trends in all of retail.
While drug approvals have been somewhat slower over the past two years, there is a bulging
pipeline of new drugs awaiting approval. In addition, a large number of branded drugs are converting
to generics, which lowers healthcare costs while improving our profitability. Congress continues to
debate how to provide prescription drug coverage for those people covered by Medicare, and more
Americans are entering their senior years, when their prescription drug consumption is higher.
Prescription drugs are recognized as the most cost-effective means of improving healthcare, and
coverage for all Americans is good for our citizens and our business.
Healthy Financial Position
As we enter 2003, our 40th anniversary year, we have a solid balance sheet with robust free cash
flow, low debt levels, and improving inventory turns. We clearly have the wherewithal to take
advantage of the significant growth opportunities that lie ahead. We remain committed to increasing
our return on invested capital to drive shareholder value. In the 2002/2003 fiscal years, we will have
invested more than $1 billion in stores and technology. We expect to open another 250-275 stores
in 2003, and to grow our total square footage by 4% to 5% each year going forward.
As we’ve watched companies struggle this past year with corporate governance issues, I am
gratified by our company’s long-standing history of integrity, which has been one of our key values
for success at CVS. We remain committed to our mission, vision and values that
have made us successful for the past four decades.
All of us at CVS are proud of the dedication and
teamwork of our 105,000 colleagues. We are grateful
for the wise counsel of our board of directors, the
leadership of our talented senior management
team, our strong partnerships with our
suppliers, and the growing loyalty of our
customers. We thank you, our
shareholders, for your continued
confidence. With your support we
look forward to a very bright
future for CVS.
Thomas M. Ryan
Thomas M. Ryan
Chairman of the Board,
President, and
Chief Executive Officer