CVS 2014 Annual Report Download - page 38

Management’s Discussion and Analysis
of Financial Condition and Results of Operations
36
CVS Health
Net cash used in investing activities increased by $2.2 billion in 2014 and remained relatively flat from 2012 to
2013. The increase in 2014 was primarily due to the $2.1 billion in cash consideration paid for the acquisition of
Coram in January 2014 and an increase in capital expenditures.
In 2014, gross capital expenditures totaled approximately $2.1 billion, an increase of $152 million compared to the
prior year. During 2014, approximately 42% of our total capital expenditures were for new store construction, 21%
were for store, fulfillment and support facilities expansion and improvements and 37% were for technology and
other corporate initiatives. Gross capital expenditures totaled approximately $2.0 billion during 2013 and 2012.
During 2013, approximately 45% of our total capital expenditures were for new store construction, 25% were for
store, fulfillment and support facilities expansion and improvements and 30% were for technology and other
corporate initiatives.
Proceeds from sale-leaseback transactions totaled $515 million in 2014. This compares to $600 million in 2013
and $529 million in 2012. Under the sale-leaseback transactions, the properties are generally sold at net book value,
which generally approximates fair value, and the resulting leases generally qualify and are accounted for as operat-
ing leases. The specific timing and amount of future sale-leaseback transactions will vary depending on future
market conditions and other factors.
Below is a summary of our store development activity for the respective years:
2014 (2) 2013 (2) 2012 (2)
Total stores (beginning of year)
7,702 7,508 7,388
New and acquired stores (1)
187 213 150
Closed stores (1)
(23) (19) (30)
Total stores (end of year)
7,866 7,702 7,508
Relocated stores
60 78 90
(1) Relocated stores are not included in new or closed store totals.
(2) Includes retail drugstores, onsite pharmacy stores and specialty pharmacy stores.
Net cash used in financing activities increased by $4.5 billion in 2014 and decreased by $3.6 billion in 2013. The
increase in 2014 was primarily due to the repayments of long-term debt and lower borrowings than in 2013. The
decrease in 2013 was primarily due to greater net borrowings than in 2012.
Share repurchase programs — The following share repurchase programs were authorized by the Company’s
Board of Directors:
IN BILLIONS Amount of
Authorization Date Authorization
December 15, 2014 (“2014 Repurchase Program”) $ 10.0
December 17, 2013 (“2013 Repurchase Program”) $ 6.0
September 19, 2012 (“2012 Repurchase Program”) $ 6.0
August 23, 2011 (“2011 Repurchase Program”) $ 4.0
The Repurchase Programs, which were effective immediately, permit the Company to effect share repurchases from
time to time through a combination of open market repurchases, privately negotiated transactions, accelerated
share repurchase (“ASR”) transactions, and/or other derivative transactions. The 2014 and 2013 Repurchase
Programs may be modified or terminated by the Board of Directors at any time. The 2012 and 2011 Repurchase
Programs have been completed, as described on the following page.