CVS 2015 Annual Report Download - page 50

Management’s Discussion and Analysis
of Financial Condition and Results of Operations
48 CVS Health
Proposed Lease Accounting Standard Update
In May 2013, the Financial Accounting Standards Board issued a revised proposed accounting standard update
on lease accounting that will require entities to recognize assets and liabilities arising from lease contracts on the
balance sheet. The proposed accounting standard update states that lessees and lessors should apply a “right-of-
use model” in accounting for all leases. Under the proposed model, lessees would recognize an asset for the right to
use the leased asset, and a liability for the obligation to make rental payments over the lease term. The Company
cannot presently determine the potential impact the proposed standard would have on its results of operations.
While the Company believes that the proposed standard, as currently drafted, will likely have a material impact on its
financial position, it will not have a material impact on its liquidity; however, until the proposed standard is finalized,
such evaluation cannot be completed.
See Note 1, “Significant Accounting Policies” to the consolidated financial statements for a description of New
Accounting Pronouncements applicable to the Company.
Cautionary Statement Concerning Forward-Looking Statements
This annual report contains forward-looking statements within the meaning of the federal securities laws. In addition,
the Company and its representatives may, from time to time, make written or verbal forward-looking statements,
including statements contained in the Company’s filings with the U.S. Securities and Exchange Commission (“SEC”)
and in its reports to stockholders, press releases, webcasts, conference calls, meetings and other communications.
Generally, the inclusion of the words “believe,” “expect,” “intend,” “estimate,” “project,” “anticipate,” “will,” “should”
and similar expressions identify statements that constitute forward-looking statements. All statements addressing
operating performance of CVS Health Corporation or any subsidiary, events or developments that the Company
expects or anticipates will occur in the future, including statements relating to corporate strategy; revenue growth;
earnings or earnings per common share growth; adjusted earnings or adjusted earnings per common share growth;
free cash flow; debt ratings; inventory levels; inventory turn and loss rates; store development; relocations and new
market entries; retail pharmacy business, sales trends and operations; PBM business, sales trends and operations;
LTC pharmacy business, sales trends and operations; the Company’s ability to attract or retain customers and
clients; Medicare Part D competitive bidding, enrollment and operations; new product development; and the impact
of industry developments, as well as statements expressing optimism or pessimism about future operating results
or events, are forward-looking statements within the meaning of the federal securities laws.
The forward-looking statements are and will be based upon management’s then-current views and assumptions
regarding future events and operating performance, and are applicable only as of the dates of such statements. The
Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
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 those set forth in the Risk Factors section within the 2015 Annual Report on Form 10-K, and
including, but not limited to:
• Risks relating to the health of the economy in general and in the markets we serve, which could impact consumer
purchasing power, preferences and/or spending patterns, drug utilization trends, the financial health of our PBM
and LTC clients or other payors doing business with the Company and our ability to secure necessary financing,
suitable store locations and sale-leaseback transactions on acceptable terms.
• Efforts to reduce reimbursement levels and alter health care financing practices, including pressure to reduce
reimbursement levels for generic drugs.