CVS Caremark Provides Strong Growth Outlook for 2013 and Beyond, Announces 38%Dividend Increase and Outlines Strategic Growth

  CVS Caremark Provides Strong Growth Outlook for 2013 and Beyond, Announces
         38%Dividend Increase and Outlines Strategic Growth Framework

Company uniquely positioned to drive results through its distinctive model,
creating greater value for clients, customers and shareholders

PR Newswire

WOONSOCKET, R.I., Dec. 13, 2012

WOONSOCKET, R.I., Dec. 13, 2012 /PRNewswire/ --

2013 Guidance:

  oAdjusted EPS expected to be in the range of $3.84 to $3.98, up 13% to 17%
  oGAAP diluted EPS from continuing operations expected to be in the range of
    $3.59 to $3.73
  oFree cash flow expected to be between $4.8 billion and $5.1 billion
  oCash from operations expected to be between $6.4 billion and $6.6 billion
  oExpect to complete $4 billion in share repurchases

(Logo: http://photos.prnewswire.com/prnh/20090226/NE75914LOGO)

At its annual Analyst Day in New York City today, CVS Caremark (NYSE:CVS)
outlined its strategic growth framework, which leverages the company's unique
suite of assets to provide unmatched solutions to today's health care
challenges. Company executives provided an in-depth review of CVS Caremark's
strategies to drive long-term growth and enhance shareholder value. The
company also provided 2013 guidance, highlighting a healthy outlook for growth
across the enterprise.

"Going into 2012, we set challenging, yet achievable, financial targets and I
am pleased to report that we outperformed those expectations.Earnings per
share and cash flow are expected to be solidly ahead of our initial plan,"
said Larry J. Merlo, president and chief executive officer of CVS Caremark.
"These strong results set the stage for continued enterprise growth in 2013
and beyond."

Guidance
At the meeting, Dave Denton, executive vice president and chief financial
officer, reaffirmed the company's guidance for 2012 and outlined CVS
Caremark's guidance for 2013. The company expects to deliver adjusted diluted
earnings per share from continuing operations of $3.84 to $3.98 in 2013, an
increase of 13.25% to 17.25%, and GAAP diluted earnings per share from
continuing operations of $3.59 to $3.73 per share. The company also expects
to generate substantial free cash flow of $4.8 billion to $5.1 billion in
2013, and cash from operations of $6.4 billion to $6.6 billion in 2013. This
guidance assumes the completion of $4 billion in share repurchases during
2013. The guidance does not include the anticipated benefit from the company's
recent debt tender and refinancing, which is expected to result in annual EPS
accretion of approximately two cents due to the reduction of interest expense
going forward. Denton also expressed confidence in the company's ability to
achieve the steady state earnings growth targets established in late 2010, for
2011 through 2015.

Dividend Increase
The company also announced that its board of directors has approved an
increase in its quarterly dividend of approximately 38%, to $0.225 per share
on the common stock of the company, payable February 4, 2013, to holders of
record on January 24, 2013. This increase translates into an annual rate of 90
cents per share, up 25 cents per share from the previous annual rate of 65
cents.

"The board's decision to increase the dividend by 38% reflects our strong
performance and outlook as well as our very significant cash generation
capabilities," stated Denton. "In late 2010, we set a dividend payout ratio
target of 25% to 30% by 2015, which implied a compounded dividend growth rate
of approximately 25% per year from 2010. Today's increase allows us to meet
our 25% dividend payout ratio target two years early and marks our tenth
consecutive year of dividend increases. We remain committed to using our free
cash flow to enhance total returns for our shareholders through a combination
of high-return investments, dividend increases and value-enhancing share
repurchases."

Strategic Growth Framework
At the meeting, company executives outlined key challenges and opportunities
emerging in the health care environment, highlighting how CVS Caremark is
uniquely positioned to drive results in the rapidly-changing environment.
Merlo provided a strategic growth framework that is guiding the company's
efforts to address the changing needs of customers and clients while
capitalizing on its unique suite of assets to enhance shareholder value.

"Health care is going through a period of intense change, change that will be
accelerated by the implementation of the Affordable Care Act (ACA) as well as
underlying demographic shifts, advances in technology and changes in consumer
and patient behavior," remarked Merlo.

"The future health care environment will be defined by the more than 30
million newly- insured Americans as a result of ACA; incentives for physicians
to improve outcomes, quality and cost-effectiveness of care; rising prevalence
of chronic disease; and growth in pharmacy that is primarily driven by
innovation in biologic specialty drugs. Additionally, shifts in funding
sources for health care coverage will increase the importance of providing
cost-effective, high-quality, innovative solutions to government programs and
health plans."

"We continue to believe that our goals of providing greater access and
convenience, improving health outcomes and lowering overall costs align very
well with the direction in which health care is headed," said Merlo. "We are
leveraging our enterprise assets to provide solutions that drive long-term
growth and value."

Executives identified the highest priority initiatives that define the
company's strategic growth framework, including advancing new breakthrough
interventions to improve medication adherence; transforming primary care
through the accelerated growth of MinuteClinic and expansion of its breadth of
services; expanding specialty pharmacy services; identifying opportunities to
deliver solutions addressing provider needs to support patient outcomes;
partnering more closely with health plans; and expanding digital capabilities
across the enterprise with the goal of addressing patient information and
product needs in a seamless fashion.

"Our strategic growth framework provides the lens through which we will make
strategic investments and prioritize initiatives," Merlo concluded. "We are
capitalizing on our suite of assets to drive results and enhance value for
clients, customers and shareholders."

Webcast
The company simultaneously broadcast an audio and video webcast of the meeting
for all interested parties through the Investor Relations section of the CVS
Caremark website at http://info.cvscaremark.com/investors. This webcast and
supporting materials will be archived and available on the website for a
one-year period following the meeting.

About CVS Caremark
CVS Caremark is dedicated to helping people on their path to better health as
the largest integrated pharmacy company in the United States. Through the
company's more than 7,400 CVS/pharmacy stores; its leading pharmacy benefit
manager serving more than 60 million plan members; and its retail health
clinic system, the largest in the nation with more than 600 MinuteClinic
locations, it is a market leader in mail order, retail and specialty pharmacy,
retail clinics, and Medicare Part D Prescription Drug Plans.As a pharmacy
innovation company with an unmatched breadth of capabilities, CVS Caremark
continually strives to improve health and lower costs by developing new
approaches such as its unique Pharmacy Advisor program that helps people with
chronic diseases such as diabetes obtain and stay on their medications. Find
more information about how CVS Caremark is reinventing pharmacy for better
health at info.cvscaremark.com.

Forward-Looking Statements
This press release contains certain forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially. For these statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The Company strongly recommends that you become
familiar with the specific risks and uncertainties outlined under the Risk
Factors section in our Annual Report on Form 10-K for the year ended December
31, 2011, and under the section entitled "Cautionary Statement Concerning
Forward-Looking Statements" in our most recently filed Quarterly Report on
Form 10-Q.

Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures, namely Free
Cash Flow and "Adjusted EPS." In accordance with SEC regulations, you can find
the definitions of the Non-GAAP items mentioned, as well as the
reconciliations to comparable GAAP measures, on the Investor Relations section
of our website at http://info.cvscaremark.com/investors.

SOURCE CVS Caremark Corporation

Website: http://www.cvscaremark.com/investors
Contact: Nancy Christal, Investor Relations, +1-914-722-4704; or Eileen Howard
Boone, Corporate Communications, +1-401-770-4561; or Carolyn Castel, Corporate
Communications, +1-401-770-5717, Carolyn.Castel@CVSCaremark.com
 
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