Message from our Chairman and our Chief Executive Officer

Dear Fellow Stockholders:

2016 was another successful year for CVS Health as we continued to benefit from our focus on delivering affordable, accessible and effective health care. Our unmatched suite of leading integrated assets continues to create superior value for patients, payors and providers.

While we delivered significant growth in Adjusted Earnings Per Share, this past year was also impacted by some headwinds that weighed on our stock’s performance. Thanks in part to the rhetoric surrounding last year’s presidential election, our stock, as well as that of others in our space, was affected by the public discussion regarding the rising costs of prescription drugs, and the possible repeal and replacement of the Affordable Care Act. Additionally, the loss of retail pharmacy prescriptions associated with a few pharmacy network changes announced in late 2016 is expected to challenge our retail pharmacy business and make this year a rebuilding year.

However, we have implemented plans that are expected to return us to more robust levels of earnings growth in the years ahead. We remain well-positioned to be successful and achieve long-term growth because of our ability to pivot as health care changes and deliver needed solutions that will enhance patient access, improve health outcomes and lower overall health care costs. When you consider the breadth of our assets, all of which are focused on making health care more accessible, affordable and effective, our competitive advantage is clear.

We continue to remain focused on our three pillars that maximize stockholder value. First, we drive productive, longterm growth as evidenced by our solid increases in revenues, operating profit and earnings per share. Second, we generate substantial levels of free cash flow, providing a solid platform to drive future growth. Third, we maintain a disciplined approach to optimizing capital allocation, investing our free cash opportunistically in value-enhancing projects while returning more than $6 billion to stockholders through dividends and share repurchases this past year alone. In addition, we have embarked on an enterprise streamlining initiative that will enable us to create significant savings that can be used to further maximize stockholder value.

CVS Health works every day to provide people with high quality pharmacy and basic health care services, and to make these services accessible and affordable. We align our purpose of helping people on their path to better health with our corporate social responsibility roadmap, Prescription for a Better World. We have taken the roadmap a step further by making our business operations, workplace, supply chain and communities more sustainable. Some of the highlights of our progress can be found inside the back cover of the proxy statement.

This past year we continued to engage proactively with our stockholders to ensure that we understand your needs. We pride ourselves on strong corporate governance practices and we believe that accountability to our stockholders is a mark of good governance. Within the proxy statement, you will find the details of the changes we have made as a result of conversations with many of you. We certainly welcome your feedback on the changes we have made.

Our 2017 Annual Meeting of Stockholders will be held on Wednesday, May 10, 2017, at 9:00 a.m., at the CVS Health Customer Support Center located at One CVS Drive in Woonsocket, Rhode Island. We invite you to attend, and ask you to please vote at your earliest convenience, whether or not you plan to attend. Your vote is important.

We remain confident that our leadership across the pharmacy spectrum will allow us to continue to drive superior value for our health care partners and our shareholders. Thank you for investing in CVS Health.


David W. Dorman
Chairman of the Board

Larry J. Merlo
President and Chief Executive Officer