CVS 2004 Annual Report Download - page 48
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Please find page 48 of the 2004 CVS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.46 | Notes to Consolidated Financial Statements
Five-Year Financial Summary
2004 2003 2002 2001 2000
In millions, except per share amounts (52 WEEKS)(53 WEEKS)(52 WEEKS)(52 WEEKS)(52 WEEKS)
STATEMENT OF OPERATIONS DATA:
Net sales $ 30,594.3 $ 26,588.0 $ 24,181.5 $ 22,241.4 $ 20,087.5
Gross margin(1) 8,031.2 6,863.0 6,068.8 5,691.0 5,361.7
Selling, general and administrative expenses(2) 6,079.7 5,097.7 4,552.3 4,256.3 3,761.6
Depreciation and amortization(2)(3) 496.8 341.7 310.3 320.8 296.6
Merger, restructuring and other
non-recurring charges and (gains) — — — 343.3 (19.2)
Total operating expenses 6,576.5 5,439.4 4,862.6 4,920.4 4,039.0
Operating profit(4) 1,454.7 1,423.6 1,206.2 770.6 1,322.7
Interest expense, net 58.3 48.1 50.4 61.0 79.3
Income tax provision(5) 477.6 528.2 439.2 296.4 497.4
Net earnings(6) $ 918.8 $ 847.3 $ 716.6 $ 413.2 $ 746.0
PER COMMON SHARE DATA:
Net earnings:(6)
Basic $ 2.27 $ 2.11 $ 1.79 $ 1.02 $ 1.87
Diluted 2.20 2.06 1.75 1.00 1.83
Cash dividends per common share 0.265 0.230 0.230 0.230 0.230
BALANCE SHEET AND OTHER DATA:
Total assets $ 14,546.8 $ 10,543.1 $ 9,645.3 $ 8,636.3 $ 7,949.5
Long-term debt 1,925.9 753.1 1,076.3 810.4 536.8
Total shareholders’ equity 6,987.2 6,021.8 5,197.0 4,566.9 4,304.6
Number of stores (at end of period) 5,375 4,179 4,087 4,191 4,133
(1) Gross margin includes the pre-tax effect of a $5.7 million ($3.6 million after-tax) non-recurring charge in 2001 related to the markdown of certain
inventory contained in stores closed as part of a strategic restructuring program.
(2) In 2004, the Company conformed its accounting for operating leases and leasehold improvements to the views expressed by the Office of the Chief
Accountant of the Securities and Exchange Commission to the American Institute of Certified Public Accountants on February 7, 2005. As a result, the
Company recorded a non-cash pre-tax adjustment of $9.0 million ($5.4 million after-tax) to selling, general and administrative expenses and $56.9 million
($35.1 after tax) to depreciation and amortization, which represents the cumulative effect of the adjustment for a period of approximately 20 years. Since
the effect of this non-cash adjustment was not material to any previously reported fiscal year, the cumulative effect was recorded in the fourth quarter
of 2004.
(3) As a result of adopting SFAS No. 142, “Goodwill and Other Intangible Assets” at the beginning of 2002, the Company no longer amortizes goodwill
and other indefinite-lived intangible assets. Goodwill amortization totaled $31.4 million pre-tax ($28.2 million after-tax) in 2001 and $33.7 million pre-tax
($31.9 million after-tax) in 2000.
(4) Operating profit includes the pre-tax effect of the charges discussed in Note (1) above and the following merger, restructuring and other non-
recurring charges and gains: (i) in 2004, $65.9 million ($40.5 million after-tax) relating to conforming the Company’s accounting for operating leases and
leasehold improvements, (ii) in 2001, $346.8 million ($226.9 million after-tax) related to restructuring and asset impairment costs associated with the
strategic restructuring and the $3.5 million ($2.1 million after-tax) net non-recurring gain resulting from the net effect of the $50.3 million of settlement
proceeds received from various lawsuits against certain manufacturers of brand name prescription drugs and the Company’s contribution of $46.8
million of these settlement proceeds to the CVS/pharmacy Charitable Trust, Inc. to fund future charitable giving, and (iii) in 2000, $19.2 million ($11.5
million after-tax) non-recurring gain representing partial payment of the Company’s share of the settlement proceeds from a class action lawsuit against
certain manufacturers of brand-name prescription drugs.
(5) In 2004, the Company’s assessment of tax reserves resulted in a reduction that was principally based on finalizing certain tax return years and on a
recent court decision relevant to the industry. As a result, the Company reversed $60.0 million of previously recorded tax reserves through the income
tax provision.
(6) Net earnings and net earnings per common share include the after-tax effect of the charges and gains discussed in Notes (1), (2), (3), (4) and (5) above.