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32 CVS Corporation
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Shares Dollars
Dec. 30, Dec. 31, Jan. 1, Dec. 30, Dec. 31, Jan. 1,
In millions 2006 2005 2005 2006 2005 2005
Preference stock:
Beginning of year 4.2 4.3 4.5 $ 222.6 $ 228.4 $ 242.7
Conversion to common stock (0.2) (0.1) (0.2) (9.3) (5.8) (14.3)
End of year 4.0 4.2 4.3 213.3 222.6 228.4
Common stock:
Beginning of year 838.8 828.6 820.4 8.4 8.3 8.2
Stock options exercised and awards 8.5 10.2 8.2 0.1 0.1 0.1
End of year 847.3 838.8 828.6 8.5 8.4 8.3
Treasury stock:
Beginning of year (24.5) (26.6) (29.6) (356.5) (385.9) (428.6)
Purchase of treasury shares 0.1 – – (0.1) (1.7) (0.8)
Conversion of preference stock 0.8 0.5 1.2 11.7 7.3 17.9
Employee stock purchase plan issuance 2.1 1.6 1.8 30.4 23.8 25.6
End of year (21.5) (24.5) (26.6) (314.5) (356.5) (385.9)
Guaranteed ESOP obligation:
Beginning of year (114.0) (140.9) (163.2)
Reduction of guaranteed ESOP obligation 31.9 26.9 22.3
End of year (82.1) (114.0) (140.9)
Capital surplus:
Beginning of year 1,922.4 1,687.3 1,553.1
Conversion of preference stock (2.4) (1.5) (3.6)
Stock option activity and awards 235.8 188.8 119.4
Tax benefit on stock options and awards 42.6 47.8 18.4
End of year 2,198.4 1,922.4 1,687.3
Accumulated other comprehensive loss:
Beginning of year (90.3) (55.5) (36.9)
Recognition of unrealized (loss)/gain
on derivatives (0.3) 2.9 (19.8)
Minimum pension liability adjustment 23.6 (37.7) 1.2
Pension liability adjustment to initially
apply SFAS No.158, net of tax benefit (5.6) – –
End of year (72.6) (90.3) (55.5)
Retained earnings:
Beginning of year 6,738.6 5,645.5 4,846.5
Net earnings 1,368.9 1,224.7 918.8
Preference stock dividends (15.6) (16.2) (16.6)
Tax benefit on preference stock dividends 1.7 2.1 2.4
Common stock dividends (127.0) (117.5) (105.6)
End of year 7,966.6 6,738.6 5,645.5
Total shareholders’ equity $ 9,917.6 $ 8,331.2 $ 6,987.2
Comprehensive income:
Net earnings $ 1,368.9 $ 1,224.7 $ 918.8
Recognition of unrealized (loss)/gain
on derivatives (0.3) 2.9 (19.8)
Minimum pension liability, net of income tax 23.6 (37.7) 1.2
Comprehensive income $ 1,392.2 $ 1,189.9 $ 900.2
See accompanying notes to consolidated financial statements.