CVS 2007 Annual Report Download - page 39

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35 I 2007 Annual Report
will incur through the death of the underlying insureds. EITF 06-4
is currently effective for fiscal years beginning after December 15,
2007. We are currently evaluating the potential impact the
adoption of EITF 06-4 may have on our consolidated results of
operations, financial position and cash flows.
In March 2007, the FASB issued Emerging Issues Task Force Issue
No. 06–10 “Accounting for Collateral Assignment Split-Dollar
Life Insurance Agreements” (“EITF 06-10”). EITF 06-10 provides
guidance for determining a liability for the postretirement benefit
obligation as well as recognition and measurement of the associ-
ated asset on the basis of the terms of the collateral assignment
agreement. EITF 06-10 is effective for fiscal years beginning after
December 15, 2007. We are currently evaluating the potential
impact the adoption of EITF 06-10 may have on our consolidated
results of operations, financial position and cash flows.
In December 2007, the FASB issued SFAS No. 141 (revised 2007),
“Business Combinations” (“SFAS 141R”), which replaces FASB
Statement No. 141. SFAS 141R establishes the principles and
requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities
assumed, any non controlling interest in the acquiree and the
goodwill acquired. The Statement also establishes disclosure
requirements which will enable users to evaluate the nature and
financial effects of business combinations. SFAS 141R is effective
for fiscal years beginning after December 15, 2008. As of
December 29, 2007, the Company has $176.6 million of unrecog-
nized tax benefits (after considering the federal benefit of state
taxes) related to business combinations that be would treated
as an adjustment to the purchase price allocation if they were
recognized under SFAS No. 141. Upon adopting SFAS 141R,
the remaining balance, if any, of these unrecognized tax benefits
would affect the Company’s effective income tax rate if they
were recognized. The Company is currently evaluating the other
potential impacts, if any, the adoption of SFAS 141R may have
on its consolidated results of operations, financial position and
cash flows.
Cautionary Statement Concerning
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the
“Reform Act”) provides a safe harbor for forward-looking
statements made by or on behalf of CVS Caremark Corporation.
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 Securities
and Exchange Commission and in its reports to stockholders.
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 Caremark Corporation or any subsidiary,
events or developments that the Company expects or anticipates
will occur in the future, including statements relating to revenue
growth, earnings or earnings per common share growth, free
cash flow, debt ratings, inventory levels, inventory turn and loss
rates, store development, relocations and new market entries,
as well as statements expressing optimism or pessimism about
future operating results or events, are forward-looking statements
within the meaning of the Reform Act.
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 under-
takes 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, including but not limited to:
• Our ability to realize the incremental revenues, synergies and
other benefits from the Caremark Merger as expected, and to
successfully integrate the Caremark businesses in accordance
with the expected timing;