CVS 2009 Annual Report Download - page 44

Management’s Discussion and Analysis of
Financial Condition and Results of Operations
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 Corpora-
tion. 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 address-
ing 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 develop-
ment, 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
undertakes 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 business is affected by the economy in general including
changes in consumer purchasing power, preferences and/or
spending patterns. These changes could affect drug utiliza-
tions trends, the number of covered lives and the financial
health of our PBM clients. Further, interest rate fluctuations
and changes in capital market conditions may affect our
ability to obtain necessary financing on acceptable terms,
our ability to secure suitable store locations under accept-
able terms and our ability to execute future sale-leaseback
transactions under acceptable terms;
Collateral Assignment Split-Dollar Life Insurance Agreements”).
The application of this guidance requires a company to
recognize a liability for the discounted value of the future
premium benefits that a company will incur through the death
of the underlying insured and provides guidance for determin-
ing a liability for the postretirement benefit obligation as well
as recognition and measurement of the associated asset on
the basis of the terms of the collateral assignment agreement.
The adoption of the content within ASC 715-60 did not have
a material impact on our consolidated results of operations,
financial position or cash flows.
Recent Accounting Pronouncement Not
Yet Effective
In June 2009, the FASB issued SFAS No. 167 (not yet codified
in ASC), “Amendments to FASB Interpretation No. 46(R),”
(“SFAS 167”). The standard amends the content within ASC 810
Consolidations (formerly FASB Interpretations (“FIN”) No. 46(R))
to require a company to analyze whether its interest in a variable
interest entity (“VIE”) gives it a controlling financial interest.
The determination of whether a company is required to
consolidate another entity is based on, among other things,
the other entity’s purpose and design and a company’s ability
to direct the activities of the other entity that most significantly
impact the other entity’s economic performance. Additional
disclosures are required to identify a company’s involvement
with the VIE and any significant changes in risk exposure due
to such involvement. SFAS 167 is effective for all new and
existing VIEs as of the beginning of the first fiscal year that
begins after November 15, 2009. We do not believe the adoption
of SFAS 167 will have a material impact on our consolidated
results of operations, financial position or cash flows.
CVS Caremark
40