CVS 2009 Annual Report Download - page 76

Five-Year Financial Summary
In millions, except per share amounts 2009 2008 (1) 2007 (2) 2006 2005
Statement of operations data:
Net revenues $ 98,729 $ 87,472 $ 76,330 $ 43,821 $ 37,007
Gross profit 20,380 18,290 16,108 11,742 9,695
Operating expenses (3) 13,942 12,244 11,314 9,300 7,675
Operating profit (4) 6,438 6,046 4,794 2,442 2,020
Interest expense, net 525 509 435 216 111
Income tax provision (5) 2,205 2,193 1,722 857 684
Income from continuing operations 3,708 3,344 2,637 1,369 1,225
Loss from discontinued operations, net of tax benefit (6) (12) (132) – – –
Net income $ 3,696 $ 3,212 $ 2,637 $ 1,369 $ 1,225
Per common share data:
Basic earnings per common share:
Income from continuing operations $ 2.59 $ 2.32 $ 1.97 $ 1.65 $ 1.49
Loss from discontinued operations (0.01) (0.09) – – –
Net income $ 2.58 $ 2.23 $ 1.97 $ 1.65 $ 1.49
Diluted earnings per common share:
Income from continuing operations $ 2.56 $ 2.27 $ 1.92 $ 1.60 $ 1.45
Loss from discontinued operations (0.01) (0.09) – – –
Net income $ 2.55 $ 2.18 $ 1.92 $ 1.60 $ 1.45
Cash dividends per common share $ 0.30500 $ 0.25800 $ 0.22875 $ 0.15500 $ 0.14500
Balance sheet and other data:
Total assets $ 61,641 $ 60,960 $ 54,722 $ 20,574 $ 15,247
Long-term debt $ 8,756 $ 8,057 $ 8,350 $ 2,870 $ 1,594
Total shareholders’ equity $ 35,768 $ 34,574 $ 31,322 $ 9,918 $ 8,331
Number of stores (at end of year) 7,074 6,981 6,301 6,205 5,474
(1) On December 23, 2008, our Board of Directors approved a change in our fiscal year-end from the Saturday nearest December 31 of each year to
December 31 of each year to better reflect our position in the health care, rather than the retail, industry. The fiscal year change is effective beginning
with the fourth quarter of fiscal 2008. As you review our operating performance, please consider that fiscal 2008 includes 368 days, compared to each
of the remaining fiscal years presented, which include 364 days.
(2) Effective March 22, 2007, pursuant to the Agreement and Plan of Merger dated as of November 1, 2006, as amended (the “Merger Agreement”),
Caremark Rx, Inc. was merged with a newly formed subsidiary of CVS Corporation, with Caremark Rx, L.L.C., continuing as the surviving entity (the
“Caremark Merger”). Following the Caremark Merger, the name of the Company was changed to “CVS Caremark Corporation.” By virtue of the Caremark
Merger, each issued and outstanding share of Caremark common stock, par value $0.001 per share, was converted into the right to receive 1.67 shares
of CVS Caremark’s common stock, par value $0.01 per share. Cash was paid in lieu of fractional shares.
(3) In 2006, the Company adopted the Securities and Exchange Commission (SEC) Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects
of Prior Year Misstatements when Qualifying Misstatements in Current Year Financial Statements.” The adoption of this statement resulted in a
$40 million pre-tax ($25 million after-tax) decrease in operating expenses for 2006.
(4) Operating profit includes the pre-tax effect of the charge discussed in Note (3) above.
(5) Income tax provision includes the effect of the following: (i) in 2009, the recognition of $167 million of previously unrecognized tax benefits, including
interest, relating to the expiration of various statutes of limitation and settlements with tax authorities, (ii) in 2006, a $11 million reversal of previously
recorded tax reserves through the tax provision principally based on resolving certain state tax matters, and (iii) in 2005, a $53 million reversal of
previously recorded tax reserves through the tax provision principally based on resolving certain state tax matters.
(6) In connection with certain business dispositions completed between 1991 and 1997, the Company continues to guarantee store lease obligations for
a number of former subsidiaries, including Linens ‘n Things. On May 2, 2008, Linens Holding Co. and certain affiliates, which operate Linens ‘n Things,
filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
Pursuant to the court order entered on October 16, 2008, Linens Holding Co. is in the process of liquidating the entire Linens ‘n Things retail chain. The
loss from discontinued operations includes $12 million of lease-related costs ($19 million, net of an $7 million income tax benefit), and $132 million
($214 million, net of an $82 million income tax benefit) for 2009 and 2008 respectively, which the Company believes it will likely be required to satisfy
pursuant to its Linens ‘n Things lease guarantees.
CVS Caremark
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