CVS 2010 Annual Report Download - page 25

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Overview of Our Retail Pharmacy Segment
Our Retail Pharmacy segment sells prescription drugs and a wide assortment of general merchandise, including over-the-counter
drugs, beauty products and cosmetics, photo finishing, seasonal merchandise, greeting cards and convenience foods through
our CVS/pharmacy and Longs Drugs® retail stores and online through CVS.com. Our Retail Pharmacy segment derives the majority
of its revenues through the sale of prescription drugs, which are dispensed by our more than 20,000 retail pharmacists. The role
of our retail pharmacists is shifting from primarily dispensing prescriptions to also providing services, including flu vaccinations as
well as face-to-face patient counseling with respect to adherence to drug therapies, closing gaps in care, and more cost-effective
drug therapies. Our integrated pharmacy services model enables us to enhance access to care while helping to lower overall
health care costs and improve health outcomes.
CVS/pharmacy is one of the nation’s largest retail pharmacy chains. With more than 40 years of dynamic growth in the retail
pharmacy industry, the Retail Pharmacy segment generates more than two-thirds of its revenue from prescription sales and is
committed to providing superior customer service by being the easiest pharmacy retailer for customers to use.
Our Retail Pharmacy segment also provides health care services through our MinuteClinic health care clinics. MinuteClinics are
staffed by nurse practitioners and physician assistants who utilize nationally recognized protocols to diagnose and treat minor
health conditions, perform health screenings, monitor chronic conditions, and deliver vaccinations. We believe our clinics
provide quality services that are quick, affordable and convenient.
Our proprietary loyalty card program, ExtraCare®, has well over 67 million active cardholders, making it one of the largest and
most successful retail loyalty card programs in the country.
Effective October 20, 2008, we acquired Longs Drug Stores Corporation, which included 529 retail drug stores (the “Longs Drug
Stores”), RxAmerica, LLC (“RxAmerica”), which provides pharmacy benefit management services and, Medicare Part D benefits,
and other related assets (the “Longs Acquisition”).
As of December 31, 2010, our Retail Pharmacy segment included 7,182 retail drugstores (of which 7,123 operated a pharmacy)
located in 41 states, the District of Columbia, and Puerto Rico operating primarily under the CVS/pharmacy or Longs Drugs
names, our online retail website, CVS.com and 560 retail health care clinics operating under the MinuteClinic name (of which
550 were located in CVS/pharmacy stores).
Overview of Our Corporate Segment
The Corporate segment provides management and administrative services to support the Company. The Corporate segment
consists of certain aspects of our executive management, corporate relations, legal, compliance, human resources, corporate
information technology and finance departments.
Results of Operations
Fiscal Year Change – On December 23, 2008, the Board of Directors of the Company approved a change in the Company’s
fiscal year end from the Saturday nearest December 31 of each year to December 31 of each year to better reflect the Com-
pany’s position in the health care, rather than the retail, industry. The fiscal year change was effective beginning with the fourth
quarter of 2008.
As you review our operating performance, please consider the impact of the fiscal year change as set forth below:
Fiscal Year Fiscal Year-End Fiscal Period Fiscal Period Includes
2010 December 31, 2010 January 1, 2010 - December 31, 2010 365 days
2009 December 31, 2009 January 1, 2009 - December 31, 2009 365 days
2008 December 31, 2008 December 30, 2007 - December 31, 2008 368 days
Unless otherwise noted, all references to years relate to the above fiscal years.
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