CVS 2011 Annual Report Download - page 46

Management’s Discussion and Analysis of Financial Condition
and Results of Operations
CVS CAREMARK 44 2011 ANNUAL REPORT
Cautionary Statement Concerning
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the
“Reform Act”) provides a safe harbor for forward-looking state-
ments 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 (“SEC”) and
in its reports to stockholders. Generally, the inclusion of
the words “believe,” “expect,” “intend,” “estimate,” “proj-
ect,” “anticipate,” “will,” “should” and similar expressions
identify statements that constitute forward-looking state-
ments. 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,
adjusted earnings or adjusted earnings per common share
growth, free cash flow, debt ratings, inventory levels, inven-
tory turn and loss rates, store development, relocations
and new market entries, PBM business and sales trends,
Medicare Part D competitive bidding and enrollment and
new product development, as well as statements express-
ing 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 regard-
ing future events and operating performance, and are appli-
cable 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:
• Risks relating to the health of the economy in general and
in the markets we serve, which could impact consumer
purchasing power, preferences and/or spending patterns,
drug utilization trends, the financial health of our PBM
clients and our ability to secure necessary financing,
suitable store locations and sale-leaseback transactions
on acceptable terms.
• Efforts to reduce reimbursement levels and alter health
care financing practices, including pressure to reduce
reimbursement levels for generic drugs.
• The possibility of PBM client loss and/or the failure to win
new PBM business.
• Risks related to the frequency and rate of the introduction
of generic drugs and brand name prescription products.
• Risks of declining gross margins in the PBM industry attrib-
utable to increased competitive pressures, increased client
demand for lower prices, enhanced service offerings and/
or higher service levels and market dynamics and regulatory
changes that impact our ability to offer plan sponsors pricing
that includes the use of retail “differential” or “spread.”
• Regulatory and business changes relating to our participation
in Medicare Part D.
• Possible changes in industry pricing benchmarks.
• An extremely competitive business environment.
• Reform of the U.S. health care system.
• Risks relating to our failure to properly maintain our infor-
mation technology systems, our information security sys-
tems and our infrastructure to support our business and to
protect the privacy and security of sensitive customer and
business information.
• Risks related to compliance with a broad and complex regula-
tory framework, including compliance with new and existing
federal, state and local laws and regulations relating to health
care, accounting standards, corporate securities, tax, environ-
mental and other laws and regulations affecting our business.
• Risks related to litigation and other legal proceedings as
they relate to our business, the pharmacy services, retail
pharmacy or retail clinic industry or to the health care
industry generally.
• Other risks and uncertainties detailed from time to time in
our filings with the SEC.
The foregoing list is not exhaustive. There can be no assur-
ance that the Company has correctly identified and appro-
priately assessed all factors affecting its business. Additional
risks and uncertainties not presently known to the Company
or that it currently believes to be immaterial also may adversely
impact the Company. Should any risks and uncertainties
develop into actual events, these developments could have a
material adverse effect on the Company’s business, financial
condition and results of operations. For these reasons, you
are cautioned not to place undue reliance on the Company’s
forward-looking statements.
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