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CVS CAREMARK 69 2011 ANNUAL REPORT
12 INCOME TAXES
The income tax provision for continuing operations consisted of the following for the respective years:
in millions 2011 2010 2009
Current:
Federal $ 1,807 $ 1,884 $ 1,761
State 338 344 397
2,145 2,228 2,158
Deferred:
Federal 101 (44) 38
State 12 (5) 4
113 (49) 42
Total $ 2,258 $ 2,179 $ 2,200
The following table is a reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continu-
ing operations for the respective years:
2011 2010 2009
Statutory income tax rate 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit 3.9 4.1 4.5
Other 0.4 0.6 0.6
Subtotal 39.3 39.7 40.1
Recognition of previously unrecognized tax benefits — (0.8) (2.8)
Effective income tax rate 39.3% 38.9% 37.3%
The following table is a summary of the significant components of the Company’s deferred tax assets and liabilities as of
December 31:
in millions 2011 2010
Deferred tax assets:
Lease and rents $ 325 $ 325
Inventories 77 69
Employee benefits 253 261
Allowance for doubtful accounts 112 96
Retirement benefits 114 99
Net operating losses 6 6
Other 315 307
Total deferred tax assets 1,202 1,163
Deferred tax liabilities:
Depreciation and amortization (4,552) (4,307)
Net deferred tax liabilities $ (3,350) $ (3,144)
Net deferred tax assets (liabilities) are presented on the consolidated balance sheets as follows as of December 31:
in millions 2011 2010
Deferred tax assets – current $ 503 $ 511
Deferred tax liabilities – noncurrent (3,853) (3,655)
Net deferred tax liabilities $ (3,350) $ (3,144)
The Company believes it is more likely than not the deferred tax assets will be realized during future periods.
127087_Financial.indd 69 3/9/12 9:42 PM