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CVS CAREMARK 2012 ANNUAL REPORT
75
As of December 31, 2012, unrecognized compensation expense related to unvested options totaled $161 million, which
the Company expects to be recognized over a weighted-average period of 2.18 years. After considering anticipated
forfeitures, the Company expects approximately 21 million of the unvested options to vest over the requisite service period.
The following table is a summary of the Company’s stock option activity for the year ended December 31, 2012:
Weighted Average
Weighted Average Remaining Aggregate Intrinsic
Shares in thousands Shares Exercise Price Contractual Term Value
Outstanding at December 31, 2011 59,107 $ 33.40 4.11 $ 439,671,000
Granted 8,759 $ 45.02 — —
Exercised (24,978) $ 32.29 — —
Forfeited (1,511) $ 35.80 — —
Expired (448) $ 25.29 — —
Outstanding at December 31, 2012 40,929 $ 36.57 4.34 $ 482,249,000
Exercisable at December 31, 2012 18,875 $ 34.23 2.99 $ 266,505,000
12 Income Taxes
The income tax provision for continuing operations consisted of the following for the respective years:
In millions 2012 2011 2010
Current:
Federal $ 2,226 $ 1,807 $ 1,884
State 410 338 344
2,636 2,145 2,228
Deferred:
Federal (177) 101 (44)
State (18) 12 (5)
(195) 113 (49)
Total $ 2,441 $ 2,258 $ 2,179
The following table is a reconciliation of the statutory income tax rate to the Company’s effective income tax rate for
continuing operations for the respective years:
2012 2011 2010
Statutory income tax rate 35.0 %฀ 35.0฀%฀ 35.0฀%
State income taxes, net of federal tax benefit 3.9 3.9 4.1
Other (0.3) 0.4 (0.2)
Effective income tax rate 38.6 %฀ 39.3฀%฀ 38.9฀%
12