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CVS CAREMARK 2012 ANNUAL REPORT
76
Notes to Consolidated Financial Statements
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 2012 2011
Deferred tax assets:
Lease and rents $ 336 $ 325
Inventories
141 77
Employee benefits
202 253
Allowance for doubtful accounts 137 112
Retirement benefits
115 114
Net operating losses 5 6
Other
400 315
Total deferred tax assets 1,336 1,202
Deferred tax liabilities:
Depreciation and amortization (4,457) (4,552)
Net deferred tax liabilities $ (3,121) $ (3,350)
Net deferred tax assets (liabilities) are presented on the consolidated balance sheets as follows as of December 31:
In millions
2012 2011
Deferred tax assets – current $ 663 $ 503
Deferred tax liabilities – noncurrent (3,784) (3,853)
Net deferred tax liabilities $ (3,121) $ (3,350)
The Company believes it is more likely than not the deferred tax assets will be realized during future periods.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
In millions
2012 2011 2010
Beginning balance $ 38 $ 35 $ 61
Additions based on tax positions related to the current year 15 3 1
Additions based on tax positions related to prior years 42 13 2
Reductions for tax positions of prior years (2) — (10)
Expiration of statutes of limitation (12) (7) (16)
Settlements (1) (6) (3)
Ending balance $ 80 $ 38 $ 35
The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of numerous state and
local jurisdictions. Substantially all material income tax matters have been concluded for fiscal years through 2007. The
Company and its subsidiaries anticipate that a number of income tax examinations will conclude and statutes of limitation
for open years will expire over the next twelve months, which may cause a utilization or reduction of the Company’s reserve
for uncertain tax positions of up to approximately $6 million.