CVS Health (CVS) 10-K 26 Feb 10 2009 FY Annual report Financial data

Statement Of Income

Statement Of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 29, 2007
Net revenues	$98,729	$87,472	$76,330
Cost of revenues	78,349	69,182	60,222
Gross profit	20,380	18,290	16,108
Operating expenses	13,942	12,244	11,314
Operating profit	6,438	6,046	4,794
Interest expense, net	525	509	435
Income before income tax provision	5,913	5,537	4,359
Income tax provision	2,205	2,193	1,722
Income from continuing operations	3,708	3,344	2,637
Loss from discontinued operations, net of income tax benefit	(12)	(132)	0
Net income	3,696	3,212	2,637
Preference dividends, net of income tax benefit	0	14	14
Net income available to common shareholders	$3,696	$3,198	$2,623
Basic earnings per common share:
Income from continuing operations	2.59	2.32	1.97
Loss from discontinued operations	-0.01	-0.09	$0
Net income	2.58	2.23	1.97
Weighted average common shares outstanding	1,434	1,434	1,328
Diluted earnings per common share:
Income from continuing operations	2.56	2.27	1.92
Loss from discontinued operations	-0.01	-0.09	$0
Net income	2.55	2.18	1.92
Weighted average common shares outstanding	1,450	1,469	1,372
Dividends declared per common share	0.305	0.258	0.22875

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Assets:
Cash and cash equivalents	$1,086	$1,352
Short-term investments	5	0
Accounts receivable, net	5,457	5,384
Inventories	10,343	9,153
Deferred income taxes	506	435
Other current assets	140	202
Total current assets	17,537	16,526
Property and equipment, net	7,923	8,125
Goodwill	25,680	25,494
Intangible assets, net	10,127	10,446
Other assets	374	369
Total assets	61,641	60,960
Liabilities:
Accounts payable	3,560	3,801
Claims and discounts payable	3,075	2,814
Accrued expenses	3,246	3,178
Short-term debt	315	3,044
Current portion of long-term debt	2,104	653
Total current liabilities	12,300	13,490
Long-term debt	8,756	8,057
Deferred income taxes	3,678	3,702
Other long-term liabilities	1,102	1,137
Commitments and contingencies (Note 12)
Redeemable noncontrolling interest	37	0
Shareholders' equity:
Common stock, par value $0.01: 3,200 shares authorized; 1,612 shares issued and 1,391 shares outstanding at December 31, 2009 and 1,603 shares issued and 1,436 shares outstanding at December 31, 2008	16	16
Treasury stock, at cost: 219 shares at December 31, 2009 and 165 shares at December 31, 2008	(7,610)	(5,812)
Shares held in trust: 2 shares at December 31, 2009 and 2008	(56)	(56)
Capital surplus	27,198	27,280
Retained earnings	16,355	13,098
Accumulated other comprehensive loss	(135)	(143)
Total shareholders' equity	35,768	34,574
Total liabilities and shareholders' equity	61,641	60,960
Preference stock, series one ESOP convertible
Shareholders' equity:
Preferred stock	$0	$191

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
Share data in Millions, except Per Share data	Dec. 31, 2009	Dec. 31, 2008
Common stock, par value	0.01	0.01
Common stock, shares authorized	3,200	3,200
Common stock, shares issued	1,612	1,603
Common stock, shares outstanding	1,391	1,436
Treasury stock, shares	219	165
Shares held in trust, shares	2	2
Preference stock, series one ESOP convertible
Preferred stock, par value	$1	$1
Preferred stock, shares authorized	50	50
Preferred stock, issued	0	4
Preferred stock, outstanding	0	4

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 29, 2007
Cash flows from operating activities:
Cash receipts from revenues	$93,568	$82,250	$72,533
Cash paid for inventory and prescriptions dispensed by retail network pharmacies	(73,536)	(64,131)	(56,319)
Cash paid to other suppliers and employees	(13,121)	(11,832)	(10,769)
Interest and dividends received	5	20	34
Interest paid	(542)	(574)	(468)
Income taxes paid	(2,339)	(1,786)	(1,781)
Net cash provided by operating activities	4,035	3,947	3,230
Cash flows from investing activities:
Additions to property and equipment	(2,548)	(2,180)	(1,805)
Proceeds from sale-leaseback transactions	1,562	204	601
Acquisitions (net of cash acquired) and other investments	(101)	(2,651)	(1,984)
Purchase of short-term investments	(5)	0	0
Sale of short-term investments	0	28	0
Proceeds from sale or disposal of assets	23	19	106
Net cash used in investing activities	(1,069)	(4,580)	(3,082)
Cash flows from financing activities:
Increase (decrease) in short-term debt	(2,729)	959	242
Repayment of debt assumed in acquisition	0	(353)	0
Issuance of long-term debt	2,800	350	6,000
Repayments of long-term debt	(653)	(2)	(822)
Dividends paid	(439)	(383)	(323)
Derivative settlements	(3)	0	0
Proceeds from exercise of stock options	250	328	553
Excess tax benefits from stock-based compensation	19	53	98
Repurchase of common stock	(2,477)	(23)	(5,370)
Net cash provided by (used in) financing activities	(3,232)	929	378
Net increase (decrease) in cash and cash equivalents	(266)	296	526
Cash and cash equivalents at beginning of year	1,352	1,056	530
Cash and cash equivalents at end of year	1,086	1,352	1,056
Reconciliation of net income to net cash provided by operating activities:
Net income	3,696	3,212	2,637
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,389	1,274	1,095
Stock-based compensation	165	92	78
Deferred income taxes and other non-cash items	48	(3)	39
Change in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(86)	(291)	280
Inventories	(1,199)	(488)	(448)
Other current assets	48	12	(59)
Other assets	(2)	19	(26)
Accounts payable	4	(64)	(181)
Accrued expenses	(66)	183	(168)
Other long-term liabilities	38	1	(17)
Net cash provided by operating activities	$4,035	$3,947	$3,230

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions									Total
Beginning of year at Dec. 30, 2006	$9	($314)	$0	($82)	$2,198	($73)	$212	$7,966
Beginning of year at Dec. 30, 2006	847	(22)	0				4
Purchase of treasury shares		(135)
Conversion of preference stock		1					0
Transfer from shares held in trust		0	0
Employee stock purchase plan issuances		2
Common stock issued for Caremark Merger	713		(9)
Stock options exercised and stock awards	30
Net income								2,637	2,637
Purchase of treasury shares		(5,379)
Reduction of guaranteed ESOP obligation				38
Common stock dividends								(308)
Net cash flow hedges, net of income tax						3
Preference stock dividends								(15)
Pension liability adjustment, net of income tax						20
Tax benefit on preference stock dividends								1
Adoption of ASC 715-60 (formerly EITF 06-04 and 06-10)								0
Adoption of ASC 740 (formerly FIN 48)								6
Conversion of preference stock		25			(14)		(10)
Transfer from shares held in trust		0	0
Common stock issued for Caremark Merger	7		(301)		23,942
Conversion of shares held in Trust to treasury stock					0
Stock option activity and stock awards	0				608
Tax benefit on stock options and stock awards					98
Employee stock purchase plan issuances		48
End of year at Dec. 29, 2007	1,590	(154)	(9)				4
End of year at Dec. 29, 2007	16	(5,620)	(301)	(44)	26,832	(50)	202	10,287	31,322
Purchase of treasury shares		(7)
Conversion of preference stock		1					0
Transfer from shares held in trust		(7)	7
Employee stock purchase plan issuances		2
Common stock issued for Caremark Merger	0		0
Stock options exercised and stock awards	13
Net income								3,212	3,212
Purchase of treasury shares		(33)
Reduction of guaranteed ESOP obligation				44
Common stock dividends								(370)
Net cash flow hedges, net of income tax						3
Preference stock dividends								(14)
Pension liability adjustment, net of income tax						(96)
Tax benefit on preference stock dividends								1
Adoption of ASC 715-60 (formerly EITF 06-04 and 06-10)								(18)
Adoption of ASC 740 (formerly FIN 48)								0
Conversion of preference stock		35			(24)		(11)
Transfer from shares held in trust		(272)	245
Common stock issued for Caremark Merger	0		0		0
Conversion of shares held in Trust to treasury stock					27
Stock option activity and stock awards	0				392
Tax benefit on stock options and stock awards					53
Employee stock purchase plan issuances		78
End of year at Dec. 31, 2008	1,603	(165)	(2)				4
End of year at Dec. 31, 2008	16	(5,812)	(56)	0	27,280	(143)	191	13,098	34,574
Purchase of treasury shares		(73)
Conversion of preference stock		17					(4)
Transfer from shares held in trust		0	0
Employee stock purchase plan issuances		2
Common stock issued for Caremark Merger	0		0
Stock options exercised and stock awards	9
Net income								3,696	3,696
Purchase of treasury shares		(2,477)
Reduction of guaranteed ESOP obligation				0
Common stock dividends								(439)
Net cash flow hedges, net of income tax						1
Preference stock dividends								0
Pension liability adjustment, net of income tax						7
Tax benefit on preference stock dividends								0
Adoption of ASC 715-60 (formerly EITF 06-04 and 06-10)								0
Adoption of ASC 740 (formerly FIN 48)								0
Conversion of preference stock		583			(392)		(191)
Transfer from shares held in trust		0	0
Common stock issued for Caremark Merger	0		0		0
Conversion of shares held in Trust to treasury stock					0
Stock option activity and stock awards	0				291
Tax benefit on stock options and stock awards					19
Employee stock purchase plan issuances		96
End of year at Dec. 31, 2009	1,612	(219)	(2)				0
End of year at Dec. 31, 2009	$16	($7,610)	($56)	$0	$27,198	($135)	$0	$16,355	$35,768

Schedule II - Valuation and Qua

Schedule II - Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule II - Valuation and Qualifying Accounts	Schedule II Valuation and Qualifying Accounts In millions Balanceat Beginningof Year Additions ChargedtoBad Debt Expense Write-offs Chargedto Allowance Balance at EndofYear Accounts Receivable Allowance for Doubtful Accounts: Fiscal Year Ended December31, 2009 $ 189 $ 188 $ 105 $ 272 Fiscal Year Ended December31, 2008 108 121 40 189 Fiscal Year Ended December29, 2007 74 91 57 108

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Significant Accounting Policies	1 Significant Accounting Policies Description of business - CVS Caremark Corporation (the Company) is the largest pharmacy health care provider (based on revenues and prescriptions filled) in the United States. Pharmacy Services Segment (the PSS) - The PSS provides a full range of prescription benefit management services including mail order pharmacy services, specialty pharmacy services, plan design and administration, formulary management and claims processing. The Companys clients are primarily employers, insurance companies, unions, government employee groups, managed care organizations and other sponsors of health benefit plans and individuals throughout the United States. As a pharmacy benefits manager, the PSS manages the dispensing of pharmaceuticals through our mail order pharmacies and national network of approximately 64,000 retail pharmacies to eligible members in the benefits plans maintained by our clients and utilizes its information systems to perform, among other things, safety checks, drug interaction screenings and brand to generic substitutions. The PSSs specialty pharmacies support individuals that require complex and expensive drug therapies. The specialty pharmacy business includes mail order and retail specialty pharmacies that operate under the Caremark and CarePlus CVS/pharmacyTM names. The PSS also provides health management programs, which include integrated disease management for 27 conditions, through Alere and our Accordant health management offering. In addition, through our SilverScript Insurance Company (SilverScript) and Accendo Insurance Company (Accendo) subsidiaries, the PSS is a national provider of drug benefits to eligible beneficiaries under the Federal Governments Medicare Part D program. The PSS acquired Accendo in the Longs Acquisition (defined later in Note 2), and, effective January1, 2009, Accendo replaced RxAmerica as the Medicare-approved prescription drug plan for the RxAmerica Medicare Part D drug benefit plans. The pharmacy services business generates net revenues primarily by contracting with clients to provide prescription drugs to plan members. Prescription drugs are dispensed by the mail order pharmacies, specialty pharmacies and national network of retail pharmacies. Net revenues are also generated by providing additional services to clients, including administrative services such as claims processing and formulary management, as well as health care related services such as disease management. The pharmacy services business operates under the Caremark Pharmacy Services, Caremark, CVS CaremarkTM, CarePlus CVS/pharmacy, CarePlusTM, RxAmerica Accordant Care and TheraCom names. As of December31, 2009, the Pharmacy Services segment operated 49 retail specialty pharmacy stores, 18 specialty mail order pharmacies and six mail service pharmacies located in 25 states, Puerto Rico and the District of Columbia. Retail Pharmacy Segment (the RPS) - The RPS 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, th

Goodwill and Other Intangibles

Goodwill and Other Intangibles
	12 Months Ended Dec. 31, 2009 USD / shares
Goodwill and Other Intangibles	3 Goodwill and Other Intangibles Goodwill and other indefinitely-lived assets are not amortized, but are subject to annual impairment reviews, or more frequent reviews if events or circumstances indicate impairment may exist. When evaluating goodwill for potential impairment, the Company first compares the fair value of the reporting unit to its carrying amount. The Company estimates the fair value of its reporting units using a combination of a future discounted cash flow valuation model and a comparable market transaction model. As the Company utilizes internal financial projections for the determination of future cash flows, the fair value methodology is considered to use inputs classified as Level 3 in the fair value hierarchy. If the estimated fair value of the reporting unit is less than its carrying amount, an impairment loss calculation is prepared. The impairment loss calculation compares the implied fair value of a reporting units goodwill with the carrying amount of its goodwill. If the carrying amount of the goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to the excess. During the third quarter of 2009, the Company performed its required annual goodwill impairment tests. The Company concluded there were no goodwill impairments as of the testing date. The carrying amount of goodwill was $25.7 billion and $25.5 billion as of December31, 2009 and 2008, respectively. During 2009, goodwill increased primarily due to the acquisition of Generation Health and the finalization of the purchase price allocation in connection with the Longs Acquisition. Indefinitely-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to its carrying value. The Company estimates the fair value of its indefinitely-lived trademark using the relief from royalty method under the income approach. As this method of estimating fair value utilizes internal financial projections for determination of future cash flows, the fair value methodology is considered to use inputs classified as Level 3 in the fair value hierarchy. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized and the asset is written down to its estimated fair value. During the third quarter of 2009, the Company performed its annual impairment test of the indefinitely-lived trademark and concluded there was no impairment as of the testing date. The carrying amount of indefinitely-lived assets was $6.4 billion as of December31, 2009 and 2008. Intangible assets with finite useful lives are amortized over their estimated useful lives. The Company amortizes intangible assets with finite lives over the estimated useful lives of the respective assets, which have a weighted average useful life of 13.2 years. The weighted average useful lives of the Companys customer contracts and relationships and covenants not to compete are 12.8 years. The weighted average of the Companys favorable leases and other intangible assets are 15.3 years. Amortization expense for intangible assets totaled $430 million, $405 million and $344 million in 2009, 2008 and 2007, resp

Share Repurchase Program

Share Repurchase Program
	12 Months Ended Dec. 31, 2009 USD / shares
Share Repurchase Program	4 Share Repurchase Program On November4, 2009, the Companys Board of Directors authorized, effective immediately, a share repurchase program for up to $2.0 billion of its outstanding common stock (the 2009 Repurchase Program). The share repurchase program expires in December 2011 and permits the Company to effect repurchases from time to time through a combination of open market repurchases, privately negotiated transactions and/or accelerated share repurchase programs. From November4, 2009 through December31, 2009, the Company repurchased 16.1million shares of common stock for approximately $500 million pursuant to the 2009 Repurchase Program. The 2009 Repurchase Program may be modified, extended or terminated by the Companys Board of Directors at any time. On May7, 2008, the Companys Board of Directors authorized, effective May21, 2008, a share repurchase program for up to $2.0 billion of its outstanding common stock (the 2008 Repurchase Program). From May21, 2008 through December31, 2008, the Company repurchased approximately 0.6million shares of common stock for $23 million under the 2008 Repurchase Program. During the year ended December31, 2009, the Company repurchased approximately 57.0million shares of common stock for approximately $2.0 billion completing the 2008 Repurchase Program. On May9, 2007, the Companys Board of Directors authorized a share repurchase program for up to $5.0 billion of its outstanding common stock. The share repurchase program was completed during 2007 through a $2.5 billion fixed dollar accelerated share repurchase agreement (the May ASR agreement), under which final settlement occurred in October 2007 and resulted in the repurchase of approximately 67.5million shares of common stock; an open market repurchase program, which concluded in November 2007 and resulted in approximately 5.3million shares of common stock being repurchased for approximately $212 million; and a $2.3 billion dollar fixed accelerated share repurchase agreement (the November ASR agreement), which resulted in an initial 51.6million shares of common stock being purchased and placed into treasury stock as of December29, 2007. The final settlement under the November ASR agreement occurred on March28, 2008 and resulted in the Company receiving an additional 5.7million shares of common stock, which were placed into treasury stock as of March29, 2008.

Borrowing and Credit Agreements

Borrowing and Credit Agreements
	12 Months Ended Dec. 31, 2009 USD / shares
Borrowing and Credit Agreements	5 Borrowing and Credit Agreements The following table is a summary of the Companys borrowings as of December31: In millions 2009 2008 Commercial paper $ 315 $ 2,544 Bridge credit facility 500 4.0% senior notes due 2009 650 Floating rate notes due 2010(1) 350 350 Floating rate notes due 2010(1) 1,750 1,750 5.75% senior notes due 2011 800 800 Floating rate note due 2011(1) 300 4.875% senior notes due 2014 550 550 6.125% senior notes due 2016 700 700 5.75% senior notes due 2017 1,750 1,750 6.25% senior notes due 2027 1,000 1,000 6.60% senior notes due 2019 1,000 6.125% note due 2039 1,500 6.302% Enhanced Capital Advantage Preferred Securities 1,000 1,000 Mortgage notes payable 6 7 Capital lease obligations 154 153 11,175 11,754 Less: Short-term debt (315 ) (3,044 ) Current portion of long-term debt (2,104 ) (653 ) $ 8,756 $ 8,057 (1) As of December31, 2009, the weighted average interest rate for the Companys floating rate notes due in 2010 was 0.87%. In connection with its commercial paper program, the Company maintains a $675 million, five-year unsecured back-up credit facility, which expires on June2, 2010, a $1.4 billion, five-year unsecured back-up credit facility, which expires on May12, 2011 and a $1.3 billion, five-year unsecured back-up credit facility, which expires on March12, 2012. The credit facilities allow for borrowings at various rates depending on the Companys public debt ratings and require the Company to pay a quarterly facility fee of 0.1%, regardless of usage. As of December31, 2009, the Company had no outstanding borrowings against the back-up credit facilities. The weighted average interest rate for short-term debt was 0.31% as of December31, 2009 and 5.36% as of December31, 2008. On March10, 2009, the Company issued $1.0 billion of 6.60% unsecured senior notes due March15, 2019 (the March 2009 Notes). The March 2009 Notes pay interest semi-annually and may be redeemed, in whole or in part, at a defined redemption price plus accrued interest. The net proceeds were used to repay the bridge credit facility, a portion of the Companys outstanding commercial paper borrowings and for general corporate purposes. On July1, 2009, the Company issued a $300 million unsecured floating rate senior note due January30, 2011 (the the 2009 Floating Rate Note). The 2009 Floating Rate Note pays interest quarterly. The net proceeds from the 2009 Floating Rate Note were used for general corporate purposes. On September8, 2009, the Company issued $1.5 billion of 6.125% unsecured senior notes due September15, 2039 (the September 2009 Notes). The September 2009 Notes pay interest semi-annually and may be redeemed, in whole or in part, at a defined redemption price plus accrued interest. The net proceeds were used to repay a portion of the Companys outstandi

Leases

Leases
	12 Months Ended Dec. 31, 2009 USD / shares
Leases	6 Leases The Company leases most of its retail and mail locations, 11 of its distribution centers and certain corporate offices under non-cancelable operating leases, with initial terms of 15 to 25 years and with options that permit renewals for additional periods. The Company also leases certain equipment and other assets under noncancelable operating leases, with initial terms of 3 to 10 years. Minimum rent is expensed on a straight-line basis over the term of the lease. In addition to minimum rental payments, certain leases require additional payments based on sales volume, as well as reimbursement for real estate taxes, common area maintenance and insurance, which are expensed when incurred. The following table is a summary of the Companys net rental expense for operating leases for the respective years: In millions 2009 2008 2007 Minimum rentals $ 1,857 $ 1,691 $ 1,557 Contingent rentals 61 58 65 1,918 1,749 1,622 Less: sublease income (19 ) (25 ) (21 ) $ 1,899 $ 1,724 $ 1,601 The following table is a summary of the future minimum lease payments under capital and operating leases as of December31, 2009: In millions Capital Leases Operating Leases 2010 $ 17 $ 2,094 2011 17 1,877 2012 18 1,953 2013 18 1,855 2014 18 1,657 Thereafter 236 17,477 Total future lease payments $ 324 $ 26,913 Less: imputed interest (170 ) Present value of capital lease obligations $ 154 The Company finances a portion of its store development program through sale-leaseback transactions. The properties are sold at fair value, which approximates net book value, and the resulting leases qualify and are accounted for as operating leases. The operating leases that resulted from these transactions are included in the above table. The Company does not have any retained or contingent interests in the stores and does not provide any guarantees, other than a guarantee of lease payments, in connection with the sale-leaseback transactions. Proceeds from sale-leaseback transactions totaled $1.6 billion in 2009. This compares to $204 million in 2008 and $601 million in 2007.

Medicare Part D

Medicare Part D
	12 Months Ended Dec. 31, 2009 USD / shares
Medicare Part D	7 Medicare Part D The Company offers Medicare Part D benefits through SilverScript and Accendo, which have contracted with CMS to be a PDP and, pursuant to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), must be risk-bearing entities regulated under state insurance laws or similar statutes. SilverScript and Accendo are licensed domestic insurance companies under the applicable laws and regulations. Pursuant to these laws and regulations, SilverScript and Accendo must file quarterly and annual reports with the National Association of Insurance Commissioners (NAIC) and certain state regulators, must maintain certain minimum amounts of capital and surplus under a formula established by the NAIC and must, in certain circumstances, request and receive the approval of certain state regulators before making dividend payments or other capital distributions to the Company. The Company does not believe these limitations on dividends and distributions materially impact its financial position. The Company has recorded estimates of various assets and liabilities arising from its participation in the Medicare Part D program based on information in its claims management and enrollment systems. Significant estimates arising from its participation in this program include: (i)estimates of low-income cost subsidy and reinsurance amounts ultimately payable to or receivable from CMS based on a detailed claims reconciliation that will occur in 2010; (ii)estimates of amounts payable to or receivable from other PDPs for claims costs incurred as a result of retroactive enrollment changes, which were communicated by CMS after such claims had been incurred; and (iii)an estimate of amounts receivable from or payable to CMS under a risk-sharing feature of the Medicare Part D program design, referred to as the risk corridor.

Employee Stock Ownership Plan

Employee Stock Ownership Plan
	12 Months Ended Dec. 31, 2009 USD / shares
Employee Stock Ownership Plan	8 Employee Stock Ownership Plan The Company sponsored a defined contribution Employee Stock Ownership Plan (the ESOP) that covered full-time employees with at least one year of service. In 1989, the ESOP Trust issued and sold $358 million of 20-year, 8.52% notes, which were due and retired on December31, 2008 (the ESOP Notes). The proceeds from the ESOP Notes were used to purchase 7million shares of Series One ESOP Convertible Preference Stock (the ESOP Preference Stock) from the Company. Since the ESOP Notes were guaranteed by the Company, the outstanding balance was reflected as long-term debt, and a corresponding guaranteed ESOP obligation was reflected in shareholders equity in the consolidated balance sheet. Each share of ESOP Preference Stock had a guaranteed minimum liquidation value of $53.45, was convertible into 4.628 shares of common stock and was entitled to receive an annual dividend of $3.90 per share. The ESOP Trust used the dividends received and contributions from the Company to repay the ESOP Notes. As the ESOP Notes were repaid, ESOP Preference Stock was allocated to plan participants based on (i)the ratio of each years debt service payment to total current and future debt service payments multiplied by (ii)the number of unallocated shares of ESOP Preference Stock in the plan. As of December31, 2009, no shares of ESOP Preference Stock were outstanding and allocated to plan participants. On January30, 2009, pursuant to the Companys Amended and Restated Certificate of Incorporation (the Charter), the Company informed the trustee of the ESOP Trust of its intent to redeem for cash all of the outstanding shares of ESOP Preference Stock on February24, 2009 (the Redemption Date).Under the Charter, at any time prior to the Redemption Date, the trustee had the right to convert the ESOP Preference Stock into shares of the Companys Common Stock.The conversion rate at the time of the notice was 4.628 shares of Common Stock for each share of ESOP Preference Stock.The trustee exercised its right of conversion on February23, 2009, and all outstanding shares of ESOP Preference Stock were converted into Common Stock. Annual ESOP expense recognized is equal to (i)the interest incurred on the ESOP Notes plus (ii)the higher of (a)the principal repayments or (b)the cost of the shares allocated, less (iii)the dividends paid. Similarly, the guaranteed ESOP obligation is reduced by the higher of (i)the principal payments or (ii)the cost of shares allocated.

Pension Plans and Other Postret

Pension Plans and Other Postretirement Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Pension Plans and Other Postretirement Benefits	9 Pension Plans and Other Postretirement Benefits During the fourth quarter of 2009, the Company adopted the new disclosure requirements of ASC 715 Subtopic 20 Defined Benefit Plans (formerly FASB Staff Position (FSP) No. FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets), which enhances the required disclosures about plan assets in an employers defined benefit pension or other postretirement plan, including investment allocations decisions, inputs and valuations techniques used to measure the fair value of plan assets and significant concentrations of risks within plan assets. Defined Contribution Plans The Company sponsors voluntary 401(k) Savings Plans that cover substantially all employees who meet plan eligibility requirements. The Company makes matching contributions consistent with the provisions of the plans. At the participants option, account balances, including the Companys matching contribution, can be moved without restriction among various investment options, including the Companys common stock. The Company also maintains a nonqualified, unfunded Deferred Compensation Plan for certain key employees. This plan provides participants the opportunity to defer portions of their compensation and receive matching contributions that they would have otherwise received under the 401(k) Savings Plan if not for certain restrictions and limitations under the Internal Revenue Code. The Companys contribution under the above defined contribution plans totaled $173 million in 2009, $117 million in 2008 and $81 million in 2007. The Company also sponsored an Employee Stock Ownership Plan. See Note 8 for additional information about this plan. Other Postretirement Benefits The Company provides postretirement health care and life insurance benefits to certain retirees who meet eligibility requirements. The Companys funding policy is generally to pay covered expenses as they are incurred. For retiree medical plan accounting, the Company reviews external data and its own historical trends for health care costs to determine the health care cost trend rates. As of December31, 2009 and 2008, the Companys postretirement medical plans have an accumulated postretirement benefit obligation of $17 million. Net periodic benefit costs related to these postretirement medical plans were approximately $1 million for 2009, 2008 and 2007. Pension Plans The Company sponsors ten non-contributory defined benefit pension plans that cover certain full-time employees, which were frozen in prior periods. These plans are funded based on actuarial calculations and applicable federal regulations. As of December31, 2009, the Companys qualified defined benefit plans have a projected benefit obligation of $612 million and plan assets of $372 million. As of December31, 2008, the Companys qualified defined benefit plans had a projected benefit obligation of $546 million and plan assets of $286 million. Net periodic pension costs related to these qualified benefit plans were $16 million, $9 million and $14 million in 2009, 2008 and 2007, respectively. The discount rate is determined by examining the current yields observed on the m

Stock Incentive Plans

Stock Incentive Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Stock Incentive Plans	10 Stock Incentive Plans Stock-based compensation expense is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable requisite service period of the stock award (generally three to five years) using the straight-line method. Stock-based compensation costs are included in selling, general and administrative expenses. Compensation expense related to stock options, which includes the 1999 Employee Stock Purchase Plan (the 1999 ESPP) and the 2007 Employee Stock Purchase Plan (the 2007 ESPP and collectively, the ESPP) totaled $136 million, $106 million and $85 million for 2009, 2008 and 2007, respectively. The recognized tax benefit was $45 million, $33 million and $27 million for 2009, 2008 and 2007, respectively. Compensation expense related to restricted stock awards totaled $29 million, $19 million and $12 million for 2009, 2008 and 2007, respectively. The 1999 ESPP provides for the purchase of up to 15million shares of common stock. As a result of the 1999 ESPP not having sufficient shares available for the program to continue beyond 2007, the Board of Directors adopted, and shareholders approved, the 2007 ESPP. Under the 2007 ESPP, eligible employees may purchase common stock at the end of each six-month offering period, at a purchase price equal to 85% of the lower of the fair market value on the first day or the last day of the offering period and provides for the purchase of up to 15million shares of common stock. During 2009, 2million shares of common stock were purchased, under the provisions of the 2007 ESPP, at an average price of $24.70 per share. As of December31, 2009, 15million and 4million shares of common stock have been issued under the 1999 ESPP and 2007 ESPP, respectively. The fair value of stock-based compensation associated with the Companys ESPP is estimated on the date of grant (i.e., the beginning of the offering period) using the Black-Scholes Option Pricing Model. The following table is a summary of the assumptions used to value the ESPP awards for each of the respective periods: 2009 2008 2007 Dividend yield(1) 0.50 % 0.32 % 0.33 % Expected volatility(2) 48.89 % 25.22 % 21.72 % Risk-free interest rate(3) 0.31 % 2.75 % 5.01 % Expected life (in years)(4) 0.5 0.5 0.5 Weighted-average grant date fair value $ 8.51 $ 8.73 $ 7.26 (1) The dividend yield is calculated based on semi-annual dividends paid and the fair market value of the Companys stock at the grant date. (2) The expected volatility is based on the historical volatility of the Companys daily stock market prices over the previous six month period. (3) The risk-free interest rate is based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP options (i.e., 6 months). (4) The expected life is based on the semi-annual purchase period. The Companys 1997 Incentive Compensation Plan (the ICP) provides for the granting of up to 153million shares of common stock in the form of stock options

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	11 Income Taxes The income tax provision consisted of the following for the respective years: In millions 2009 2008 2007 Current: Federal $ 1,766 $ 1,680 $ 1,251 State 397 365 241 2,163 2,045 1,492 Deferred: Federal 38 133 206 State 4 15 24 42 148 230 Total $ 2,205 $ 2,193 $ 1,722 The following table is a reconciliation of the statutory income tax rate to the Companys effective income tax rate for the respective years: 2009 2008 2007 Statutory income tax rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 4.5 4.1 4.2 Other 0.6 0.5 0.3 Federal and net State reserve release (2.8 ) Effective income tax rate 37.3 % 39.6 % 39.5 % The following table is a summary of the significant components of the Companys deferred tax assets and liabilities as of December31: In millions 2009 2008 Deferred tax assets: Lease and rents $ 334 $ 318 Inventory 55 73 Employee benefits 250 241 Allowance for bad debt 130 95 Retirement benefits 94 98 Net operating losses 8 13 Other 287 241 Total deferred tax assets 1,158 1,079 Deferred tax liabilities: Depreciation and amortization (4,330 ) (4,346 ) Net deferred tax liabilities $ (3,172 ) $ (3,267 ) Net deferred tax assets (liabilities) are presented on the consolidated balance sheets as follows as of December31: In millions 2009 2008 Deferred tax assetscurrent $ 506 $ 435 Deferred tax liabilitiesnoncurrent (3,678 ) (3,702 ) Net deferred tax liabilities $ (3,172 ) $ (3,267 ) The Company believes it is more likely than not the deferred tax assets will be realized during future periods. The following table is a summary of the activity in the Companys income tax reserve as of December31: In millions 2009 2008 Beginning Balance $ 257 $ 234 Additions based on tax positions related to the current year 1 6 Additions based on tax positions related to prior years 12 48 Reductions for tax positions of prior years (6 ) (8 ) Expiration of statute of limitations (155 ) (9 ) Settlements (48 ) (14 ) Ending Balance $ 61 $ 257 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 2001. The Company and its subsidiaries anticipate that a number of income tax examinations will conclude

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies	12 Commitments and Contingencies Between 1991 and 1997, the Company sold or spun off a number of subsidiaries, including Bobs Stores, Linens n Things, Marshalls, Kay-Bee Toys, Wilsons, This End Up and Footstar. In many cases, when a former subsidiary leased a store, the Company provided a guarantee of the stores lease obligations. When the subsidiaries were disposed of, the Companys guarantees remained in place, although each initial purchaser has indemnified the Company for any lease obligations the Company was required to satisfy. If any of the purchasers or any of the former subsidiaries were to become insolvent and failed to make the required payments under a store lease, the Company could be required to satisfy these obligations. As of December31, 2009, the Company guaranteed approximately 70 such store leases (excluding the lease guarantees related to Linens n Things, which are discussed in Note 1 previously in this document), with the maximum remaining lease term extending through 2018. Management believes the ultimate disposition of any of the remaining guarantees will not have a material adverse effect on the Companys consolidated financial condition, results of operations or future cash flows. Caremarks subsidiary Caremark Inc. (now known as Caremark, L.L.C.) is a defendant in a qui tam lawsuit initially filed by a relator on behalf of various state and federal government agencies in Texas federal court in 1999. The case was unsealed in May 2005. The case seeks monetary damages and alleges that Caremarks processing of Medicaid and certain other government claims on behalf of its clients (which allegedly resulted in underpayments from our clients to the applicable government agencies) violates applicable federal or state false claims acts and fraud statutes. The United States and the States of Texas, Tennessee, Florida, Arkansas, Louisiana and California intervened in the lawsuit, but Tennessee and Florida withdrew from the lawsuit in August 2006 and May 2007, respectively. The parties previously filed cross motions for partial summary judgment, and in August 2008, the court granted several of Caremarks motions and denied the motions filed by the plaintiffs. The courts rulings are favorable to Caremark and substantially limit the ability of the plaintiffs to assert false claims act allegations or statutory or common law theories of recovery based on Caremarks processing of Medicaid and other government reimbursement requests. The state plaintiffs and the relator filed motions asking the court to reconsider its rulings, and these motions were subsequently denied. The courts rulings are on appeal before the United States Court of Appeals for the Fifth Circuit. In April 2009, the State of Texas filed a purported civil enforcement action against Caremark for injunctive relief, damages and civil penalties in Travis County, Texas alleging that Caremark violated the Texas Medicaid Fraud Prevention Act and other state laws based on our processing of Texas Medicaid claims on behalf of PBM clients. The claims and issues raised in this lawsuit are related to the claims and issues pending in the federal qui tam lawsuit described abo

Segment Reporting

Segment Reporting
	12 Months Ended Dec. 31, 2009 USD / shares
Segment Reporting	13 Segment Reporting The Company currently has three segments: Pharmacy Services, Retail Pharmacy and Corporate. During the third quarter of 2009, the Company made changes to its reportable segments to reflect changes that were made to the way the Companys management evaluates the performance of operations, develops strategy and allocates resources. This change involves the recording of certain administrative expenses previously recorded within the Pharmacy Services and Retail Pharmacy segments to a new Corporate segment. The Corporate segment consists of costs primarily associated with executive management, corporate relations, legal, compliance, human resources, corporate information technology and finance. This change had no impact on the Companys consolidated results of operations. The Companys historical segment disclosures have been revised to conform to the current presentation. During the third quarter of 2009, the Company also made a change to its Pharmacy Services segment as it relates to the Companys intersegment activities (such as the Maintenance Choice program). This change impacts the gross profit and operating profit lines within the Pharmacy Services segment. Under the Maintenance Choice program, Pharmacy Services clients can elect to pick up their maintenance prescriptions at Retail Pharmacy segment stores instead of receiving them through the mail. When this occurs, both the Pharmacy Services and Retail Pharmacy segments now record the revenue, gross profit and operating profit on a standalone basis and corresponding intersegment eliminations are made. This change had no impact on the Companys consolidated results of operations. The Company evaluates its Pharmacy Services and Retail Pharmacy segment performance based on net revenue, gross profit and operating profit before the effect of non-recurring charges and gains and certain intersegment activities and charges. The Company evaluates the performance of its Corporate segment based on operating expenses before the effect of discontinued operations and certain intersegment activities and charges. See Note 1 for a description of the Pharmacy Services, Retail Pharmacy and Corporate segments and related significant accounting policies. The following table is a reconciliation of the Companys business segments to the consolidated financial statements: In millions PharmacyServices Segment(1)(3) RetailPharmacy Segment(3) Corporate Segment Intersegment Eliminations(2)(3) Consolidated Totals 2009: Net revenues $ 51,065 $ 55,355 $ $ (7,691 ) $ 98,729 Gross profit 3,835 16,593 (48 ) 20,380 Operating profit 2,866 4,159 (539 ) (48 ) 6,438 Depreciation and amortization 377 965 47 1,389 Total assets 33,082 28,302 774 (517 ) 61,641 Goodwill 18,879 6,801 25,680 Additions to property and equipment 218 2,183 147 2,548 2008(4): Net revenues $ 43,769 $ 48,990 $ $ (5,

Earnings Per Common Share

Earnings Per Common Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Common Share	14 Earnings Per Common Share The following is a reconciliation of basic and diluted earnings per common share for the respective fiscal years: In millions, except per share amounts 2009 2008 2007 Numerator for earnings per common share calculation: Income from continuing operations $ 3,708 $ 3,344 $ 2,637 Preference dividends, net of income tax benefit (14 ) (14 ) Income from continuing operations available to common shareholders, basic $ 3,708 $ 3,330 $ 2,623 Loss from discontinued operations, net of income tax benefit (12 ) (132 ) Net income available to common shareholders, basic $ 3,696 $ 3,198 $ 2,623 Income from continuing operations $ 3,708 $ 3,344 $ 2,637 Dilutive earnings adjustments (3 ) (4 ) Income from continuing operations available to common shareholders, diluted $ 3,708 $ 3,341 $ 2,633 Loss from discontinued operations, net of income tax benefit (12 ) (132 ) Net income available to common shareholders, diluted $ 3,696 $ 3,209 $ 2,633 Denominator for earnings per common share calculation: Weighted average common shares, basic 1,434 1,434 1,328 Preference stock 1 17 18 Stock options 10 13 23 Restricted stock units 5 5 3 Weighted average common shares, diluted 1,450 1,469 1,372 Basic earnings per common share: Income from continuing operations $ 2.59 $ 2.32 $ 1.97 Loss from discontinued operations (0.01 ) (0.09 ) Net income $ 2.58 $ 2.23 $ 1.97 Diluted earnings per common share: Income from continuing operations $ 2.56 $ 2.27 $ 1.92 Loss from discontinued operations (0.01 ) (0.09 ) Net income $ 2.55 $ 2.18 $ 1.92

Quarterly Financial Information

Quarterly Financial Information (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Quarterly Financial Information (Unaudited)	15 Quarterly Financial Information (Unaudited) In millions, except per share amounts FirstQuarter SecondQuarter ThirdQuarter FourthQuarter FiscalYear 2009: Net revenues $ 23,394 $ 24,871 $ 24,642 $ 25,822 $ 98,729 Gross profit 4,748 5,052 5,012 5,568 20,380 Operating profit 1,377 1,600 1,566 1,895 6,438 Income from continuing operations 743 889 1,023 1,053 3,708 Loss from discontinued operations, net of income tax benefit (5 ) (3 ) (2 ) (2 ) (12 ) Net income 738 886 1,021 1,051 3,696 Earnings per share from continuing operations, basic $ 0.51 $ 0.61 $ 0.72 $ 0.75 $ 2.59 Loss per common share from discontinued operations (0.01 ) (0.01 ) Net earnings per common share, basic $ 0.51 $ 0.61 $ 0.71 $ 0.75 $ 2.58 Earnings per common share from continuing operations, diluted $ 0.51 $ 0.60 $ 0.71 $ 0.74 $ 2.56 Loss per common share from discontinued operations (0.01 ) (0.01 ) Net earnings per common share, diluted $ 0.50 $ 0.60 $ 0.71 $ 0.74 $ 2.55 Dividends per common share $ 0.07625 $ 0.07625 $ 0.07625 $ 0.07625 $ 0.30500 Stock price: (New York Stock Exchange) High $ 30.47 $ 34.22 $ 37.75 $ 38.27 $ 38.27 Low $ 23.74 $ 27.08 $ 30.58 $ 27.38 $ 23.74 2008(1): Net revenues $ 21,326 $ 21,140 $ 20,863 $ 24,143 $ 87,472 Gross profit 4,293 4,373 4,401 5,223 18,290 Operating profit 1,370 1,478 1,466 1,732 6,046 Income from continuing operations 749 824 819 952 3,344 Loss from discontinued operations, net of income tax benefit (49 ) (83 ) (132 ) Net income 749 775 736 952 3,212 Earnings per share from continuing operations, basic $ 0.52 $ 0.57 $ 0.57 $ 0.66 $ 2.32 Loss per common share from discontinued operations (0.03 ) (0.06 ) (0.09 ) Net earnings per common share, basic $ 0.52 $ 0.54 $ 0.51 $ 0.66 $ 2.23 Earnings per common share from continuing operations, diluted $ 0.51 $ 0.56 $ 0.56 $ 0.65 $ 2.27 Loss per common share from discontinued operations (0.03 ) (0.06 ) (0.09 ) Net earnings per common share, diluted $ 0.51 $ 0.53 $ 0.50 $ 0.65 $ 2.18

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 22, 2010	Jun. 30, 2009
Trading Symbol	CVS
Entity Registrant Name	CVS CAREMARK CORP
Entity Central Index Key	0000064803
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,390,515,000
Entity Public Float			$46,267,935,658