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8119700000
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0.530
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16767100000
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0.560
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1.090
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30300000
10-Q
false
N.A.
2009-06-30
CVS CAREMARK CORP
0000064803
CVS
--12-31
Yes
No
Yes
Large Accelerated Filer
-127100000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 2</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">In connection with certain business dispositions
completed between 1991 and 1997, the Company continues to guarantee
store lease obligations for a number of former subsidiaries,
including Linens ‘n Things. On May 2, 2008, Linens
Holding Co. and certain affiliates, which operate Linens ‘n
Things, filed voluntary petitions under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the District of Delaware. The Company’s loss from
discontinued operations for the second quarter and six months
ended</font> <font size="2" face=
"Times New Roman">June 30, 2009 included $2.6 million ($4.3
million, net of a $1.7 million income tax benefit) and $7.7 million
($12.6 million, net of a $4.9 million income tax benefit) of
lease-related costs (i.e., interest accretion and legal fees),
respectively. The loss from discontinued operations for the second
quarter and six months ended June 28, 2008 was $48.7 million
($78.8 million, net of a $30.1 million income tax benefit) of
lease-related costs.</font></p>
</div>
1.118
1.105
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 11</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">Between 1991 and 1997, the
Company sold or spun off a number of subsidiaries, including
Bob’s 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 store’s lease obligations. When the subsidiaries were
disposed of, the Company’s 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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">As of June 30, 2009, the
Company guaranteed approximately 95 such store leases (excluding
the lease guarantees related to Linens ‘n Things, which are
discussed in Note 2 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 Company’s
consolidated financial condition, results of operations or future
cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">Caremark’s subsidiary
Caremark, Inc. (now known as Caremark, L.L.C.) is a defendant in a
<i>qui tam</i> 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
money damages and alleges that Caremark’s 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 Caremark’s motions and denied the motions filed by
the plaintiffs. The court’s recent 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 Caremark’s 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 recently denied.
The</font> <font face="Times New Roman" size="2">United States is
seeking an appeal of the court’s rulings. 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 <i>qui
tam</i> lawsuit described above.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In December 2007, the Company
received a document subpoena from the Office of Inspector General,
United States Department of Health and Human Services (OIG),
requesting information relating to the processing of Medicaid and
other government agency claims on an adjudication platform of
AdvancePCS (acquired by Caremark in 2004 and now known as
CaremarkPCS, L.L.C.). The Company has initiated discussions with
the OIG and with the U.S. Department of Justice concerning our
government claims processing activities on the two adjudication
platforms used by AdvancePCS and one adjudication platform used by
PharmaCare. The Company is also cooperating with the requests for
information contained in the document subpoena by producing
responsive documents on a rolling basis. The Company cannot predict
with certainty the timing, outcome or consequence of any review of
such information.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">Caremark was named in a
putative class action lawsuit filed in October 2003 in Alabama
state court by John Lauriello, purportedly on behalf of
participants in the 1999 settlement of various securities class
action and derivative lawsuits against Caremark and others. Other
defendants include insurance companies that provided coverage to
Caremark with respect to the settled lawsuits. The Lauriello
lawsuit seeks approximately $3.2 billion in compensatory damages
plus other non-specified damages based on allegations that the
amount of insurance coverage available for the settled lawsuits was
misrepresented and suppressed. A similar lawsuit was filed in
November 2003 by Frank McArthur, also in Alabama state court,
naming as defendants Caremark, several insurance companies,
attorneys and law firms involved in the 1999 settlement. This
lawsuit was stayed as a later-filed class action, but McArthur was
subsequently allowed to intervene in the Lauriello action. The
attorneys and law firms named as defendants in McArthur’s
intervention pleadings have been dismissed from the case, and
discovery on class certification and adequacy issues is
underway.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">Various lawsuits have been
filed alleging that Caremark and its subsidiaries Caremark Inc.
(now known as Caremark, L.L.C.) and AdvancePCS (now known as
CaremarkPCS, L.L.C.) have violated applicable antitrust laws in
establishing and maintaining retail pharmacy networks for client
health plans. In August 2003, Bellevue Drug Co., Robert Schreiber,
Inc. d/b/a Burns Pharmacy and Rehn-Huerbinger Drug Co. d/b/a
Parkway Drugs #4, together with Pharmacy Freedom Fund and the
National Community Pharmacists Association filed a putative class
action against AdvancePCS in Pennsylvania federal court, seeking
treble damages and injunctive relief. The claims were initially
sent to arbitration based on contract terms between the pharmacies
and AdvancePCS.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In October 2003, two
independent pharmacies, North Jackson Pharmacy, Inc. and C&C,
Inc. d/b/a Big C Discount Drugs, Inc. filed a putative class action
complaint in Alabama federal court against Caremark, Caremark Inc.,
AdvancePCS (acquired by Caremark in March 2004 and now known as
CaremarkPCS, L.L.C.) and two PBM competitors, seeking treble
damages and injunctive relief. The case against Caremark and
Caremark Inc. was transferred to Illinois federal court, and the
AdvancePCS case was sent to arbitration based on contract terms
between the pharmacies and AdvancePCS. The arbitration was then
stayed by the parties pending developments in Caremark’s
court case.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In August 2006, the Bellevue
case and the North Jackson Pharmacy case were transferred to
Pennsylvania federal court by the Judicial Panel on Multidistrict
Litigation for coordinated and consolidated proceedings
with</font> <!--##PBStart##--><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
<!-- 28 Begin_Flowing_Text * DO NOT REMOVE OR EDIT --><font face=
"Times New Roman" size="2">other cases before the panel, including
cases against other PBMs. Caremark has appealed a decision which
vacated the order compelling arbitration and staying the
proceedings in the Bellevue case to the Third Circuit Court of
Appeals. Motions for class certification in the coordinated cases
within the multidistrict litigation, including the North Jackson
Pharmacy case, remain pending. The consolidated action is now known
as the In Re Pharmacy Benefit Managers Antitrust
Litigation.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company is also a party
to other litigation arising in the normal course of its business,
none of which is expected to be material to the Company. The
Company can give no assurance, however, that the Company’s
operating results and financial condition will not be materially
adversely affected, or that the Company will not be required to
materially change its business practices, based on: (i) future
enactment of new health care or other laws or regulations;
(ii) the interpretation or application of existing laws or
regulations, as they may relate to the Company’s business or
the pharmacy services industry; (iii) pending or future
federal or state governmental investigations of the Company’s
business or the pharmacy services industry; (iv) institution
of government enforcement actions against the Company;
(v) adverse developments in any pending <i>qui tam</i> lawsuit
against the Company, whether sealed or unsealed, or in any future
<i>qui tam</i> lawsuit that may be filed against the Company; or
(vi) adverse developments in other pending or future legal
proceedings against the Company or affecting the pharmacy services
industry.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</div>
0.1525
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 5</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Accumulated other
comprehensive loss consists of changes in the net actuarial gains
and losses associated with pension and other post retirement
benefit plans, unrealized losses on derivatives and adjustment to
initially apply SFAS No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement
Plans” (“SFAS 158”). In accordance with SFAS 158,
the amount included in accumulated other comprehensive income
related to the Company’s pension and post retirement plans
was $216.9 million pre-tax ($132.3 million after-tax) as of
June 30, 2009 and as of December 31, 2008, respectively.
The unrealized loss on derivatives totaled $13.9 million pre-tax
($8.8 million after-tax) and $16.6 million pre-tax ($10.5 million
after-tax) as of June 30, 2009 and December 31, 2008,
respectively.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Following are the changes in
comprehensive income:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="56%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b><i>Second Quarter Ended</i></b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b><i>Six Months Ended</i></b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 39pt">
<font size="1" face="Times New Roman"><i>(In
millions)</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net earnings, as reported</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>886.5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">774.8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,624.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,523.3</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Reclassification of unrealized loss on
derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>0.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1.7</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.7</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Total comprehensive income, net of
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>887.4</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">775.6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,626.6</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,525.0</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">As of June 30, 2009, the
Company had no freestanding derivatives in place.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 7</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">On March 10, 2009, the
Company issued $1.0 billion of 6.60% unsecured senior notes due
March 15, 2019 (the “2009 Notes”). The 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 Company’s outstanding commercial paper borrowings and
for general corporate purposes.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">As of June 30, 2009, the
Company’s financial instruments included cash and cash
equivalents. Due to the short-term nature of these instruments, the
Company’s carrying value approximates fair value. The
carrying amount and estimated fair value of long-term debt was $7.2
billion and $7.0 billion, respectively as of June 30, 2009.
The carrying amount and estimated fair value of long-term debt was
$7.9 billion and $6.9 billion, respectively as of December 31,
2008. The fair value of long-term debt was estimated based on rates
currently offered to the Company for debt with similar terms and
maturities.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">On July 1, 2009, the Company
issued a $300 million unsecured floating rate senior note due
January 30, 2011 (the “the 2009 Floating Rate
Note”). The 2009 Floating Rate Note pays interest quarterly.
The net proceeds from the 2009 Floating Rate Note will be used for
general corporate purposes.</font></p>
</div>
38464800000
60900000
736200000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 9</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company accounts for
stock-based compensation in accordance with SFAS No. 123
(revised 2004), “Share-Based Payment” (“SFAS
123(R)”). Compensation expense related to stock options,
which includes the 1999 Employee Stock Purchase Plan (“1999
ESPP”) and the 2007 Employee Stock Purchase Plan (“2007
ESPP”) and collectively (the “ESPP”) for the
quarter and six months ended June 30, 2009 totaled $31.3
million and $58.8 million, respectively, compared to $27.1
million and $47.8 million for the second quarter and six months
ended June 28, 2008, respectively. Compensation expense
related to restricted stock awards for the second quarter and six
months ended June 30, 2009, totaled $9.0 million and $16.0
million, respectively, compared to $6.9 million and
$14.0 million for the second quarter and six months ended
June 28, 2008. During the second quarter ended June 30,
2009, the Company granted 15.9 million stock options with a
weighted average fair value of $7.01 and a</font> <font face=
"Times New Roman" size="2">weighted average exercise price of
$28.09 under the Company’s 1997 Incentive Compensation Plan.
The Company has 71.7 million stock options outstanding as of
June 30, 2009 with a weighted average exercise price of $28.42
and a weighted average contractual term of 4.74 years. In
accordance with SFAS 123(R), compensation expense is recognized on
a straight-line basis over the employee’s vesting period or
to the employee’s retirement eligible date, if
earlier.</font></p>
</div>
4800000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 4</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The Company accounts for
goodwill and intangible assets under SFAS No. 142,
“Goodwill and Other Intangible Assets.” As such,
goodwill and other indefinitely-lived intangible assets are not
amortized, but are subject to annual impairment reviews, or more
frequent reviews if events or circumstances indicate there may be
impairment. During the third quarter of 2008, the Company performed
its required annual goodwill impairment test, which concluded there
was no impairment of goodwill.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The carrying amount of
goodwill was $25.5 billion as of June 30, 2009 and
December 31, 2008. The carrying amount of indefinitely-lived
assets was $6.4 billion as of June 30, 2009 and
December 31, 2008. Intangible assets with finite useful lives
are amortized over their estimated useful life.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Following is a summary of the
Company’s intangible assets as of the respective balance
sheet dates:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="58%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b><i>As of June 30,
2009</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b><i>As of December 31,
2008</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 34pt">
<font size="1" face="Times New Roman"><i>In millions</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Gross</b></font><br />
<font size="1" face="Times New Roman"><b>Carrying<br />
Amount</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Accumulated<br />
Amortization</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">Gross</font><br />
<font size="1" face="Times New Roman">Carrying<br />
Amount</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">Accumulated<br />
Amortization</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Trademarks (indefinitely-lived)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>6,398.0</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6,398.0</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Customer relationships and covenants not to
compete</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>4,770.5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(1,411.8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,748.8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,240.4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Favorable leases and other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>767.4</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(227.3</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">719.3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(179.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>11,935.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(1,639.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">11,866.1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,419.9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The amortization expense
related to finite-lived intangible assets for the second quarter
and six months ended June 30, 2009 was $107.3 million and
$214.8 million, respectively.</font></p>
</div>
9800200000
1632600000
2707000000
1.123
1.110
-7700000
-0.005
-0.005
1074400000
1325400000
-52100000
135600000
-743800000
255000000
2500000
46500000
-270000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 6</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Following are the components
of net interest expense:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="56%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b><i>Second Quarter Ended</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b><i>Six Months Ended</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 39pt">
<font size="1" face="Times New Roman"><i>(In
millions)</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>129.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">118.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>273.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">255.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(1.2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(3.8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(3.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10.1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Interest expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>127.9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">114.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>270.0</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">245.6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
</div>
284200000
-842300000
-608000000
1323200000
1624900000
1624900000
6823200000
2977000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 8</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company received proceeds
from sale-leaseback transactions totaling $503.1 million for the
six months ended June 30, 2009. This compares to $69.6 million
for the six months ended June 28, 2008. Under the
transactions, the properties are sold at fair value and the
resulting leases qualify and are accounted for as operating
leases.</font></p>
</div>
0
220700000
26300000
1091300000
25029400000
7150600000
0
3100000
1000000000
35109700000
503100000
6500000
0
91400000
1700000
1716100000
48265000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 3</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The Company currently
operates two business segments: Pharmacy Services and Retail
Pharmacy. The operating segments are businesses of the Company for
which separate financial information is available and for which
operating results are evaluated on a regular basis by executive
management in deciding how to allocate resources and in assessing
performance. The Company’s business segments offer different
products and services and require distinct technology and marketing
strategies.</font></p>
<p style=
"PADDING-BOTTOM: 3px; MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The Pharmacy Services
business provides a full range of prescription benefit management
(“PBM”) services including mail order pharmacy
services, specialty pharmacy services, plan design and
administration, formulary management and claims processing. The
Company’s customers are primarily employers, insurance
companies, unions, government employee groups, managed care
organizations, other sponsors of health benefit plans and
individuals throughout the United States. In addition, through the
Company’s SilverScript Insurance Company
(“SilverScript”) and Accendo Insurance Company
(“Accendo”) subsidiaries, the Company is a national
provider of drug benefits to eligible beneficiaries under the
Federal Government’s Medicare Part D program. Currently, the
pharmacy services business operates under the Caremark Pharmacy
Services <font size="1" face="Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>,
Caremark <font size="1" face="Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>,
CVS Caremark™, CarePlus CVS/pharmacy™, CarePlus™,
RxAmerica <font size="1" face="Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>,
AccordantCare™ and TheraCom <font size="1" face=
"Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>
names. As of June 30, 2009, the Pharmacy Services segment
operated 50 retail specialty pharmacy stores, 20 specialty mail
order pharmacies and 6 mail service pharmacies located in 25
states, Puerto Rico and the District of Columbia.</font></p>
<p style=
"PADDING-BOTTOM: 3px; MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">As of June 30, 2009, the
Retail Pharmacy Segment included 6,949 retail drugstores, of which
6,887 operated a pharmacy, the online retail website, CVS.com
<font size="1" face="Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>
and the retail health care clinics. The retail drugstores are
located in 41 states and the District of Columbia operating
primarily under the CVS/pharmacy <font size="1" face=
"Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>,
or Longs Drug <font size="1" face=
"Times New Roman"><sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>
names. As of June 30, 2009, the Company operated 561 retail
health care clinics in 25 states under the MinuteClinic<font size=
"1" face="Times New Roman"><sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">®</sup></font>
name, of which 546 were located within CVS/pharmacy stores. The
clinics utilize nationally recognized medical protocols to diagnose
and treat minor health conditions and are staffed by
board-certified nurse practitioners and physician
assistants.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">The Company evaluates 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.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Following is a reconciliation
of the Company’s business segments to the consolidated
condensed financial statements as of and for the respective
periods:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="57%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 34pt">
<font size="1" face="Times New Roman"><i>In millions</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Pharmacy<br />
Services</b></font><br />
<font size="1" face="Times New Roman"><b>Segment<sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(1)</sup></b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Retail<br />
Pharmacy<br />
Segment</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" nowrap="nowrap" align="middle"><font size="1" face=
"Times New Roman"><b>Intersegment<br />
Eliminations<sup style=
"POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline">(2)</sup></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Consolidated</b></font><br />
<font size="1" face="Times New Roman"><b>Totals</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><i>Second Quarter Ended</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman"><b>June 30, 2009:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Net revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>13,007.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>13,797.2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(1,934.0</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>24,871.1</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>921.1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>4,131.1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>5,052.2</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Operating profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>637.5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>962.3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,599.8</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">June 28, 2008:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Net revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">10,656.8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">11,770.8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,287.3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">21,140.3</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">849.9</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,523.3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,373.2</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Operating profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">614.1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">864.0</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,478.1</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><i>Six Months Ended</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman"><b>June 30, 2009:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Net revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>24,542.7</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>27,294.1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(3,571.8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>48,265.0</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,712.9</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>8,087.3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>9,800.2</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Operating profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,123.3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,853.7</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>2,977.0</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">June 28, 2008:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Net revenue</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">21,421.5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">23,616.4</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2,571.6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">42,466.3</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,637.9</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">7,028.3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8,666.2</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Operating profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,144.1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,704.1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,848.2</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total assets:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman"><b>June 30, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>33,100.2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>28,394.2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(458.4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>61,036.0</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">December 31, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">32,904.1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">28,404.5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(348.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">60,959.9</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Goodwill:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman"><b>June 30, 2009</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>18,818.5</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>6,665.3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>25,483.8</b></font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">December 31, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18,817.6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6,676.3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25,493.9</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"BORDER-BOTTOM: #000000 0.5pt solid; LINE-HEIGHT: 8px; MARGIN-TOP: 0px; WIDTH: 10%; MARGIN-BOTTOM: 2px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td valign="top" width="4%" align="left"><font size="2" face=
"Times New Roman">(1)</font></td>
<td valign="top" align="left"><font size="2" face=
"Times New Roman">Net revenues of the Pharmacy Services Segment
include approximately $1.77 billion and $1.54 billion of Retail
Co-payments for the second quarters ended June 30, 2009 and
June 28, 2008, respectively. Net revenues of the Pharmacy
Services Segment include approximately $3.44 billion and $3.20
billion of Retail Co-payments for the six months ended
June 30, 2009 and June 28, 2008,
respectively.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 4px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td valign="top" width="4%" align="left"><font size="2" face=
"Times New Roman">(2)</font></td>
<td valign="top" align="left"><font size="2" face=
"Times New Roman">Intersegment eliminations relate to intersegment
revenues that occur when a Pharmacy Services Segment customer uses
a Retail Pharmacy Segment store to purchase covered products. When
this occurs, both segments record the revenue on a standalone
basis.</font></td>
</tr>
</tbody>
</table>
</div>
74800000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face=
"Times New Roman" size="2"><b>Note 1</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The accompanying consolidated
condensed financial statements of CVS Caremark Corporation and its
wholly-owned subsidiaries (the “Company”) have been
prepared, in accordance with the rules and regulations of the
Securities and Exchange Commission, without audit. In accordance
with such rules and regulations, certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted, although the Company believes the disclosures
included herein are adequate to make the information presented not
misleading. These consolidated condensed financial statements
should be read in conjunction with the audited consolidated
financial statements and notes thereto, which are included in
Exhibit 13 to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2008 (the “2008 Form
10-K”).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted Emerging
Issues Task Force (“EITF”) Issue No. 06-4,
“Accounting for Deferred Compensation and Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements,” during the first quarter of 2008 (“EITF
06-4”). EITF 06-4 requires the application of the provisions
of Statement of Financial Accounting Standards (“SFAS”)
No. 106, “Employers’ Accounting for Postretirement
Benefits Other Than Pensions” (“SFAS 106”) (if,
in substance, a postretirement benefit plan exists), or Accounting
Principles Board Opinion No. 12 (if the arrangement is, in
substance, an individual deferred compensation contract) to
endorsement split-dollar life insurance arrangements. SFAS 106
requires the Company to recognize a liability for the discounted
value of the future premium benefits that the Company will incur
through the death of the underlying insured. The adoption of EITF
06-4 did not have a material impact on the Company’s
consolidated results of operations, financial position or cash
flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted EITF
No. 06-10, “Accounting for Collateral Assignment
Split-Dollar Life Insurance Agreements” (“EITF
06-10”), during the first quarter of 2008. EITF 06-10
provides guidance for determining a liability for the
postretirement benefit obligation as well as recognition and
measurement of the associated asset on the basis of the terms of
the collateral assignment agreement. The adoption of EITF 06-10 did
not have a material impact on the Company’s consolidated
results of operations, financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted SFAS
No. 141 (revised 2007), Business Combinations (“SFAS
141R”), which replaces SFAS 141, during the first quarter of
2009. SFAS 141R establishes the principles and requirements for how
an acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill acquired.
The Statement also establishes disclosure requirements that will
enable users to evaluate the nature and financial effects of
business combinations. As of June 30, 2009, the Company had
$167.0 million of unrecognized tax benefits (after considering the
federal benefit of state taxes) related to business combinations
that would have been treated as an adjustment to the purchase price
allocation if they had been recognized under SFAS 141. It is
possible that a significant portion of these benefits will be
recognized within the 2009 fiscal year and the recognition would
affect the Company’s effective income tax rate rather than
being treated as an adjustment to the purchase price allocation of
the acquiree.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted EITF
No. 08-3, “Accounting by Lessees for Nonrefundable
Maintenance Deposits” (“EITF 08-3”), during the
first quarter of 2009. Under EITF 08-3, lessees should account for
nonrefundable maintenance deposits as deposit assets if it is
probable that maintenance activities will occur and the deposit is
therefore realizable. Amounts on deposit that are not probable of
being used to fund future maintenance activities should be
expensed. The adoption of EITF 08-3 did not have a material effect
on the Company’s consolidated results of operations,
financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">SFAS No. 157,
“Fair Value Measurements” (“SFAS 157”)
establishes a framework for measuring fair value and expands
disclosures about fair value measurements. This Statement
establishes a fair value hierarchy about the assumptions used to
measure fair value and clarifies assumptions about risk and the
effect of a restriction on the sale or use of an asset. The
standard was effective for fiscal years beginning after
November 15, 2007. In February 2008, the FASB issued Staff
Position No. 157-2 (“FSP 157-2”), “Effective
Date of FASB Statement No. 157”. FSP 157-2 delays the
effective date of FAS 157 for all nonfinancial assets and
nonfinancial liabilities, except those that are recognized or
disclosed at fair value on a recurring basis (at least annually) to
fiscal years beginning after November 15, 2008, and interim
periods within those fiscal years. The adoption of FSP 157-2 did
not have a material effect on the Company’s consolidated
results of operations, financial position or cash flows. In October
2008, the FASB issued Staff Position No. 157-3 (“FSP
157-3”), “Determining the Fair Value of a Financial
Asset when the Market for That Asset Is Not Active.” FSP
157-3 clarifies the application of FAS 157 in a market that is not
active. The adoption of FSP 157-3 did not have a material effect on
the Company’s consolidated results of operations, financial
position or cash flows. In April 2009, the FASB issued Staff
Position No. 157-4 (“FSP 157-4”),
“Determining Fair Value When the Volume and Level of Activity
for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly.” FSP 157-4
provides additional guidance for estimating fair value in
accordance with SFAS 157 when the volume and level of activity for
the asset or liability have significantly decreased. FSP 157-4 also
includes guidance on identifying circumstances that indicate a
transaction is not orderly. The adoption of FSP 157-4 did not have
a material effect on the Company’s consolidated results of
operations, financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted FASB
Staff Position No. FAS 115-2 and 124-2,
<i>“</i>Recognition and Presentation of Other-Than-Temporary
Impairments<i>”</i> (“FSP FAS 115-2 and
124-2”), during the second quarter of 2009. FSP
FAS 115-2 and 124-2 amends the other-than-temporary impairment
guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in
the financial statements. FSP FAS 115-2 and 124-2 does not
amend existing recognition and measurement guidance related to
other-than-temporary impairments of equity securities. FSP
FAS 115-2 and 124-2 does not require disclosures for earlier
periods presented for comparative purposes at initial adoption. In
periods after initial adoption, FSP FAS 115-2 and 124-2
requires comparative disclosures only for periods ending after
initial adoption. The adoption of this FSP did not have a material
impact on the Company’s consolidated results of operations,
financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">The Company adopted FASB FSP
No. 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments (“FSP 107-1”), during the
second quarter of 2009. FSP 107-1 amends SFAS No. 107,
Disclosures about Fair Value of Financial Instruments, to require
disclosures about fair value of financial instruments in interim as
well as in annual financial statements. FSP 107-1 also amends
APB Opinion 28, “Interim Financial Reporting,” to
require those disclosures in all interim financial statements. The
adoption of this FSP did not have a material impact on the
Company’s consolidated results of operations, financial
position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In April 2009, the FASB
issued FASB Staff Position No. FAS 141(R)-1, “Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination
That Arise from Contingencies” (“FSP 141(R)-1”),
to amend SFAS 141 (revised 2007) “Business
Combinations.” FSP 141(R)-1 addresses the initial
recognition, measurement and subsequent accounting for assets and
liabilities arising from contingencies in a business combination,
and requires that such assets acquired or liabilities assumed be
initially recognized at fair value at the acquisition date if fair
value can be determined during the measurement period. If the
acquisition-date fair value cannot be determined, the asset
acquired or liability assumed arising from a contingency is
recognized only</font> <font face="Times New Roman" size=
"2">if certain criteria are met. This FSP also requires that a
systematic and rational basis for subsequently measuring and
accounting for the assets or liabilities be developed depending on
their nature. The Company does not anticipate that the adoption of
this statement will have a material impact on its consolidated
results of operations, financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In May 2009, the FASB issued
SFAS No. 165, “Subsequent Events” (“SFAS
165”). SFAS 165 establishes general standards of accounting
for and disclosure of events that occur after the balance sheet
date but before financial statements are issued. SFAS 165 is
effective for interim or annual financial periods ending after
June 15, 2009. In response to SFAS 165, management has
evaluated subsequent events through August 4, 2009, which is
the date that the Company’s consolidated financial statements
were filed. No material subsequent events have occurred since
June 30, 2009 that required recognition or disclosure in these
financial statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In June 2009, the Securities
and Exchange Commission Staff issued Staff Accounting Bulletin
No. 112 (“SAB 112”). SAB 112 amends or rescinds
portions of the SEC staff’s interpretive guidance included in
the Staff Accounting Bulletin Series in order to make the relevant
interpretive guidance consistent with SFAS 141-R and SFAS 160. The
Company does not anticipate that the adoption of this SAB will have
a material impact on its consolidated results of operations,
financial position or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In June 2009, the FASB issued
SFAS No. 168, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles- a
replacement of FASB Statement No. 162 (“SFAS
168”). On the effective date of this Statement, the
Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC
accounting literature not included in the Codification will become
non-authoritative. SFAS 168 is effective for financial statements
issued for interim and annual periods ending after
September 15, 2009. The Company does not anticipate that the
adoption of this SAB will have a material impact on its
consolidated results of operations, financial position or cash
flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">On December 23, 2008,
the Board of Directors of the Company approved a change in the
Company’s fiscal year end from the Saturday nearest
December 31 of each year to December 31 of each year to
better reflect the Company’s position in the health care,
rather than the retail, industry. The fiscal year change was
effective beginning with the fourth quarter of fiscal 2008. The
second quarter of 2009 and 2008 both include 91 days and the six
months ended June 30, 2009 and June 28, 2008 include 181
days and 182 days, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="Times New Roman" size="2">In the opinion of management,
the accompanying consolidated condensed financial statements
include all adjustments (consisting only of normal recurring
adjustments), which are necessary to present a fair statement of
the Company’s results for the interim periods presented.
Because of the influence of various factors on the Company’s
operations, including business combinations, certain holidays and
other seasonal influences, net earnings for any interim period may
not be comparable to the same interim period in previous years or
necessarily indicative of earnings for the full fiscal
year.</font></p>
</div>
1469900000
1453400000
31100000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 10</b></font></p>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Basic earnings per common
share is computed by dividing: (i) net earnings, after
deducting the after-tax Employee Stock Ownership Plan
(“ESOP”) preference dividends, by (ii) the
weighted average number of common shares outstanding during the
period (the “Basic Shares”).</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Diluted earnings per common
share is computed by dividing: (i) net earnings, after
accounting for the difference between the dividends on the ESOP
preference stock and common stock and after making adjustments for
the incentive compensation plans, by (ii) Basic Shares plus
the additional shares that would be issued assuming that all
dilutive stock awards are exercised and the ESOP preference stock
is converted into common stock. Options to purchase
41.4 million shares of common stock were outstanding but were
not included in the calculation of diluted earnings per share for
the second quarter and six months ended June 30, 2009,
respectively, because the options’ exercise prices were
greater than the average market price of the common shares and,
therefore, the effect would be antidilutive. Similarly, options to
purchase 13.2 million and 7.3 million shares of common
stock were outstanding but were not included in the calculation of
diluted earnings per share for the second quarter and six months
ended June 28, 2008, respectively.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Following is a reconciliation
of basic and diluted earnings per common share for the respective
periods:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="56%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b><i>Second Quarter Ended</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b><i>Six Months Ended</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap">
<p style="BORDER-BOTTOM: #000000 1px solid; WIDTH: 125pt">
<font size="1" face="Times New Roman"><i>(In millions, except per
share amounts)</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman">June 28, 2008</font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><b>Numerator for earnings per common share
calculation:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>889.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">823.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,632.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,572.0</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Preference dividends, net of income tax
benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(3.6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(7.1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations available to
common shareholders, basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>889.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">819.9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,632.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,564.9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss from discontinued operations, net of income
tax benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(2.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(48.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(7.7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(48.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Net earnings available to common shareholders,
basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>886.5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">771.2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,624.9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,516.2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>889.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">823.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,632.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,572.0</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Dilutive earnings adjustments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1.0</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1.9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations available to
common shareholders, diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>889.1</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">822.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,632.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,570.1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss from discontinued operations, net of income
tax benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(2.6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(48.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(7.7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(48.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Net earnings available to common shareholders,
diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>886.5</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">773.8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,624.9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,521.4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><b>Denominator for earnings per common share
calculation:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Weighted average common shares, basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,456.9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,431.8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,453.4</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,430.8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Effect of dilutive securities:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Restricted stock units</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>4.7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4.1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>4.7</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4.1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">ESOP preference stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17.2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>2.8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17.4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Stock options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>10.2</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15.6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>9.0</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16.2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Weighted average common shares,
diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,471.8</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,468.7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1,469.9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,468.5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><b>Basic earnings per common
share:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>0.61</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.57</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1.123</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.09</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss from discontinued operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(0.005</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Net earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>0.61</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.54</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1.118</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.06</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><b>Diluted earnings per common
share:</b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings from continuing operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>0.60</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.56</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1.110</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.07</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss from discontinued operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>—  </b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b> </b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>(0.005</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.03</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Net earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>0.60</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.53</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"><b>$</b></font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"><b>1.105</b></font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.04</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">When computing diluted
earnings per common share, the Company assumes that the ESOP
preference stock is converted into common stock and all dilutive
stock awards are exercised. After the assumed ESOP preference stock
conversion, the ESOP trust would hold common stock rather than ESOP
preference stock and would receive common stock dividends ($0.25800
annually per share in 2008) rather than ESOP preference stock
dividends ($3.90 per share in 2008). Since the ESOP trust uses the
dividends it receives to service its debt, the Company would have
to increase its contribution to the ESOP trust to compensate it for
the lower dividends. This additional contribution would reduce the
Company’s net earnings, which in turn, would reduce the
amounts that would have to be accrued under the Company’s
incentive compensation plans.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font size="2" face="Times New Roman">Pursuant to the
Company’s 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 February 24,
2009 (the “Redemption Date”). Under the Charter, at any
time prior to the Redemption Date, the trustee is afforded the
right to convert the ESOP preference stock into shares of the
Company’s 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 and
all outstanding shares of ESOP preference stock were converted into
common stock.</font></p>
</div>
0000064803
2009-01-01
2009-06-30
0000064803
2007-12-30
2008-06-28
0000064803
2009-04-01
2009-06-30
0000064803
2008-03-30
2008-06-28
0000064803
2008-12-31
0000064803
2007-12-29
0000064803
2009-07-30
0000064803
2009-06-30
0000064803
2008-06-28
0000064803
2008-06-27
iso4217:USD
iso4217:USD
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