CVS Caremark Corporation (CVS)

Environmental Reserves

The Business records reserves for loss contingencies, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies,” when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Predicting the outcomes and estimating related costs and exposures involve substantial uncertainties that could cause actual costs to vary materially from estimates. Historical loss contingencies assumed by CVS relate entirely to environmental liabilities specifically identifiable to the standalone drug stores acquired by CVS.

Environmental Reserves

The Business records reserves for loss contingencies, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies,” when the information available indicates that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Predicting the outcomes and estimating related costs and exposures involve substantial uncertainties that could cause actual costs to vary materially from estimates. Historical loss contingencies assumed by CVS relate entirely to environmental liabilities specifically identifiable to the standalone drug stores acquired by CVS.