CVS » Topics » Unaudited Pro Forma Combined Statements of Operations
This excerpt taken from the CVS 8-K filed Aug 8, 2006.
Unaudited Pro Forma Combined Statements of Operations
Represents the adjustments required to cost of goods sold, buying and warehousing costs to eliminate the historical Standalone Drug Business LIFO charges and convert the Standalone
Drug Business from the LIFO method to the FIFO method of accounting for inventories used by CVS, offset, in part, by the effect of pro forma adjustments to inventories discussed above.
Represents the adjustments required to record estimated depreciation and amortization on property, equipment and intangible assets over their respective estimated useful lives.
Property and equipment is depreciated over the remaining useful life of the asset, or when applicable, the term of the lease, whichever is shorter. Favorable leases are amortized over the remaining term of the respective lease up to 10 years.
Intangible assets are amortized over useful lives of up to 10 years.
Represents the adjustments required to record interest expense on the short-term and long-term debt used to finance the acquisition. The weighted average interest rate is 5.53%.
Represents the adjustments required to conform the pro forma combined income tax provision to the estimated effective income tax rate of the combined company.
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