CVS Caremark Corporation (CVS)

Revenues

Net revenues for the third quarter of 2009, increased $3.8 billion to $24.6 billion, up from $20.9 billion during the third quarter of 2008. Net revenues were positively impacted by one more reporting day during the third quarter of 2009 compared to the third quarter of 2008.

Revenues in the pharmacy services segment increased 23.4% to $13.0 billion in the third quarter of 2009. Adjusting the growth rate for the impact of new generics, net revenues would have grown 27.2% in the pharmacy services segment. Pharmacy network claims processed during the third quarter of 2009 increased 9.0% to 146.5 million, compared to 134.4 million in the prior year period. This increase was primarily due to the addition of RxAmerica claims and new client starts. This was offset by a reduction in claims due to the termination of two large health plan clients effective January 1, 2009. Mail choice claims processed during the third quarter of 2009 increased 11.4% to 16.4 million compared to 14.7 million in the prior year period, primarily as a result of net new client starts.

Revenues in the retail pharmacy segment increased 17.9% to $13.6 billion in the third quarter of 2009. Same store sales (sales from stores open more than one year based on a comparable 90-day reporting period) increased 5.7% over the prior year period. Pharmacy same store sales rose 8.0% and were negatively impacted by approximately 380 basis points due to recent generic introductions. Pharmacy same store sales were positively impacted by approximately 250 basis points due to Maintenance Choice™. Front store same store sales increased 0.8%.

The generic dispensing rate in our pharmacy services segment increased 320 basis points to a best-in-class 68.3% in the third quarter. At the same time, the generic dispensing rate in our retail segment increased approximately 210 basis points to 70.1%.

Revenues:

Net revenues for the second quarter of 2009, increased $3.7 billion to $24.9 billion, up from $21.1 billion during the second quarter of 2008.

Revenues in the pharmacy services segment increased 22.1% to $13.0 billion in the second quarter of 2009. Adjusting the growth rate for the impact of new generics, net revenues would have grown 26.2% in the pharmacy services segment. During the second quarter of 2009, the Company converted a number of RxAmerica® retail pharmacy network contracts, which resulted in those contracts being accounted for using the gross method which increased net revenues. Retail network claims processed during the second quarter of 2009 increased 8.8% to 148.3 million, compared to 136.3 million in the prior year period. This increase was primarily due to the addition of RxAmerica claims and claims that were filled at retail pharmacies under the Maintenance Choice™ program. This was offset by a reduction in claims due to the termination of two large health plan clients effective January 1, 2009. Mail service claims processed during the second quarter of 2009 increased 5.3% to 15.8 million compared to 15.0 million in the prior year period, primarily as a result of net new client starts offset by a shift of participants toward the Company’s Maintenance Choice program.

Revenues in the retail pharmacy segment increased 17.2% to $13.8 billion in the second quarter of 2009. Same store sales (sales from stores open more than one year) increased 6.1% over the prior year period. Pharmacy same store sales rose 7.5% and were negatively impacted by approximately 478 basis points due to recent generic introductions, while front store same store sales increased 3.0%. Front store revenues were positively impacted by a later Easter (April 12^th this year versus March 23^rd last year), which shifted more holiday sales into the second quarter of 2009. The Company estimates the Easter shift had a positive impact of approximately 135 basis points on front store same store sales for the second quarter of 2009 and approximately 45 basis points on total same store sales. Front store revenues were also positively impacted by approximately 85 basis points as a result of product cost increases in advance of the federal cigarette excise tax increase.

The generic dispensing rate in our pharmacy services segment increased 330 basis points to a best-in-class 67.8% in the second quarter. At the same time, the generic dispensing rate in our retail segment increased approximately 260 basis points to 69.6%.

Revenues:

Net revenues for the first quarter of 2009, increased $2.1 billion to $23.4 billion, up from $21.3 billion during the first quarter of 2008. Net revenues were negatively impacted by one less reporting day during the first quarter of 2009 compared to the first quarter of 2008. Adjusting for the impact of one less reporting day, net revenues would have increased approximately $343 million, or 11.3%.

Revenues in the pharmacy services segment increased 7.2% to $11.5 billion in the first quarter of 2009. Adjusting the growth rate for the impact of new generics, net revenues would have grown 11.4% in the pharmacy services segment. Retail network claims processed during the first quarter of 2009 increased 4.4% to 147.7 million, compared to 141.5 million in the prior year period. This increase was primarily due to the addition of RxAmerica^® claims and claims that were filled at retail pharmacies under the Maintenance Choice™ program. This was offset by a reduction in claims due to the termination of two large health plan clients effective January 1, 2009 and having one less day in the first quarter of 2009 compared to the first quarter of 2008. Mail service claims processed during the first quarter of 2009 increased 3.0% to 15.7 million compared to 15.3 million in the prior year period primarily as a result of net new client starts offset by a shift of participants towards the Company’s Maintenance Choice program.

Revenues in the retail pharmacy segment increased 13.9% to $13.5 billion in the first quarter of 2009. Same store sales (sales from stores open more than one year based on a comparable 90-day reporting period) increased 3.3% over the prior year period. Pharmacy same store sales rose 4.6% and were negatively impacted by approximately 310 basis points due to recent generic introductions, while front-end same store sales increased 0.7%. Same store sales for the first quarter of 2009 were negatively impacted by a later Easter (April 12^th this year versus March 23^rd last year), which shifted more holiday sales into the second quarter of 2009. The Company estimates the Easter shift had a negative impact of approximately 115 basis points on front-end same store sales for the first quarter of 2009 and approximately 40 basis points on total same store sales.

The generic dispensing rate in our PBM segment increased 360 basis points to a best-in-class 67.7% in the first quarter. At the same time, the generic dispensing rate in our retail segment increased 260 basis points to 69.2%.

Revenues:

Net revenues for the fourth quarter ended December 31, 2008, increased $2.2 billion to $24.1 billion, up from $21.9 billion during the fourth quarter ended December 29, 2007. For the full year, total revenue increased 14.6% to a record $87.5 billion, compared to $76.3 billion in 2007.

Revenues in the pharmacy services segment increased 1.5% to $11.8 billion in the fourth quarter ended December 31, 2008. Adjusting the growth rate for the impact of new generics, net revenues would have grown 7.8% in the pharmacy services segment. Retail network claims processed during the fourth quarter ended December 31, 2008, increased 18.0% to 160.3 million, compared to 135.8 million in the prior year period. Retail network claims processed increased during the fourth quarter ended December 31, 2008 primarily due to the acquisition of RxAmerica, organic growth in our existing business, increased enrollment in our Medicare Part D business, the inclusion of four additional days in fiscal 2008 and new client starts. Mail service claims processed during the fourth quarter ended December 31, 2008 decreased 14.5% to 15.9 million compared to 18.6 million in the prior year period primarily due to the termination of the Federal Employees Health Benefit Plan mail contract at the end of 2007. For the full year, total revenue in the pharmacy services segment increased 25.3% to $43.8 billion, compared to $34.9 billion in 2007.

Revenues in the retail drugstore segment increased 18.8% to $13.8 billion in the fourth quarter ended December 31, 2008, while same store sales (sales from stores open more than one year) rose 3.6% over the prior year period. Pharmacy same store sales rose 4.5% and were negatively impacted by approximately 260 basis points due to recent generic introductions, while front-end same store sales increased 1.8%. Same store sales in the retail drugstore segment increased 4.5% for the year, while pharmacy same store sales increased 4.8% and front-end same store sales increased 3.6%.

Revenues:

Net revenues for the third quarter ended September 27, 2008, increased $368.2 million to $20.9 billion, up from $20.5 billion during the third quarter ended September 29, 2007.

Revenues in the retail drugstore segment increased 5.3% to $11.5 billion in the third quarter, while same store sales (sales from stores open more than one year) in the Company’s CVS/pharmacy division for the third quarter rose 3.7% over the prior year period. Pharmacy same store sales rose 3.8% and were negatively impacted by approximately 280 basis points due to recent generic introductions, while front-end same store sales increased 3.3%.

Revenues in the pharmacy services segment decreased 0.9% to $10.6 billion in the third quarter ended September 27, 2008. Retail network claims processed during the third quarter ended September 27, 2008, increased 2.7% to 134.4 million compared to 130.9 million in the prior year period. The increase in retail network claims was driven primarily by increased enrollment in the Medicare Part D business. Mail service claims processed during the third quarter ended September 27, 2008 decreased 19.6% to 14.7 million compared to 18.3 million in the prior year period primarily due to the termination of the Federal Employees Health Benefit Plan mail contract effective December 31, 2007.

Revenues:

Net revenues for the second quarter ended June 28, 2008, increased $437.0 million to $21.1 billion, up from $20.7 billion during the second quarter ended June 30, 2007.

Revenues in the retail drugstore segment increased 4.6% to $11.8 billion in the second quarter, while same store sales (sales from stores open more than one year) in the Company’s CVS/pharmacy division for the second quarter rose 3.1% over the prior year period. Pharmacy same store sales rose 3.7% and were negatively impacted by approximately 280 basis points due to recent generic introductions, while front-end same store sales increased 1.8%. Same store sales for the second quarter were negatively impacted by an earlier Easter, which shifted more holiday sales into March. The Company estimates the Easter shift had a negative impact of approximately 110 basis points on front-end same store sales for the quarter ended June 28, 2008.

Revenues in the pharmacy services segment increased 1.0% to $10.7 billion in the second quarter ended June 28, 2008. Retail network claims processed during the second quarter ended June 28, 2008, increased 2.7% to 136.3 million compared to 132.7 million in the prior year period. The increase in retail network claims was driven primarily by increased enrollment in the Medicare Part D business. Mail service claims processed during the second quarter ended June 28, 2008 decreased 18.9% to 15.0 million compared to 18.5 million in the prior year period primarily due to the termination of the Federal Employees Health Benefit Plan mail contract effective December 31, 2007.