Table of Contents

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 


 

FORM 11-K

 


 

x                ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2011

 

OR

 

o                   TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from          to          

 

Commission File Number:  001-01011

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

(Full title of the Plan)

 


 

CVS CAREMARK CORPORATION

(Name of issuer of the securities held pursuant to the plan)

 

One CVS Drive

Woonsocket, RI 02895

(Address of principal executive offices of issuer)

 

 

 



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

YEARS ENDED DECEMBER 31, 2011 AND 2010

 

CONTENTS

 

 

 

Page

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

2

 

 

 

FINANCIAL STATEMENTS:

 

 

 

 

 

Statements of Net Assets Available for Benefits

 

3

 

 

 

Statements of Changes in Net Assets Available for Benefits

 

4

 

 

 

Notes to Financial Statements

 

5

 

 

 

SUPPLEMENTARY SCHEDULE:

 

 

 

 

 

Schedule H, Line 4i—Schedule of Assets (Held at End of Year)

 

19

 

 

 

SIGNATURE

 

32

 

 

 

EXHIBIT INDEX

 

33

 

 

 

Exhibit 23.1  Consent of Ernst & Young LLP

 

34

 

1



Table of Contents

 

Report of Independent Registered Public Accounting Firm

 

The Administrative Subcommittee of

The 401(k) Plan and the Employee Stock Ownership

Plan of CVS Caremark Corporation and Affiliated Companies

 

We have audited the accompanying statements of net assets available for benefits of The 401(k) Plan and the Employee Stock Ownership Plan of CVS Caremark Corporation and Affiliated Companies (the “Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2011 and 2010, and the changes in its net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.

 

Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2011, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information is the responsibility of the Plan’s management. The information has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

 

/s/ Ernst & Young LLP

 

Boston, Massachusetts

June 22, 2012

 

2



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Statements of Net Assets Available for Benefits

December 31, 2011 and 2010

 

 

 

2011

 

2010

 

Assets:

 

 

 

 

 

Investments, at fair value (Note 3):

 

 

 

 

 

Cash

 

$

6,975

 

$

 9,742,342

 

Common collective trust funds (Note 2 (d))

 

913,306,344

 

788,193,027

 

Guaranteed investment contracts (Note 2 (d))

 

242,024,341

 

308,871,889

 

Mutual funds (Note 2 (d))

 

2,265,957,471

 

2,160,422,545

 

Common stock (Note 2 (d))

 

1,282,542,340

 

1,319,512,127

 

Total investments

 

4,703,837,471

 

4,586,741,930

 

Receivables:

 

 

 

 

 

Interest and dividends (Note 2 (i))

 

2,218,050

 

2,080,838

 

Employer contributions (Note 1 (c))

 

5,420,068

 

43,031,787

 

Employee contributions (Note 1 (c))

 

 

6,364,320

 

Notes receivable from participants (Note 4)

 

140,201,458

 

137,887,485

 

Total receivables

 

147,839,576

 

189,364,430

 

 

 

 

 

 

 

Total assets at fair value

 

4,851,677,047

 

4,776,106,360

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accrued expenses and other liabilities

 

5,194,428

 

406,405

 

 

 

 

 

 

 

Total liabilities

 

5,194,428

 

406,405

 

 

 

 

 

 

 

Net assets available for benefits at fair value

 

4,846,482,619

 

4,775,699,955

 

 

 

 

 

 

 

Adjustments from fair value to contract value for fully benefit-responsive investment contracts

 

(17,196,233

)

(20,933,427

)

 

 

 

 

 

 

Net assets available for benefits

 

$

4,829,286,386

 

$

4,754,766,528

 

 

See accompanying notes to financial statements.

 

3



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Statements of Changes in Net Assets Available for Benefits

Years Ended December 31, 2011 and 2010

 

 

 

2011

 

2010

 

Investment activity:

 

 

 

 

 

Interest and dividend income (Note 2 (i))

 

$

98,722,028

 

$

101,303,645

 

Transfer into (out of) plan assets (Note 1 (a))

 

38,590

 

(2,721,793

)

Realized and unrealized gains (losses) (Notes 3 and 5)

 

(17,793,408

)

353,061,073

 

Total investment activity

 

80,967,210

 

451,642,925

 

 

 

 

 

 

 

Contributions:

 

 

 

 

 

Employer contributions (Note 1 (c))

 

155,561,178

 

155,731,506

 

Employee contributions (Note 1 (c))

 

257,695,309

 

259,633,846

 

Rollovers

 

8,344,706

 

12,437,643

 

Total contributions

 

421,601,193

 

427,802,995

 

 

 

 

 

 

 

Deductions:

 

 

 

 

 

Benefits paid to participants (Notes 1 (f) and 2 (e))

 

415,032,107

 

307,443,630

 

Administrative expenses (Note 1 (g))

 

13,016,438

 

11,960,636

 

Total deductions

 

428,048,545

 

319,404,266

 

 

 

 

 

 

 

Net increase in net assets for the year

 

74,519,858

 

560,041,654

 

 

 

 

 

 

 

Net assets beginning of the year

 

4,754,766,528

 

4,194,724,874

 

 

 

 

 

 

 

Net assets end of the year

 

$

4,829,286,386

 

$

4,754,766,528

 

 

See accompanying notes to financial statements.

 

4


 


Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements

Years Ended December 31, 2011 and 2010

 

Note 1 - Plan Description

 

The following description of the 401(k) Plan and the Employee Stock Ownership Plan (the “ESOP”) of CVS Caremark Corporation and Affiliated Companies (the “Plan”) provides only general information. Participants should refer to the Plan documents for a more complete description of the Plan’s provisions.

 

(a)                  Background

 

The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. The general administration of the Plan and the responsibility for carrying out the provisions of the Plan are maintained by a committee (the “Benefit Plans Committee”) of not less than three persons appointed by the Board of Directors of CVS Caremark Corporation (“CVS Caremark” or the “Company”), the sponsor of the Plan. In accordance with the provisions of the Plan, the Benefit Plans Committee has appointed a plan administrator (the “Administrator”) and a trustee (the “Trustee”). The Administrator maintains participant account records and instructs the Trustee to execute transactions such as benefit payments to participants. The Trustee holds the assets of the Plan and executes transactions at the direction of the Benefit Plans Committee and the Administrator. Effective January 2010, the Benefits Plans Committee further named an Administrative Subcommittee and an Investment Subcommittee and delegated certain fiduciary duties to each of the Committees.

 

The Plan was established as of January 1, 1989.

 

Effective April 10, 2002, the 401(k) Profit Sharing Plan of CVS Corporation (the “401(k) Plan”) was merged into the Plan, and the plan name was changed from CVS Corporation and Subsidiaries Employee Stock Ownership Plan to The 401(k) Plan and the Employee Stock Ownership Plan of CVS Corporation and Affiliated Companies. All assets and liabilities under the 401(k) Plan as of April 10, 2002 were transferred to the Plan and, as of that date, benefits for the participants and beneficiaries of the 401(k) Plan have been paid from the Plan.

 

Effective March 22, 2007, pursuant to the Agreement and Plan of Merger dated as of November 1, 2006, as amended, Caremark Rx, Inc. (“Caremark”) was merged into a newly formed subsidiary of CVS Caremark Corporation (“CVS”) with the CVS subsidiary continuing as the surviving entity (the “Caremark Merger”). Subsequently, the name of this plan was changed from The 401(k) Plan and the Employee Stock Ownership Plan of CVS Corporation and Affiliated Companies to The 401(k) Plan and the Employee Stock Ownership Plan of CVS Caremark Corporation and Affiliated Companies. The Plan has not been amended to allow for participation by Caremark employees and as such, the financial statements herein do not reflect any consolidation of benefits as provided to employees by Caremark at the time of the Caremark Merger.

 

5



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Effective January 1, 2010, CVS Caremark developed the Intercompany Voluntary Transfer Program, allowing employees who experienced a bona fide transfer within the Company’s control group the opportunity to voluntarily transfer their 401(k) assets from their prior business unit’s plan to the 401(k) plan sponsored by their current business unit. This offering is made twice a year to eligible employees. In 2011, this resulted in a transfer of assets out of the Plan of $660,327 and transfer of assets into the Plan of $698,917, for a net effect of $38,590 while in 2010, this resulted in a transfer of assets out of the Plan of $3,181,719 and transfer of assets into the Plan of $459,926, for a net effect of ($2,721,793).

 

(b)                      Eligibility

 

Employees are eligible to participate in the Plan upon attainment of age 21 and on the earliest of:

 

·                The first payroll period of the first month after completion of 90 continuous days of service as a full-time employee;

 

·                Completion of 12 months of service beginning on the employee’s hire date with at least 1,000 hours worked; or

 

·                Completion of at least 1,000 hours of service in the course of one calendar year.

 

Employees referred to above are defined as regular employees of the Company other than:

 

·      A nonresident alien receiving no United States (“U.S.”) earned income from the Company;

 

·                 An individual covered under a collective bargaining agreement (unless the agreement provides for membership);

 

·                A leased employee (as defined in the Internal Revenue Code);

 

·                 A temporary employee (as determined by the Company); or

 

·                 An independent contractor or consultant (as defined by the Company).

 

(c)                       Contributions

 

Participants may elect to have the Company contribute to their accounts from 1% to 85% of the compensation that would otherwise be due to them, in multiples of 1%, pursuant to a salary reduction agreement. Each participant’s total elective deferrals for any calendar year may not exceed 85% of annual compensation or the maximum allowed by the Internal Revenue Code (the “Code”); whichever is less, as specified in the Plan document. The maximum elective deferral allowed by the Code was $16,500 for 2011 and 2010.

 

On a quarterly basis, the Company matches in cash 100% up to 5% of eligible pre-tax compensation contributed.

 

All employees at least age 50 that contribute the maximum amount to the Plan are permitted to make additional pre-tax catch-up contributions. Catch-up contributions may be made up to an additional $5,500 for 2011 and 2010.

 

6



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

(d)                      Participant’s Account

 

Each participant’s account is credited with an allocable share of their selected Plan’s investments and any unrealized appreciation or depreciation and interest and dividends of those investments.

 

(e)                       Vesting

 

Participants are 100% vested in participant and Company matching contributions.

 

Participants whose account balances have been transferred into the Plan from other defined contribution plans maintain at least the degree of vesting in the account they had at the time of the transfer. Notwithstanding the foregoing, participants are fully vested in, and have a nonforfeitable right to (1) their accounts upon death or disability, and (2) any elective deferrals described in Note 1(c).

 

(f)                         Payment of Benefits

 

Upon termination of service by the participant, the Administrator will direct the Trustee to pay to the participant their benefit under one or more options, such as a single lump-sum, or in equal annual installments over a period not exceeding fifteen years.

 

(g)                      Administrative Expenses

 

Administrative expenses specifically attributable to the Plan and not covered by forfeitures were funded by the Plan for 2011 and 2010. Trustee’s fees were paid by the Plan for 2011 and 2010.

 

(h)                      Forfeitures

 

On a participant’s termination date, any unvested portion of their account is forfeited at the earlier of distribution or five years from the date of termination. If a former participant resumes employment and eligibility in the Plan within five years of termination, any amounts previously forfeited are restored to the participant’s account, but remain subject to the vesting provisions of the Plan. Forfeitures during any plan year are applied as follows: (i) to restore amounts previously forfeited by participants but required to be reinstated upon resumption of employment; (ii) to pay administrative expenses of the Plan; or (iii) to reduce future CVS Caremark contributions. If forfeitures for any plan year are insufficient to restore the required forfeitures, CVS Caremark shall contribute the balance required for that purpose.

 

Cash forfeitures for 2011 and 2010 were $239,693 and $288,931, respectively. Cash forfeitures restored to participants upon resumption of employment for 2011 and 2010 were $8,423 and $1,720, respectively. The remainder of the forfeitures for each year was applied to the administrative expenses of the plan and to reduce the CVS Caremark contribution.

 

7



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

(i)                         Investment Options

 

Upon enrollment in the Plan, a participant elects to direct contributions or investment balances to the investment options offered by the plan. Participants may modify investment elections daily thereafter. The Plan’s investments are comprised of guaranteed insurance contracts, securities of CVS Caremark and securities of unaffiliated issuers. The securities in unaffiliated issuers include marketable mutual funds and separately managed funds, comprised of marketable securities. The following is a brief explanation of each fund’s investment objectives:

 

Aggressive Lifestyle Fund

 

The fund invests in other Future Fund investment options as follows: Small Cap Growth, Small Cap Value, International Equity, Large Cap Growth, Core Equity, Growth & Income, Diversified Bond, and U.S. Bond Index Fund. This fund has the following composite benchmarks: Russell 1000 Index, Barclays Capital Aggregate Bond Index, S&P 500 Index, MSCI EAFE Index, and the Russell 2000 Index.

 

Conservative Lifestyle Fund

 

The fund invests in the following Future Fund investment options: Small Cap Growth, Small Cap Value, International Equity, Large Cap Growth, Core Equity, Growth & Income, Diversified Bond, U.S. Bond Index Fund, and Stable Value Fund. This fund has the following composite benchmarks: Russell 1000 Index, Barclays Capital Aggregate Bond Index, S&P 500 Index, 3-Year U.S. Treasury Index, Russell 2000 Index, and the MSCI EAFE Index.

 

Core Equity Fund

 

The Institutional Vanguard Index Fund seeks to replicate the total return of the Standard & Poors (“S&P”) 500 Composite Stock Index (“S&P 500”) by investing in stocks that make up the index. The S&P 500 Index consists mainly of large companies and represents approximately 75% of the U.S. stock market value.

 

CVS Caremark Common Stock Fund

 

CVS Caremark Common Stock Fund seeks long-term growth and dividend income by purchasing shares of CVS Caremark common stock.

 

Diversified Bond Fund

 

The PIMCO Total Return Institutional Class Fund is a core bond fund that seeks to outperform the Barclays Capital Aggregate Bond Index. Investments may include government and corporate debt securities, mortgage and other asset-backed securities, money market instruments, and derivatives.

 

Global Equity Fund

 

The American Funds-New Perspective Fund seeks long-term growth of capital by investing in a variety of foreign and domestic companies. The fund tries to outperform the MSCI World Index, which measures the performance of U.S. and international stock markets.

 

Growth and Income Fund

 

This fund is managed by J&W Seligman, Mellon Capital Management and Barrow, Hanley, Mewhinney & Strauss. This blended fund seeks long-term growth of capital and dividend income through participation in the stock market. This fund invests primarily in the common stock of U.S.-based, well-established, medium- to large-sized companies. This blended fund is benchmarked by the Russell 1000 Value Index (“RVI”).

 

8



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Inflation-Protected Fund

 

The Vanguard Inflation-Protected Securities Fund Admiral Shares seeks to provide modest income and protection from inflation. This fund invests primarily in high-quality inflation-indexed bonds issued by the U.S. government and corporations.

 

International Equity Fund

 

The Templeton Foreign Equity Series-Primary Shares Fund seeks long-term growth of capital through participation in stock markets outside the United States. The fund invests mainly in the common stock of companies based in more developed countries, but may also include investments in developing countries. It is benchmarked by the Morgan Stanley Capital International (“MSCI”) Europe, Australasia, and Far East (“EAFE”) Index.

 

International Equity Index Fund

 

The Vanguard Developed Markets Index Fund seeks to replicate the total return of the MSCI EAFE Index by investing in the institutional shares of two other Vanguard funds — the Vanguard European Stock Index Fund and Vanguard Pacific Stock Index Fund. These indexes include common stock of approximately 1,140 companies located in Europe, Australia, Asia and the Far East.

 

Large Cap Growth Fund

 

This fund seeks long-term growth of capital through participation in the stock market. Investment advisory services are provided by Columbus Circle. The fund invests primarily in the common stock of established large companies that are based in the United States and that represent industries expected to out-perform the stock market as a whole. This fund is benchmarked by the Russell 1000 Growth Index and the S&P 500.

 

Mid Cap Index Fund

 

The Vanguard Mid Cap Index Fund seeks to replicate the total return of the MSCI US Mid Cap 450 Index by investing in the stocks that make up the index. The MSCI US Mid Cap 450 Index consists of medium-size U.S. companies.

 

Moderate Lifestyle Fund

 

The fund invests in other Future Fund investment options as follows: Small Cap Growth, Small Cap Value, International Equity, Large Cap Growth, Core Equity, Growth & Income, Diversified Bond, U.S. Bond Index Fund, and Stable Value Fund. The composite benchmark has been determined as follows: Russell 1000 Index, Barclays Capital Aggregate Bond Index, S&P 500 Index, MSCI EAFE Index, Russell 2000 Index, and the 3-Year U.S. Treasury Index.

 

Small Cap Growth Fund

 

The Vanguard® Explorer™ Fund Admiral™ Shares seeks long-term growth of capital and dividend income through participation in the stock market. The fund invests primarily in stocks of relatively small companies, making it a high-risk investment with potential for large rewards. This fund is benchmarked by the Russell 2500 Growth Index.

 

Small Cap Index Fund

 

The Vanguard Small Cap Index Fund seeks to replicate the total return of the MSCI US Small Cap 1750 Index by investing in the stocks that make up the index. The MSCI US Small Cap 1750 Index consists of smaller U.S. companies.

 

Small Cap Value Fund

 

This fund is managed by Dimensional Fund Advisors and Lord, Abbett & Co. This blended fund seeks long-term growth by investing primarily in stocks of small to medium-sized companies.

 

9



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Stable Value Fund

 

This fund is managed by Galliard Capital Management and seeks to preserve capital while generating a steady rate of return higher than money market funds provide. The fund’s investments consist of cash, highly rated insurance company contracts (guaranteed investment contracts (“GICs”)), other bond investments, and a commingled fund managed by Galliard Capital Management that is further diversified by manager and security type.

 

U.S. Bond Index Fund

 

The Vanguard Total Bond Market Index Fund Institutional Shares seeks to replicate the total return of Barclays Capital U.S. Aggregate Float Adjusted Index by investing in bonds that make up that index.

 

Note 2 - Summary of Significant Accounting Policies

 

(a)                     Basis of Presentation

 

The net assets available for 401(k) Plan and ESOP benefits, on an accrual basis, according to the accounts of employees with rights to allocated stock are reflected in the Statements of Net Assets Available for Benefits as of December 31, 2011 and 2010.

 

(b)                      Recently Adopted Accounting Pronouncements

 

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements, (“ASU 2010-06”). ASU 2010-06 expanded the required disclosures about fair value measurements by requiring (i) separate disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements along with the reasons for such transfers, (ii) information about purchases, sales, issuances and settlements to be presented separately in the reconciliation for Level 3 fair value measurements, (iii) expanded fair value measurement disclosures for each class of assets and liabilities, and (iv) disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3. ASU 2010-06 was effective for annual reporting periods beginning after December 15, 2009 except for (ii) above which was effective for fiscal years beginning after December 15, 2010. The adoption of ASU 2010-06 did not have a material impact on the Statement of Net Assets Available for Benefits or the Statement of Changes in Net Assets Available for Benefits.

 

(c)                       Recent Accounting Pronouncement Not Yet Effective

 

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs, (“ASU 2011-04”). ASU 2011-04 amended Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, (“ASC 820”) to converge the fair value measurement guidance in U.S. Generally Accepted Accounting Principles (“GAAP”) and International Financial Reporting Standards (“IFRSs”). Some of the amendments clarify the application of existing fair value measurement requirements, while other amendments change a particular principle in ASC 820. In addition, ASU 2011-04 requires additional fair value disclosures. The amendments are to be applied prospectively and are effective for annual periods beginning after December 15, 2011. Plan management is currently evaluating the effect the provisions of ASU 2011-04 will have on the Plan’s financial statements.

 

10



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

(d)                      Investment Valuation

 

The value of the investments held at December 31, 2011 and 2010 is based on their fair value. Shares of mutual funds are valued at quoted market prices, which represent the net asset values of shares held by the Plan at year end. CVS Caremark common stock and common stock owned directly in the Small Cap Value Fund, Growth and Income Fund, and the Large Cap Growth Fund, separately managed funds, are valued based upon quoted market prices.

 

The fair value of the Plan’s common collective trust funds represents the net asset value of the underlying investments.

 

The Plan invests in fully benefit-responsive GICs. These investment contracts are recorded at fair value; however, since these contracts are fully benefit-responsive, an adjustment is reflected in the Statements of Net Assets Available for Benefits to present these investments at contract value. Contract value is the relevant measurement attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The contract value of the fully benefit-responsive investment contracts represents contributions plus earnings, less participant withdrawals and administrative expenses.

 

The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.

 

(e)                       Benefits Paid

 

Distribution of benefits are recorded when paid.

 

(f)                         Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.

 

(g)                      Accrual Basis of Accounting

 

The Plan utilizes the accrual basis of accounting.

 

(h)                      Purchase and Sale of Securities

 

Purchases and sales of securities are made on a trade-date basis.

 

(i)                         Investment Income

 

Dividend and interest income is recorded when earned.

 

11



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Note 3 - Fair Value Measurements

 

The Plan uses the three-level hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of the input that is significant to the measurement of fair value. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy consist of the following:

 

·                  Level 1 — Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Plan has the ability to access at the measurement date.

 

·                  Level 2 — Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument.

 

·                  Level 3 — Inputs to the valuation methodology are unobservable inputs based upon management’s best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions about risk.

 

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2011 and 2010.

 

Common collective trust funds: Valued at the net asset value (“NAV”) as permitted by practical expedient and reported by the respective funds at each valuation date. The use of NAV is deemed appropriate as these types of investments do not have finite lives or significant restrictions on redemptions.

 

GICs: Valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations, and adjusting for the credit-worthiness of the issuer, if necessary.

 

Mutual funds: Valued at the NAV of shares held by the plan at year end which are reported on an active market.

 

Common stock: Valued at the closing price reported on the active market on which the individual securities are traded.

 

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

12



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

The market value of CVS Caremark Common Stock was $40.78 and $34.77 per share at December 31, 2011 and 2010, respectively.

 

The following tables set forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2011 and 2010:

 

 

 

 

 

Investments at estimated fair value
at December 31, 2011

 

 

 

 

 

Investments at
fair value as
determined by
quoted prices
in active
markets
(Level I)

 

Valuation
techniques
based on
observable
market data
(Level II)

 

Valuation
techniques
incorporating
information
other than
observable
market data
(Level III)

 

Total

 

Cash

 

$

6,975

 

$

 

$

 

$

6,975

 

Common collective trust funds

 

 

913,306,344

 

 

913,306,344

 

Guaranteed investment contracts

 

 

 

242,024,341

 

242,024,341

 

Mutual funds:

 

 

 

 

 

 

 

 

 

Small cap equity

 

255,457,943

 

 

 

255,457,943

 

Mid cap equity

 

145,217,333

 

 

 

145,217,333

 

Large cap equity

 

587,992,559

 

 

 

587,992,559

 

International

 

684,264,867

 

 

 

684,264,867

 

Bond

 

593,024,769

 

 

 

593,024,769

 

Total mutual funds

 

2,265,957,471

 

 

 

2,265,957,471

 

Common stock:

 

 

 

 

 

 

 

 

 

Small Cap Equity

 

79,862,993

 

 

 

79,862,993

 

Large Cap Equity

 

577,101,913

 

 

 

577,101,913

 

CVS Caremark Common Stock Fund

 

625,577,434

 

 

 

625,577,434

 

Total common stock

 

1,282,542,340

 

 

 

1,282,542,340

 

Total investments

 

$

3,548,506,786

 

$

913,306,344

 

$

242,024,341

 

$

4,703,837,471

 

 

13



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

 

 

 

 

Investments at estimated fair value
at December 31, 2010

 

 

 

 

 

Investments at
fair value as
determined by
quoted prices
in active
markets
(Level I)

 

Valuation
techniques
based on
observable
market data
(Level II)

 

Valuation
techniques
incorporating
information
other than
observable
market data
(Level III)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

9,742,342

 

$

 

$

 

$

9,742,342

 

 

 

 

 

 

 

 

 

 

 

Common collective trust funds

 

 

788,193,027

 

 

788,193,027

 

Guaranteed investment contracts

 

 

 

308,871,889

 

308,871,889

 

Mutual funds:

 

 

 

 

 

 

 

 

 

Small cap equity

 

267,217,460

 

 

 

267,217,460

 

Mid cap equity

 

114,578,874

 

 

 

114,578,874

 

Large cap equity

 

548,432,281

 

 

 

548,432,281

 

International

 

702,660,573

 

 

 

702,660,573

 

Bond

 

527,533,357

 

 

 

527,533,357

 

Total mutual funds

 

2,160,422,545

 

 

 

2,160,422,545

 

Common stock:

 

 

 

 

 

 

 

 

 

Small Cap Equity

 

621,263,446

 

 

 

621,263,446

 

Large Cap Equity

 

92,528,091

 

 

 

92,528,091

 

CVS Caremark Common Stock Fund

 

605,720,590

 

 

 

605,720,590

 

Total common stock

 

1,319,512,127

 

 

 

1,319,512,127

 

 

 

 

 

 

 

 

 

 

 

Total investments

 

$

3,489,677,014

 

$

788,193,027

 

$

308,871,889

 

$

4,586,741,930

 

 

Level 3 Gains and Losses

 

The table below sets forth a summary of changes in the fair value of the Plan’s level 3 assets for the year ended December 31, 2011 and 2010.

 

 

 

Level 3 Assets — GICs
Year Ended December 31,

 

 

 

2011

 

2010

 

Balance, beginning of year

 

$

308,871,889

 

$

404,730,290

 

Unrealized losses relating to instruments still held at the reporting date

 

(39,046,209

)

(40,143,584

)

Purchases

 

50,851,975

 

 

Sales

 

(78,653,314

)

(55,714,817

)

Balance, end of year

 

$

242,024,341

 

$

308,871,889

 

 

14



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Note 4 — Notes Receivable from Participants

 

Participants may obtain bona fide loans from the Plan, utilizing funds accumulated in their accounts. The minimum amount which may be borrowed is $1,000. Participants can borrow up to 50% of their vested account balance but not more than $50,000, less their highest outstanding loan balance during the previous twelve months. The loans are repaid to the Plan through after-tax payroll deductions. The term of the loan is selected at the discretion of the participant, but may not exceed five years for a general loan and twenty-five years for a primary residence loan. Participants may have two loans outstanding at any time. Interest on loans is equal to the Prime Rate as of the prior month end plus 1%.

 

Note 5 - Investment Policy

 

At December 31, 2011 and 2010, most of the Plan’s 401(k) related assets were allocated among the investment options discussed in Note 1(i) based on employees’ elections. The investment options are recommended by an independent investment consultant and approved by the Benefit Plans Investment Subcommittee. Employee contributions that are waiting to be processed are temporarily invested in a common collective trust fund. This common collective trust fund is also used to account for and administer notes receivable from participants. The note repayments and interest earned are allocated to each of the investment funds based upon the participants’ contribution election percentages.

 

During 2011 and 2010, the Plan’s investments, including investments purchased, sold, as well as held during the year appreciated (depreciated) in fair value as follows:

 

Asset Category

 

2011

 

2010

 

 

 

 

 

 

 

Common collective trust funds

 

$

9,602,151

 

$

4,747,826

 

Mutual funds

 

(111,943,237

)

214,753,616

 

Common stock

 

84,547,678

 

133,559,631

 

 

 

$

(17,793,408

)

$

353,061,073

 

 

Note 6 - Plan Termination and Related Commitments

 

Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. If the Company terminates the Plan, all participants in the Plan become fully vested.

 

Note 7 - Federal Income Taxes

 

The Plan has received a determination letter from the Internal Revenue Service (“IRS”) dated June 17, 2004, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. Subsequent to this determination by the IRS, the Plan was amended and restated. The plan sponsor has submitted a request for a new determination letter. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes the Plan, as amended, is qualified and the related trust is tax exempt.

 

15



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Accounting principles generally accepted in the U.S. require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2011, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to 2008.

 

Note 8 - Transactions with Parties-In-Interest

 

Certain Plan investments are investment funds managed by The Bank of New York Mellon. The Bank of New York Mellon is the Trustee as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions.

 

Note 9 - Reconciliation of Financial Statements to Form 5500

 

The following is a reconciliation of the net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2011 and 2010:

 

 

 

2011

 

2010

 

 

 

 

 

 

 

Net assets available for benefits per the financial statements

 

$

4,829,286,386

 

$

4,754,766,528

 

Adjustment from fair value to contract value for fully benefit responsive investment contracts

 

17,196,233

 

20,933,427

 

Net assets available for benefits per the Form 5500

 

$

4,846,482,619

 

$

4,775,699,955

 

 

Note 10 - Investments

 

The following table presents investments of the Plan at fair value that represent 5% or more of the total fair value of the Plan’s assets.

 

 

 

2011

 

2010

 

 

 

 

 

 

 

CVS Caremark Corporation Common Stock

 

$

627,078,138

 

$

606,920,155

 

Vanguard Institutional Index Fund

 

587,992,560

 

548,432,281

 

EB Temporary Investment Fund II

 

504,005,372

 

541,932,540

 

PIMCO Total Return Institutional Class Fund

 

333,854,687

 

336,902,577

 

Vanguard Developed Markets Index Fund Institutional Shares

 

271,010,562

 

242,364,541

 

Templeton Foreign Equity Series-Primary Shares Fund

 

250,145,175

 

278,649,571

 

 

16



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

 

Notes to Financial Statements (Continued)

Years Ended December 31, 2011 and 2010

 

Note 11 — Guaranteed Investment Contracts

 

The Plan invests in fully benefit-responsive GICs. The issuer maintains the contributions in a general account. The account is credited with participant contributions plus earnings and charged for participant withdrawals and administrative expenses. The issuer is contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan. The crediting interest rate is fixed at the time the contract is entered into with the issuer and does not reset. For the year ended December 31, 2011 and 2010, the average yield of the GIC based upon underlying earnings and credited to participant accounts was 2.0% and 2.2%, respectively.

 

Certain events limit the ability of the Plan to transact at contract value with the GIC issuers. Such events may include (i) amendments to the plan documents (including complete or partial plan termination or merger with another plan), (ii) changes to the plan’s prohibition on competing investment options or deletion of equity wash provisions, (iii) bankruptcy of the plan sponsor or other plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a significant withdrawal from the Plan, or (iv) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The plan administrator does not believe that the occurrence of any such events that would limit the Plan’s ability to transact at contract value with participants is probable.

 

GICs generally do not permit issuers to terminate the agreement prior to the scheduled maturity date. The issuer may be in default if it breaches a material obligation under the investment contract, makes a material misrepresentation, has a decline in its long term credit rating below a threshold set forth in the contract, or is acquired or reorganized and the successor issuer does not satisfy the investment or credit guidelines applicable to issuers. If, in the event of default of an issuer, the Plan was unable to obtain a replacement investment contract, withdrawing participants may experience losses if the value of the Plan’s assets no longer covered by the contract is below contract value. The Plan may seek to add additional issuers over time to diversify the Plan’s exposure to such risk, but there is no assurance the Plan may be able to do so. The combination of the default of an issuer and an inability to obtain a replacement agreement could render the Plan unable to achieve its objective of maintaining a stable contract value. The terms of an investment contract generally provide for settlement of payments only upon termination of the contract or total liquidation of the covered investments. If the contract terminates due to issuer default (other than a default occurring because of a decline in its rating), the issuer will generally be required to pay to the Plan the excess, if any, of contract value over market value on the date of termination. Contract termination also may occur by either party upon election and notice. As GICs are fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to the GIC. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.

 

17



Table of Contents

 

Supplemental Schedule

 

18



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

International Equity Fund

 

14,679,881

 

Templeton Foreign Equity Series-Primary Shares Fund

 

Mutual Fund

 

$

250,145,175

 

 

 

 

 

 

 

 

 

 

 

Core Equity Fund

 

5,110,757

 

Vanguard Institutional Index Fund

 

Mutual Fund

 

587,992,560

 

 

 

 

 

 

 

 

 

 

 

Small Cap Growth Fund

 

1,721,555

 

Vanguard Explorer Fund

 

Mutual Fund

 

114,414,564

 

 

 

 

 

 

 

 

 

 

 

Small Cap Index Fund

 

1,784,903

 

Vanguard Small Cap Index Fund

 

Mutual Fund

 

59,597,899

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Index Fund

 

1,495,390

 

Vanguard Mid Cap Index Fund

 

Mutual Fund

 

145,217,333

 

 

 

 

 

 

 

 

 

 

 

International Equity Index Fund

 

3,088,791

 

Vanguard Developed Markets Index Fund Institutional Shares

 

Mutual Fund

 

271,010,562

 

 

 

 

 

 

 

 

 

 

 

U.S. Bond Index Fund

 

21,388,346

 

Vanguard Total Bond Market Index Fund

 

Mutual Fund

 

235,271,801

 

 

 

 

 

 

 

 

 

 

 

Inflation-Protected Bond Fund

 

2,116,765

 

Vanguard Inflation-Protected Securities Admiral Fund

 

Mutual Fund

 

23,898,282

 

 

 

 

 

 

 

 

 

 

 

Diversified Bond Fund

 

30,713,403

 

PIMCO Total Return Institutional Class Fund

 

Mutual Fund

 

333,854,687

 

 

 

 

 

 

 

 

 

 

 

Global Equity Fund

 

6,244,607

 

American Funds-New Perspective Fund

 

Mutual Fund

 

163,109,127

 

 

 

 

 

 

 

 

 

 

 

CVS Caremark Common Stock Fund

 

15,340,300

*

CVS Caremark Common Stock

 

CVS Caremark Corporation Common Stock

 

625,577,434

 

 

 

 

 

 

 

 

 

 

 

 

 

7,704,636

*

EB Temporary Investment Fund II

 

Common Collective Trust Fund

 

7,704,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CVS Caremark Common Stock Fund Subtotal

 

 

 

633,282,070

 

 

 

 

 

 

 

 

 

 

 

 

 

48,856,148

*

EB Temporary Investment Fund II

 

Common Collective Trust Fund

 

48,856,148

 

 

19



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Stable Value Fund

 

 

 

 

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Genworth Life and Insurance Co.

 

Guaranteed Investment

 

 

 

 

 

2,865,666

 

5.05%, due 2/29/2012

 

Contract (“GIC”)

 

$

2,865,666

 

 

 

2,901,577

 

5.66%, due 5/31/2012

 

GIC

 

2,901,577

 

 

 

12,035,866

 

5.56%, due 6/28/2013

 

GIC

 

12,035,866

 

 

 

5,704,622

 

5.14%, due 4/30/2012

 

GIC

 

5,704,622

 

 

 

9,248,317

 

5.15%, due 9/28/2012

 

GIC

 

9,248,317

 

 

 

 

 

Hartford Life Insurance Co.

 

 

 

 

 

 

 

1,921,841

 

5.23%, due 1/31/2012

 

GIC

 

1,921,841

 

 

 

12,168,860

 

5.03%, due 11/30/2012

 

GIC

 

12,168,960

 

 

 

5,720,277

 

5.55%, due 6/29/2012

 

GIC

 

5,720,277

 

 

 

3,625,377

 

5.41%, due 10/31/2013

 

GIC

 

3,625,377

 

 

 

 

 

ING Life Insurance Co.

 

 

 

 

 

 

 

10,117,575

 

1.84%, due 5/12/2014

 

GIC

 

10,117,575

 

 

 

1,792,740

 

4.89%, due 8/30/2013

 

GIC

 

1,792,740

 

 

 

6,016,359

 

1.25%, due 10/11/2013

 

GIC

 

6,016,359

 

 

 

1,804,684

 

5.11%, due 9/30/2013

 

GIC

 

1,804,684

 

 

 

 

 

Jackson National Life Insurance Co.

 

 

 

 

 

 

 

12,120,591

 

5.37%, due 12/28/2012

 

GIC

 

12,120,591

 

 

 

12,003,357

 

5.41%, due 6/28/2013

 

GIC

 

12,003,357

 

 

 

 

 

Metropolitan Life Ins. Co.

 

 

 

 

 

 

 

10,069,415

 

1.31%, due 6/20/2014

 

GIC

 

10,069,415

 

 

 

10,032,268

 

1.33%, due 10/3/2014

 

GIC

 

10,032,268

 

 

 

 

 

New York Life Ins. Co.

 

 

 

 

 

 

 

1,720,722

 

4.70%, due 9/28/2012

 

GIC

 

1,720,722

 

 

 

1,753,464

 

2.73%, due 2/29/2012

 

GIC

 

1,753,464

 

 

 

3,566,306

 

3.35%, due 7/31/2013

 

GIC

 

3,566,306

 

 

 

 

 

Pacific Life Ins. Co.

 

 

 

 

 

 

 

11,941,435

 

5.44%, due 6/28/2013

 

GIC

 

11,941,435

 

 

 

 

 

Principal Life Ins. Co.

 

 

 

 

 

 

 

10,016,424

 

1.34%, due 9/30/2014

 

GIC

 

10,016,424

 

 

 

 

 

Protective Life Insurance Co.

 

 

 

 

 

 

 

11,875,248

 

4.44%, due 7/31/2012

 

GIC

 

11,875,248

 

 

 

11,924,197

 

4.85%, due 3/28/2013

 

GIC

 

11,924,197

 

 

 

1,706,477

 

4.76%, due 8/31/2012

 

GIC

 

1,706,477

 

 

 

1,765,505

 

4.55%, due 7/31/2013

 

GIC

 

1,765,505

 

 

20



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Stable Value Fund

 

 

 

 

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prudential Insurance Company of America

 

 

 

 

 

 

 

5,742,006

 

5.20%, due 3/30/2012

 

GIC

 

$

5,742,006

 

 

 

11,853,497

 

4.50%, due 12/28/2012

 

GIC

 

11,853,497

 

 

 

12,054,529

 

5.34%, due 4/30/2013

 

GIC

 

12,054,529

 

 

 

 

 

Transamerica Life Insurance and Annuity

 

 

 

 

 

 

 

5,965,578

 

5.37%, due 7/31/2012

 

GIC

 

5,965,578

 

 

 

11,856,711

 

4.60%, due 2/28/2013

 

GIC

 

11,856,711

 

 

 

 

 

United of Omaha Life Insurance Co.

 

 

 

 

 

 

 

1,938,380

 

5.31%, due 1/31/2012

 

GIC

 

1,938,380

 

 

 

10,073,008

 

1.35%, due 3/30/2014

 

GIC

 

10,073,008

 

 

 

 

 

 

 

 

 

 

 

 

 

155,629,881

 

Wells Fargo Stable Value Fund D

 

Common Collective Trust Fund

 

163,100,115

 

 

 

154,770,437

 

Putnam Stable Value Fund

 

Common Collective Trust Fund

 

158,314,680

 

 

 

434,102,755

*

EB Temporary Investment Fund II

 

Common Collective Trust Fund

 

434,102,755

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stable Value Fund Subtotal

 

 

 

$

991,420,529

 

 

21



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value Fund

 

 

 

Lord Abbett and Dimensional Fund Advisor Small Cap Value Fund

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,800

 

AAR CORP

 

Common Stock

 

$

590,436

 

 

 

8,500

 

ALEXANDRIA REAL ESTATE EQUITIES INC

 

Common Stock

 

586,245

 

 

 

48,100

 

ALTERRA CAPITAL HOLDINGS LTD

 

Common Stock

 

1,136,603

 

 

 

16,800

 

ANIXTER INTERNATIONAL INC

 

Common Stock

 

1,001,952

 

 

 

21,400

 

APPLIED INDUSTRIAL TECHNOLOGIES INC

 

Common Stock

 

752,638

 

 

 

12,300

 

APTARGROUP INC

 

Common Stock

 

641,691

 

 

 

27,700

 

ASCENA RETAIL GROUP INC

 

Common Stock

 

823,244

 

 

 

13,400

 

ATLAS AIR WORLDWIDE HOLDINGS I

 

Common Stock

 

514,962

 

 

 

38,200

 

BEACON ROOFING SUPPLY INC

 

Common Stock

 

772,786

 

 

 

61,200

 

BRANDYWINE REALTY TRUST

 

Common Stock

 

581,400

 

 

 

15,600

 

BRISTOW GROUP INC

 

Common Stock

 

739,284

 

 

 

22,600

 

C&J ENERGY SERVICES INC

 

Common Stock

 

473,018

 

 

 

47,200

 

CABOT CORP

 

Common Stock

 

1,517,008

 

 

 

14,600

 

CABOT MICROELECTRONICS CORP

 

Common Stock

 

689,850

 

 

 

19,300

 

CENTENE CORP

 

Common Stock

 

764,087

 

 

 

25,900

 

CHEESECAKE FACTORY INC/THE

 

Common Stock

 

760,165

 

 

 

39,200

 

CHICAGO BRIDGE & IRON CO NV

 

Common Stock

 

1,481,760

 

 

 

14,500

 

CHILDRENS PLACE RETAIL STORES

 

Common Stock

 

770,240

 

 

 

21,000

 

CINEMARK HOLDINGS INC

 

Common Stock

 

388,290

 

 

 

17,600

 

CITY NATIONAL CORP/CA

 

Common Stock

 

777,568

 

 

 

18,000

 

COGNEX CORP

 

Common Stock

 

644,220

 

 

 

17,600

 

COHERENT INC

 

Common Stock

 

919,952

 

 

 

38,600

 

COLUMBIA BANKING SYSTEM INC

 

Common Stock

 

743,822

 

 

 

10,700

 

COMPASS MINERALS INTERNATIONAL

 

Common Stock

 

736,695

 

 

 

26,100

 

COMPLETE PRODUCTION SERVICES I

 

Common Stock

 

875,916

 

 

 

81,900

 

CVB FINANCIAL CORP

 

Common Stock

 

821,457

 

 

 

36,300

 

DIODES INC

 

Common Stock

 

773,190

 

 

 

71,600

 

DOLE FOOD CO INC

 

Common Stock

 

619,340

 

 

 

47,100

 

DUKE REALTY CORP

 

Common Stock

 

567,555

 

 

 

21,800

 

ELSTER GROUP SE

 

Common Stock

 

283,400

 

 

 

29,000

 

EMCOR GROUP INC

 

Common Stock

 

777,490

 

 

 

24,100

 

ENTERTAINMENT PROPERTIES TRUST

 

Common Stock

 

1,053,411

 

 

 

30,900

 

EXPRESS INC

 

Common Stock

 

616,146

 

 

 

36,700

 

FIRST FINANCIAL BANCORP

 

Common Stock

 

610,688

 

 

 

28,500

 

FLEETCOR TECHNOLOGIES INC

 

Common Stock

 

851,295

 

 

 

17,200

 

FTI CONSULTING INC

 

Common Stock

 

729,624

 

 

22



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value Fund

 

 

 

Lord Abbett and Dimensional Fund Advisor Small Cap Value Fund

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,400

 

GATX CORP

 

Common Stock

 

$

1,196,284

 

 

 

26,000

 

GAYLORD ENTERTAINMENT CO

 

Common Stock

 

627,640

 

 

 

16,400

 

GENESCO INC

 

Common Stock

 

1,012,536

 

 

 

12,200

 

GENESEE & WYOMING INC

 

Common Stock

 

739,076

 

 

 

16,900

 

GREIF INC

 

Common Stock

 

769,795

 

 

 

16,800

 

GULFMARK OFFSHORE INC

 

Common Stock

 

705,768

 

 

 

10,100

 

HAEMONETICS CORP

 

Common Stock

 

618,322

 

 

 

20,600

 

HEALTHSPRING INC

 

Common Stock

 

1,123,524

 

 

 

54,200

 

HEARTLAND EXPRESS INC

 

Common Stock

 

774,518

 

 

 

32,800

 

HEXCEL CORP

 

Common Stock

 

794,088

 

 

 

14,200

 

HITTITE MICROWAVE CORP

 

Common Stock

 

701,196

 

 

 

16,100

 

HUB GROUP INC

 

Common Stock

 

522,123

 

 

 

16,200

 

IBERIABANK CORP

 

Common Stock

 

798,660

 

 

 

29,600

 

II-VI INC

 

Common Stock

 

543,456

 

 

 

17,000

 

INVACARE CORP

 

Common Stock

 

259,930

 

 

 

31,400

 

JACK HENRY & ASSOCIATES INC

 

Common Stock

 

1,055,354

 

 

 

16,800

 

JOS A BANK CLOTHIERS INC

 

Common Stock

 

819,168

 

 

 

17,400

 

KENNAMETAL INC

 

Common Stock

 

635,448

 

 

 

55,200

 

KEY ENERGY SERVICES INC

 

Common Stock

 

853,944

 

 

 

9,600

 

KIRBY CORP

 

Common Stock

 

632,064

 

 

 

45,000

 

KNIGHT TRANSPORTATION INC

 

Common Stock

 

703,800

 

 

 

26,100

 

KOPPERS HOLDINGS INC

 

Common Stock

 

896,796

 

 

 

36,300

 

KORN/FERRY INTERNATIONAL

 

Common Stock

 

619,278

 

 

 

22,400

 

LITTELFUSE INC

 

Common Stock

 

962,752

 

 

 

7,800

 

LUFKIN INDUSTRIES INC

 

Common Stock

 

525,018

 

 

 

30,100

 

MAXIMUS INC

 

Common Stock

 

1,244,635

 

 

 

13,200

 

MEDNAX INC

 

Common Stock

 

950,532

 

 

 

19,100

 

MEN’S WEARHOUSE INC/THE

 

Common Stock

 

619,031

 

 

 

19,000

 

MOOG INC

 

Common Stock

 

834,670

 

 

 

18,600

 

NAVIGATORS GROUP INC/THE

 

Common Stock

 

886,848

 

 

 

15,000

 

NEW JERSEY RESOURCES CORP

 

Common Stock

 

738,000

 

 

 

39,300

 

OLIN CORP

 

Common Stock

 

772,245

 

 

 

77,500

 

ORIENT EXPRESS HOTELS LTD CL A

 

Common Stock

 

578,925

 

 

 

33,500

 

PACWEST BANCORP

 

Common Stock

 

634,825

 

 

 

29,400

 

PAR PHARMACEUTICAL COS INC

 

Common Stock

 

962,262

 

 

 

36,500

 

PAREXEL INTERNATIONAL CORP

 

Common Stock

 

757,010

 

 

23



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value Fund

 

 

 

Lord Abbett and Dimensional Fund Advisor Small Cap Value Fund

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

45,400

 

PEBBLEBROOK HOTEL TRUST

 

Common Stock

 

$

870,772

 

 

 

42,500

 

PENSKE AUTOMOTIVE GROUP INC

 

Common Stock

 

818,125

 

 

 

58,700

 

PEOPLE’S UNITED FINANCIAL INC

 

Common Stock

 

754,295

 

 

 

92,300

 

PMC - SIERRA INC

 

Common Stock

 

508,573

 

 

 

10,700

 

REGAL-BELOIT CORP

 

Common Stock

 

545,379

 

 

 

20,800

 

RELIANCE STEEL & ALUMINUM CO

 

Common Stock

 

1,012,752

 

 

 

22,200

 

RENT-A-CENTER INC/TX

 

Common Stock

 

821,400

 

 

 

13,900

 

ROGERS CORP

 

Common Stock

 

512,354

 

 

 

53,900

 

RSC HOLDINGS INC

 

Common Stock

 

997,150

 

 

 

21,600

 

RTI INTERNATIONAL METALS INC

 

Common Stock

 

501,336

 

 

 

23,200

 

RYDER SYSTEM INC

 

Common Stock

 

1,232,848

 

 

 

24,100

 

SANCHEZ ENERGY CORP

 

Common Stock

 

415,966

 

 

 

84,204

 

SANDRIDGE ENERGY INC

 

Common Stock

 

687,105

 

 

 

33,200

 

SCANSOURCE INC

 

Common Stock

 

1,195,200

 

 

 

14,900

 

SIGNATURE BANK/NEW YORK NY

 

Common Stock

 

893,851

 

 

 

17,800

 

SILGAN HOLDINGS INC

 

Common Stock

 

687,792

 

 

 

20,000

 

SILICON LABORATORIES INC

 

Common Stock

 

868,400

 

 

 

17,500

 

STIFEL FINANCIAL CORP

 

Common Stock

 

560,875

 

 

 

27,000

 

SUPERIOR ENERGY SERVICES INC

 

Common Stock

 

767,880

 

 

 

82,700

 

SUSQUEHANNA BANCSHARES INC

 

Common Stock

 

693,026

 

 

 

13,800

 

SVB FINANCIAL GROUP

 

Common Stock

 

658,122

 

 

 

29,100

 

TAL INTERNATIONAL GROUP INC

 

Common Stock

 

837,789

 

 

 

57,800

 

TERADYNE INC

 

Common Stock

 

787,814

 

 

 

29,300

 

TEXAS CAPITAL BANCSHARES INC

 

Common Stock

 

896,873

 

 

 

37,700

 

TITAN INTERNATIONAL INC

 

Common Stock

 

733,642

 

 

 

37,600

 

TRIMAS CORP

 

Common Stock

 

674,920

 

 

 

43,100

 

TRUEBLUE INC

 

Common Stock

 

598,228

 

 

 

3,200

 

UNITED NATURAL FOODS INC

 

Common Stock

 

128,032

 

 

 

27,900

 

VALIDUS HOLDINGS LTD COM SHS

 

Common Stock

 

878,850

 

 

 

15,800

 

WABCO HOLDINGS INC

 

Common Stock

 

685,720

 

 

 

21,900

 

WASHINGTON FEDERAL INC

 

Common Stock

 

306,381

 

 

 

7,900

 

WATTS WATER TECHNOLOGIES INC

 

Common Stock

 

270,259

 

 

 

23,100

 

WEINGARTEN REALTY INVESTORS

 

Common Stock

 

504,042

 

 

 

22,500

 

WERNER ENTERPRISES INC

 

Common Stock

 

542,250

 

 

 

14,300

 

WESCO INTERNATIONAL INC

 

Common Stock

 

758,043

 

 

 

5,309,353

 

DFA US TARGETED VALUE I FUND

 

Mutual Fund

 

81,445,481

 

 

24



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value Fund

 

 

 

Lord Abbett and Dimensional Fund Advisor Small Cap Value Fund

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

Cash

 

6,975

 

 

 

 

*

EB Temporary Investment Fund II

 

Common Collective Trust Fund

 

3,012,564

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value Fund Subtotal

 

 

 

$

164,328,013

 

 

25



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

 

shares

 

Identity of issue

 

Description

 

value**

 

 

 

 

 

 

 

 

 

 

 

Growth & Income Fund

 

 

 

J&W Seligman, Mellon Capital Management Growth & Income Fund, and Barrow, Hanley, Mewhinney & Strauss

 

Separately Managed Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

645,000

 

AES CORP/THE

 

Common Stock

 

$

7,636,800

 

 

 

224,200

 

ALTRIA GROUP INC

 

Common Stock

 

6,647,530

 

 

 

27,800

 

AMERICAN EXPRESS CO

 

Common Stock

 

1,311,326

 

 

 

15,700

 

AMERIPRISE FINANCIAL INC

 

Common Stock

 

779,348

 

 

 

37,800

 

ANNALY CAPITAL MANAGEMENT INC

 

Common Stock

 

603,288

 

 

 

34,300

 

APPLIED MATERIALS INC

 

Common Stock

 

367,353

 

 

 

44,000

 

AT&T INC

 

Common Stock

 

1,330,560

 

 

 

621,900

 

BANK OF AMERICA CORP

 

Common Stock

 

3,457,764

 

 

 

97,900

 

BAXTER INTERNATIONAL INC

 

Common Stock

 

4,844,092

 

 

 

39,800

 

BP PLC

 

Common Stock

 

1,701,052

 

 

 

212,000

 

BRISTOL-MYERS SQUIBB CO

 

Common Stock

 

7,470,880

 

 

 

61,300

 

CAPITAL ONE FINANCIAL CORP

 

Common Stock

 

2,592,377

 

 

 

22,800

 

CARDINAL HEALTH INC

 

Common Stock

 

925,908

 

 

 

43,100

 

CARNIVAL CORP

 

Common Stock

 

1,406,784

 

 

 

47,900

 

CENTERPOINT ENERGY INC

 

Common Stock

 

962,311

 

 

 

55,900

 

CHEVRON CORP

 

Common Stock

 

5,947,760

 

 

 

10,300

 

CHUBB CORP

 

Common Stock

 

712,966

 

 

 

22,200

 

CIGNA CORPORATION COM

 

Common Stock

 

932,400

 

 

 

32,850

 

CITIGROUP INC

 

Common Stock

 

864,284

 

 

 

112,300

 

CONOCOPHILLIPS

 

Common Stock

 

8,183,301

 

 

 

24,200

 

CORNING INC

 

Common Stock

 

314,116

 

 

 

63,000

 

COSTCO WHOLESALE CORP

 

Common Stock

 

5,249,160

 

 

 

40,400

 

COVENTRY HEALTH CARE INC

 

Common Stock

 

1,226,948

 

 

 

293,000

 

CSX CORP

 

Common Stock

 

6,170,580

 

 

 

36,800

 

CVS CAREMARK CORP

 

Common Stock

 

1,500,704

 

 

 

54,300

 

DISCOVER FINANCIAL SERVICES

 

Common Stock

 

1,303,200

 

 

 

7,500

 

DUN & BRADSTREET CORP

 

Common Stock

 

561,225

 

 

 

21,600

 

EATON CORP

 

Common Stock

 

940,248

 

 

 

116,000

 

EI DU PONT DE NEMOURS & CO

 

Common Stock

 

5,310,480

 

 

 

15,700

 

EMERSON ELECTRIC CO

 

Common Stock

 

731,463

 

 

 

8,200

 

ESSEX PROPERTY TRUST INC

 

Common Stock

 

1,152,182

 

 

 

14,700

 

EXELIS INC

 

Common Stock

 

133,035

 

 

 

84,400

 

FIFTH THIRD BANCORP

 

Common Stock

 

1,073,568

 

 

 

232,500

 

GAP INC/THE

 

Common Stock

 

4,312,875

 

 

 

70,500

 

GENERAL DYNAMICS CORP

 

Common Stock

 

4,681,905

 

 

26



Table of Contents

 

THE 401(k) PLAN AND THE EMPLOYEE STOCK OWNERSHIP PLAN

OF CVS CAREMARK CORPORATION AND AFFILIATED COMPANIES

Plan Number: 017

EIN 05-0494040

 

Schedule H, Line 4i — Schedule of Assets (Held at End of Year) (Continued)

December 31, 2011

 

 

 

Par value/

 

 

 

 

 

 

 

 

 

number of

 

 

 

 

 

Current

 

Fund

<