Earnings Per Share

3 Months Ended

Mar. 31, 2012

Earnings Per Share

Earnings Per Share

Note 6 – Earnings Per Share

Basic earnings per common share attributable to CVS Caremark is computed by dividing: (i) net income attributable to CVS Caremark by (ii) the weighted average number of common shares outstanding in the period (the “Basic Shares”).

Diluted earnings per common share attributable to CVS Caremark is computed by dividing: (i) net income attributable to CVS Caremark by (ii) Basic Shares plus the additional shares that would be issued assuming that all dilutive stock awards are exercised. Options to purchase approximately 0.1 million and 25.7 million shares of common stock were outstanding, but were not included in the calculation of diluted earnings per share for the three months ended March 31, 2012 and 2011, respectively, because the options’ exercise prices were greater than the average market price of the common shares and, therefore, the effect would be antidilutive.

The following is a reconciliation of basic and diluted earnings per common share for the respective periods:

	Three Months Ended
	March 31,
In millions, except per share amounts	2012			2011
Numerators for earnings per common share calculations:
Income from continuing operations	$	776		$	709
Net loss attributable to noncontrolling interest	1			1
Income from continuing operations attributable to CVS Caremark	777			710
Income (loss) from discontinued operations, net of tax	(1		)	3
Net income attributable to CVS Caremark, basic and diluted	$	776		$	713
Denominators for earnings per common share calculations:
Weighted average common shares, basic	1,299			1,362
Effect of dilutive securities:
Stock options	9			7
Restricted stock units	1			2
Weighted average common shares, diluted	1,309			1,371
Basic earnings per common share:
Income from continuing operations attributable to CVS Caremark	$	0.60		$	0.52
Income (loss) from discontinued operations attributable to CVS Caremark	—			—
Net income attributable to CVS Caremark	$	0.60		$	0.52
Diluted earnings per common share:
Income from continuing operations attributable to CVS Caremark	$	0.59		$	0.52
Income (loss) from discontinued operations attributable to CVS Caremark	—			—
Net income attributable to CVS Caremark	$	0.59		$	0.52