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Our Caremark Rx, Inc., we’ve become an integrated capabilities include industry-leading clinical provider of prescriptions and related health and health management programs, specialty services with an unmatched breadth of capa- pharmacy expertise, leadership in retail clinics, bilities. We’re the market leader in multiple customer service excellence, and our deep categories and able to provide payors and knowledge of the consumer gained through patients with solutions that no pharmacy the more than four million customers who retailer or pharmacy benefits manager on visit our stores every day. its own could offer. It’s “The Power of One.” We invite you to turn the page to learn more The combination will enable us to provide end- about our new company and our plans for to-end solutions that impact everything from improving the delivery of pharmacy and pharmacy plan design to the ultimate delivery health care services in the United States. #1 Prescriptions in CVS Caremark fills or manages more than 1 billion prescriptions annually through our retail and specialty pharmacy stores, mail order facilities, and PBM retail network pharmacies. That figure makes us the undisputed leader in our industry. U.S. pharmacy sales are expected to grow at approximately 5 percent annually for the foreseeable future, and we are well positioned to benefit from this favorable trend. We expect to gain share in our retail and PBM businesses through our combined company’s unique offerings, which competitors cannot currently replicate. #1 Retail Clinics in MinuteClinic, the nation’s leading chain of retail- based health clinics, operated 462 locations in 25 states at year-end. Nearly all are located right inside our stores, making it “CVS easy” to seek treatment for common illnesses or to receive routine vaccinations. Open seven days a week, MinuteClinic requires no appointment. Its clinicians — primarily nurse practitioners — have handled more than 1.5 million patient visits to date and over 500,000 in the final four months of 2007 alone. With our broader health care focus, many more MinuteClinics are on the way in 2008 with an expanded list of services. CVS Caremark I #1 Specialty Pharmacy in CVS Caremark leads the industry with approximately $8 billion in specialty pharmacy sales through our 20 specialty mail order pharmacies, our 56 specialty pharmacy stores, and CVS/pharmacy locations. Specialty costs are rising rapidly for payors, and we’re uniquely positioned to help our PBM clients control spending with our advanced utilization management guidelines, clinical expertise, and Accordant® health management programs. #1 Store Count in With nearly 6,300 CVS/pharmacy locations and 56 specialty pharmacy stores from coast to coast, we operate more stores than any other U.S. drugstore chain. More than 60 percent are freestanding, making it “CVS easy” for customers to fill prescriptions, replenish the medicine cabinet, or stop in to consult with one of our beauty advisors. With free time in such short supply these days, 60 percent of our locations offer drive-thru pharmacies and 72 percent provide the convenience of 24-hour or extended-hours drugstores. I # 1 Retail Loyalty 007 Annual Report in The most popular loyalty program in retail expanded further in 2007 as ExtraCare card usage exceeded 63 percent of front-end sales. More than 50 million active cardholders are taking advantage of in-store sales while skipping the hassle of clipping coupons. They also receive offerings with their receipts targeted to their specific shopping preferences along with quarterly ExtraBucks. ExtraBucks can be used for virtually any front-end purchase just like cash, and customers tell us they love them! CVS Caremark I One Company What do you get when you combine the nation’s largest chain of retail pharmacies, a leading PBM, and the fastest-growing operator of retail health clinics? In CVS Caremark, you get a company with the potential to have a major impact on the way pharmacy and health care services in the United States are delivered. We plan to leverage our unique combination to help payors control costs more effectively, improve patient access, and promote better health outcomes in a way that no other company can. I 007 Annual Report One View of Patient It won’t be long before every one of Caremark’s covered lives can walk into a CVS/pharmacy with the confidence that their pharmacist has a complete overview of their individual history. That includes routine prescriptions filled in our stores, mail order pharmacies, or at CVS.com; participation in one of Caremark’s leading health management programs; or a visit to one of our MinuteClinics. This unique view of the patient will, among other things, help CVS Caremark promote greater compliance with customers’ prescription drug regimens. That’s one of the keys to improving health outcomes while reducing health care costs for both patients and payors. CVS Caremark I One Goal “ CVS Caremark is positioned to improve access for patients, promote better health outcomes, and control payor costs in a way that no pharmacy retailer or PBM could do separately.” Tom Ryan I Chairman of the Board, President & CEO Dear Shareholder: The past year set the stage for • We opened 7 new or relocated Total revenues rose 7. percent a new chapter in our company’s CVS/pharmacy stores and saw to a record $7. billion. In our history as we completed the continued improvement in sales CVS/pharmacy segment, same transformational merger of CVS and profits in the stores we store sales rose . percent. Gross Corporation and Caremark Rx, Inc. acquired from Albertson’s, Inc., margins increased in both our retail We are now the largest integrated in 00, and from J.C. Penney and PBM businesses, due largely to provider of prescriptions and related in 200.