J.P. Morgan Healthcare Conference January 15, 2014 Greg Wasson - - PDF document

▶
j p morgan healthcare conference
SMART_READER_LITE
LIVE PREVIEW

J.P. Morgan Healthcare Conference January 15, 2014 Greg Wasson - - PDF document

Apr 24, 2023 381 likes •657 views

Mass J.P. Morgan Healthcare Conference January 15, 2014 Greg Wasson President and CEO 2 1 Mass Safe Harbor and Non-GAAP Safe Harbor and Non-GAAP Certain statements and projections of future results made in these presentations

slide-1
SLIDE 1

Mass 1

J.P. Morgan Healthcare Conference

Greg Wasson President and CEO January 15, 2014

2

slide-2
SLIDE 2

Mass 2

Certain statements and projections of future results made in these

presentations constitute forward-looking statements that are based on current market, competitive and regulatory expectations that involve risk and

  • uncertainty. Except to the extent required by the law, we undertake no
  • bligation to update publicly any forward-looking statement after these

presentations, whether as a result of new information, future events, changes in assumptions or otherwise.

Please see our latest Form 10-K &10-Q filings for a discussion of risk factors

as they relate to forward-looking statements.

Today’s presentation includes certain non-GAAP financial measures, and we

refer you to the Appendix to the presentation materials available on our investor relations website for reconciliations to the most directly comparable GAAP financial measures and related information.

Safe Harbor and Non-GAAP Safe Harbor and Non-GAAP

3

A Walgreens Welcome to San Francisco A Walgreens Welcome to San Francisco

135 Powell St. San Francisco

(Corner of Powell and O’Farrell)

4

slide-3
SLIDE 3

Mass 3

Slowed store openings to focus on core Strategic acquisitions brought leading-edge concepts

Our Journey Over the Past 5 Years Our Journey Over the Past 5 Years

Alliance Boots partnership and long- term strategic relationship with AmerisourceBergen

5

Launched Balance Rewards loyalty program

Our Purpose and Vision Our Purpose and Vision

Our Purpose...

To help people get, stay and live well

Our Vision...

To be the first choice in healthy and daily living for everyone in America – and beyond

6

slide-4
SLIDE 4

Mass 4

Our Strategic Growth Drivers Our Strategic Growth Drivers

Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform

7 8

Creating Value for our Shareholders Creating Value for our Shareholders

Adjusted Net Earnings: ~$13B*

Operating Cash Flow: ~$20B Total Shareholder Return: 145% Our Progress over the Past 5 Years…

* Non-GAAP Financial Measures – see Appendix.

GAAP Net Earnings: ~$11B

slide-5
SLIDE 5

Mass 5

Today’s Agenda Today’s Agenda

Industry Trends Strategic Growth Drivers Value Creation

9

Dynamic Industry - Healthcare

Healthcare spend is 17% of GDP, growing to 20% by 2020 10,000 Americans turning 65 daily -- spending twice as much on healthcare Healthcare reform adding 30 million insured Americans

10

slide-6
SLIDE 6

Mass 6

70% of Americans who visit the ER don’t have or don’t utilize a primary care physician Emerging healthcare delivery models Shifting from fee-for-service to pay- for-performance

RPh w/ patient

Dynamic Industry - Healthcare

11

Dynamic Industry - Retail

Consumers looking for value Blurring of retail channels Growing digital commerce

12

slide-7
SLIDE 7

Mass 7

How Walgreens is Best Positioned How Walgreens is Best Positioned

8,200 health and daily living destinations 70,000 of the most trusted professionals in healthcare 400 healthcare clinics 370 worksite clinics 200 health system pharmacies 75 infusion pharmacies 2 central fill mail facilities 2 central specialty care centers

Over 11,000 stores and 370 distribution centers

  • perating in 25 countries*

How Walgreens is Best Positioned How Walgreens is Best Positioned

14 *Including associates and joint ventures of Alliance Boots

slide-8
SLIDE 8

Mass 8

Our Strategic Growth Drivers Our Strategic Growth Drivers

Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform

15

Creating a Well Experience Creating a Well Experience

Extraordinary customer care Right products and solutions Opened or converted more than 600 Well Experience locations to date Every community in America

16

slide-9
SLIDE 9

Mass 9

Stepping Out to Create Something New & Unique... Stepping Out to Create Something New & Unique...

Flagship, Chicago Manhattan Beach, CA Johns Hopkins Medical Net Zero, Evanston, IL

17

  • 3%
  • 2%
  • 1%

0% 1% 2% 3%

Dec Dec Dec Dec Jan Jan Jan Jan Feb Feb Feb Feb Mar/Apr Mar/Apr Mar/Apr Mar/Apr May May May May June June June June July July July July Aug Aug Aug Aug Sep Sep Sep Sep Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec One-Year One-Year One-Year One-Year

  • 2.3%
  • 2.3%
  • 2.3%
  • 2.3%
  • 0.4%
  • 0.4%
  • 0.4%
  • 0.4%
  • 1.4%
  • 1.4%
  • 1.4%
  • 1.4%
  • 0.2%
  • 0.2%
  • 0.2%
  • 0.2%

1.2% 1.2% 1.2% 1.2% 0.8% 0.8% 0.8% 0.8% 2.3% 2.3% 2.3% 2.3% 2.2% 2.2% 2.2% 2.2% 2.9% 2.9% 2.9% 2.9% 2.3% 2.3% 2.3% 2.3% 1.9% 1.9% 1.9% 1.9% 2.5% 2.5% 2.5% 2.5% Two-Year Two-Year Two-Year Two-Year

  • 1.7%
  • 1.7%
  • 1.7%
  • 1.7%

1.2% 1.2% 1.2% 1.2% 0.6% 0.6% 0.6% 0.6%

  • 0.7%
  • 0.7%
  • 0.7%
  • 0.7%

0.2% 0.2% 0.2% 0.2%

  • 0.2%
  • 0.2%
  • 0.2%
  • 0.2%
  • 0.1%
  • 0.1%
  • 0.1%
  • 0.1%

1.6% 1.6% 1.6% 1.6% 1.4% 1.4% 1.4% 1.4%

  • 0.6%
  • 0.6%
  • 0.6%
  • 0.6%

0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%

YOY % Change YOY % Change YOY % Change YOY % Change

Accelerated Daily Living Trends Accelerated Daily Living Trends

Two - Year Stack One - Year % Change

*February FE Comp excludes the benefit of Leap Day

FY 2013 FY 2014

Front End Comp Store Sales % Change

18

slide-10
SLIDE 10

Mass 10

Our Strategic Growth Drivers Our Strategic Growth Drivers

Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform

19

  • 1. Outcomes Pharmaceutical Health Care, 2011. 2. www.dhs.state.mn.us/main/groups/business_partners/documents/pub/dhs16_140283.pdf.

Accessed April 24, 2012. 3. Isetts BJ et al. Am J Pharm Assoc. 2008;48:203-214.

Advancing Community Pharmacy Advancing Community Pharmacy

Patient Adherence Improves Outcomes Patient Adherence Improves Outcomes Increased pharmacist time with patient Non-adherence costs U.S. healthcare system $300B/year Studies find improved adherence after one on one consultation with pharmacist

20

slide-11
SLIDE 11

Mass 11

0.8 7.4 6.8 6.7 8.7

2 4 6 8 10

FY09 FY10 FY11 FY12 FY13

Millions

Walgreens Immunizations Administered

Advancing Community Pharmacy Advancing Community Pharmacy

Growing Immunizations Growing Immunizations

$3.5B $2.0B $1.2B $1.2B $0.9B $1.5B

$10.3B

Seasonal Influenza HPV TetDipPertussis/Td Meningitis Hep A/ Hep B Pneumococcal/ Zoster/ Varicella

Estimated Size of US Immunization Market*

*Walgreen Co. Estimates

21

89% of the US HIV population has access to one of our 750 HIV Centers of Excellence

Advancing Community Pharmacy Advancing Community Pharmacy

Centers of Excellence (COE) Centers of Excellence (COE)

COE staffed by specially trained pharmacists

22

Expanding centers for other complex diseases like multiple sclerosis and cystic fibrosis

slide-12
SLIDE 12

Mass 12

Advancing Community Pharmacy Advancing Community Pharmacy

Expanding the Offering at Healthcare Clinics Expanding the Offering at Healthcare Clinics

23

Advancing Community Pharmacy Advancing Community Pharmacy

Innovative Offerings: Diagnostics Innovative Offerings: Diagnostics

Lab tests on samples as small as 1/1,000 the size of a typical blood draw Results to you and your doctor in less than four hours, on average Pricing dramatically low rates and accepting major insurance carriers as well as Medicare and Medicaid.

24

slide-13
SLIDE 13

Mass 13

Advancing Community Pharmacy Advancing Community Pharmacy

Specialty and Infusion Specialty and Infusion

Specialty is the fastest growing pharmacy segment -- with 3% of the population projected to drive 50% of total drug spend by 2017 Walgreens is well positioned with the integrated multi-channel assets in place Offering the largest home infusion network in the nation

25

Advancing Community Pharmacy Advancing Community Pharmacy

Differentiated Experience Differentiated Experience

Accessible pharmacist Mobile/online Privacy for health tests Integrated healthcare Convenient prescription pick-up

26

slide-14
SLIDE 14

Mass 14

Advancing Community Pharmacy Advancing Community Pharmacy

Focusing on Patient Care through Strategic Partnerships Focusing on Patient Care through Strategic Partnerships

Stanford University Cancer Research Center Johns Hopkins Medicine

27

Overall Unplanned Admissions – Hospitals <30 Days by TIme

Advancing Community Pharmacy Advancing Community Pharmacy

Walgreens Well Transitions Program Walgreens Well Transitions Program

Well Transitions Procedure:

  • Bedside delivery of discharge

medications

  • Medication reconciliation
  • Two follow-up phone calls to

reinforce adherence

  • Continuity with Walgreens

community pharmacists

20.0% 18.4% 21.3% 13.1% 12.8% 10.0%

0% 5% 10% 15% 20% 25%

CY13 Q1 CY13 Q2 CY13 Q3

Readmissions %

28

Patients eligible but not enrolled Patients enrolled in program

slide-15
SLIDE 15

Mass 15

Advancing Community Pharmacy Advancing Community Pharmacy

Building Physician Partnerships Building Physician Partnerships

29

Preferred Plans

Advancing Community Pharmacy Advancing Community Pharmacy

Winning Medicare Part D Winning Medicare Part D

Med D Volume Growth

30

52wks through Nov 2013 vs LY. 30-day equivalent prescriptions

Mass

13.4%

Food

17.3%

Independents

8.0%

Other Chain Drug

14.0%

Walgreens

21.2%

Market

14.1%

slide-16
SLIDE 16

Mass 16

93 113 145 178 208

50 100 150 200 250

FY09 FY10 FY11 FY12 FY13

Walgreens 90-Day at Retail Prescriptions

(30-Day Equivalents)

+22.2% CAGR

Millions

Advancing Community Pharmacy Advancing Community Pharmacy

90-Day at Retail 90-Day at Retail

1.1% 0.0% 0.3%

  • 7.6%
  • 5.8%
  • 10%
  • 8%
  • 6%
  • 4%
  • 2%

0% 2%

FY09 FY10 FY11 FY12 FY13

Growth in Industry Mail Prescriptions*

*IMS Data

31

  • 4%
  • 2%

0% 2% 4% 6% 8%

Dec Dec Dec Dec Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr May May May May June June June June July July July July Aug Aug Aug Aug Sep Sep Sep Sep Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec One-Year One-Year One-Year One-Year

  • 2.2%
  • 2.2%
  • 2.2%
  • 2.2%

7.2% 7.2% 7.2% 7.2% 6.4% 6.4% 6.4% 6.4% 7.4% 7.4% 7.4% 7.4% 6.0% 6.0% 6.0% 6.0% 7.3% 7.3% 7.3% 7.3% 7.2% 7.2% 7.2% 7.2% 7.1% 7.1% 7.1% 7.1% 7.7% 7.7% 7.7% 7.7% 6.1% 6.1% 6.1% 6.1% 6.1% 6.1% 6.1% 6.1% 4.0% 4.0% 4.0% 4.0% 3.6% 3.6% 3.6% 3.6% Two-Year Two-Year Two-Year Two-Year 0.6% 0.6% 0.6% 0.6%

  • 1.1%
  • 1.1%
  • 1.1%
  • 1.1%
  • 1.9%
  • 1.9%
  • 1.9%
  • 1.9%
  • 1.2%
  • 1.2%
  • 1.2%
  • 1.2%
  • 2.1%
  • 2.1%
  • 2.1%
  • 2.1%
  • 1.7%
  • 1.7%
  • 1.7%
  • 1.7%
  • 2.1%
  • 2.1%
  • 2.1%
  • 2.1%
  • 0.6%
  • 0.6%
  • 0.6%
  • 0.6%

0.7% 0.7% 0.7% 0.7%

  • 0.4%
  • 0.4%
  • 0.4%
  • 0.4%

0.5% 0.5% 0.5% 0.5% 1.1% 1.1% 1.1% 1.1% 1.4% 1.4% 1.4% 1.4%

YOY % Change YOY % Change YOY % Change YOY % Change

Solid Script Momentum Solid Script Momentum

Comp Data Adjustments: Day Fall, 90 Day, Flu Shot, and Flu Script

Two - Year Stack One - Year % Change

FY 2013 FY 2014

Script Comp Store % Change

32

slide-17
SLIDE 17

Mass 17

Our Strategic Growth Drivers... Our Strategic Growth Drivers...

Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform

33

Establishing an Efficient Global Platform Establishing an Efficient Global Platform

Greater Scale and Global Reach Greater Scale and Global Reach Streamline global pharmaceutical supply chain Increase patient access to pharmaceuticals Easier for Pharma to bring new products and solutions to market Global sourcing benefits

34

slide-18
SLIDE 18

Mass 18

$154M $350M- $400M† $1B† $0 $200 $400 $600 $800 $1,000

FY13 FY14E FY16 Goal

Combined Synergies with Alliance Boots

Generics Branded Products (Pharma) Branded Products (Non-Pharma) Own Brands and General Merch. Goods not for Resale Front of Store Growth

Establishing an Efficient Global Platform Establishing an Efficient Global Platform

Synergy Work Streams Synergy Work Streams

† Forward-Looking Statements – See cautionary note in attached Appendix.

Six Synergy Work Streams

35

Distribution Agreement Equity Alignment Strategic Collaboration

36

Establishing an Efficient Global Platform Establishing an Efficient Global Platform

AmerisourceBergen AmerisourceBergen

slide-19
SLIDE 19

Mass 19

FY 2016 Goals† Revenue >$130 Billion Operating Income (GAAP) $8.5 - $9.0 Billion Adjusted Operating Income* $9.0 - $9.5 Billion Synergies $1 Billion Operating Cash Flow ~$8 Billion Net Debt** ~$11 Billion

+

†Forward-Looking Statements – See cautionary note in attached Appendix.

All figures assume constant currency and exercise of option to acquire remaining 55% interest. All financial goals assume no major mergers and acquisitions or strategic transactions. * Non-GAAP Financial Measures – see Appendix. ** Net debt defined as balance sheet debt less cash and cash equivalents. Net debt excludes lease obligations. ~ 1.1B shares projected to be outstanding in FY 2016. Projected shares outstanding assumes no share repurchases.

37

Progress on Long-Term Goals... Progress on Long-Term Goals...

Reinvest in Core Strategies Invest in Strategic Opportunities Return Cash to Shareholders Maintain Strong Balance Sheet and Financial Flexibility

38

Capital Allocation for Future Value Creation Capital Allocation for Future Value Creation

slide-20
SLIDE 20

Mass 20

39

Reinvesting in Core Strategies Reinvesting in Core Strategies

Over Past 5 Years… Cumulative Cap Ex:

~$7B

New Locations:

1,648

Well Experience Stores:

600

40

Investing in Strategic Opportunities Investing in Strategic Opportunities

Over Past 5 Years, Cumulative M&A & Strategic Investments: ~$10B*

Retail Consolidation Omni-Channel Access

Snyder’s

*Includes cash and equity investments

Healthcare Expansion

Crescent Healthcare Omnicare Infusion Cardinal Specialty Rx Solutions McKesson Specialty BioScrip Specialty

Strategic Partnerships

slide-21
SLIDE 21

Mass 21

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$1.26 Dividends Paid per Fiscal Year in Dollars

$

E

Dividend and Total Shareholder Return Dividend and Total Shareholder Return

20 Year Total Shareholder Return CAGR --- 14.6% 5 Year Total Shareholder Return CAGR --- 20.8% 1 Year Total Shareholder Return CAGR --- 60.3%

42

At the Corner of Happy and Healthy At the Corner of Happy and Healthy

slide-22
SLIDE 22

Mass 22

Appendix

The following information provides reconciliations of the supplemental non-GAAP financial measures, as defined under SEC rules, presented in this presentation to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). The company has provided these non-GAAP financial measures in the presentation, which are not calculated or presented in accordance with GAAP, as supplemental information in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the company’s financial results both including and excluding the adjusted items and believes that the non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company’s business from period to period and trends in the company’s historical operating results. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the presentation. The company does not provide a non-GAAP reconciliation for non-GAAP estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort.

43

Net Earnings (GAAP) Acquisition Related Costs Hurricane Sandy Acquisition Related Amortization LIFO Provision Gain on WHI Sale Fair Market Value of warrants Adjustment DEA Settlement Costs Medicare Part D Organizational Efficiency Costs Alliance Boots Related Tax Adjusted Net Earnings (Non-GAAP)

Fiscal 2009 Q1 408

  • 22

27

  • 457

Q2 640

  • 22

31

  • 693

Q3 522

  • 24

20

  • 566

Q4 348

  • 26

31

  • 493

Full Year 2,006

  • 94

109

  • 2,209

Fiscal 2010 Q1 489

  • 25

20

  • 534

Q2 669

  • 24

17

  • 710

Q3 463

  • 33

11

  • 43
  • 550

Q4 470

  • 34

39

  • 543

Full Year 2,091

  • 116

87

  • 43
  • 2,337

Fiscal 2011 Q1 580

  • 33

26

  • 639

Q2 739

  • 28

35

  • 802

Q3 603

  • 35

32

  • 670

Q4 792

  • 42

38 (273)

  • 599

Full Year 2,714

  • 138

131 (273)

  • 2,710

Fiscal 2012 Q1 554

  • 37

28

  • 619

Q2 683

  • 39

45

  • 767

Q3 537 12

  • 41

38

  • 628

Q4 353 70

  • 45

85

  • 553

Full Year 2,127 82

  • 161

195

  • 2,565

Fiscal 2013 Q1 413 23 24 59 34

  • 553

Q2 756 13

  • 71

46 (13)

  • 42

915 Q3 624 17

  • 52

76

  • (48)

47

  • 44

812 Q4 657 7

  • 59

(5)

  • (62)
  • 8

38 702 Full Year 2,450 60 24 241 151 (13) (110) 47

  • 8

124 2,982

Reconciliation of Adjusted Net Earnings Reconciliation of Adjusted Net Earnings

$ in Millions

44

slide-23
SLIDE 23

Mass 23

Net Earnings (GAAP) Acquisition Related Costs Hurricane Sandy Acquisition Related Amortization LIFO Provision Gain on WHI Sale Fair Market Value of warrants Adjustment DEA Settlement Costs Medicare Part D Organizational Efficiency Costs Alliance Boots Related Tax Adjusted Net Earnings (Non-GAAP)

Fiscal 2014 Q1 695 16

  • 58

37

  • (161)
  • 15

28 688

Reconciliation of Adjusted Net Earnings Reconciliation of Adjusted Net Earnings

$ in Millions

45

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Cash Flow from Operations (GAAP) $390 $1,116 $985 $548 $312 $1,428 $1,519 $852 Capital Expenditures (GAAP) (490) (553) (610) (572) (638) (454) (442) (393) Free Cash Flow (Non- GAAP)* ($100) $563 $375 ($24) ($326) $974 $1,077 $459

Reconciliation of Free Cash Flow Reconciliation of Free Cash Flow

$ in Millions

46

*Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows.

slide-24
SLIDE 24

Mass 24

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Cash Flow from Operations (GAAP) $1,168 $595 $1,056 $925 $1,165 $886 $1,230 $362 Capital Expenditures (GAAP) (304) (220) (262) (228) (273) (196) (230) (514) Free Cash Flow (Non- GAAP)* $864 $375 $794 $697 $892 $690 $1,000 ($152)

Reconciliation of Free Cash Flow Reconciliation of Free Cash Flow

$ in Millions

47

*Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Cash Flow from Operations (GAAP) $809 $1,007 $1,847 $768 $601 $1,198 $1,379 $1,123 Capital Expenditures (GAAP) (419) (304) (379) (448) (336) (245) (293) (338) Free Cash Flow (Non- GAAP)* $390 $703 $1,468 $320 $265 $953 $1,086 $785

Reconciliation of Free Cash Flow Reconciliation of Free Cash Flow

$ in Millions

48

*Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows.

slide-25
SLIDE 25

Mass 25

1Q14 Cash Flow from Operations (GAAP) $133 Capital Expenditures (GAAP) (364) Free Cash Flow (Non-GAAP)* (231)

$ in Millions

49

Reconciliation of Free Cash Flow Reconciliation of Free Cash Flow

*Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows.

Certain Definitions & Assumptions

50

CERTAIN ASSUMPTIONS: Unless the context otherwise indicates or requires:

  • This presentation assumes constant currency exchange rates after the date hereof based on current rates;
  • References to the combined company and pro forma combined financial and other information assume that Walgreens has elected to exercise its
  • ption in Step 2 during the period in 2015 when it has the right to do so;
  • Walgreens transaction with Alliance Boots does not include the benefit of Alliance Boots minority interest in Galenica Ltd., a Swiss healthcare group,

so Walgreens shareholders will not benefit from the financial performance of Galenica Ltd. even though Alliance Boots proportionate interest in their profits is reflected in Alliance Boots financial statements for periods prior to May 10, 2013; and

  • All financial goals assume no major mergers and acquisitions or other strategic transactions.

Trading Profit - Profit from operations before amortization of customer relationships and brands, exceptional items and share of post-tax earnings of associates and joint ventures Historical Alliance Boots Financial Information – Alliance Boots’ audited consolidated financial statements for the years ended March 31, 2013 and 2012 were filed as Exhibit 99.1 to the Walgreen Co. Form 8-K filed on May 15, 2013. Such financial statements of Alliance Boots were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS) and audited in accordance with auditing standards generally accepted in the United States. All descriptions of the company’s agreements relating to Alliance Boots and the arrangements and transactions contemplated thereby in this presentation are qualified in their entirety by reference to the full text of the agreements, copies of which have been filed with the SEC. See the Company’s Form 8-K filings on June 19, 2012, August 6, 2012, September 10, 2012 and September 13, 2012. All descriptions in this presentation of the agreements relating to the strategic long-term relationship with AmerisourceBergen announced by the Company and Alliance Boots on March 18, 2013 and the arrangements and transactions contemplated thereby are qualified in their entirety by reference to the description and the full text of the agreements in the Company’s Form 8-K filing on March 20, 2013.

slide-26
SLIDE 26

Mass 26

Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements

Cautionary Note Regarding Forward-Looking Statements. Statements in these materials and the accompanying presentation that are not historical, including, without limitation, estimates of future financial and operating performance, including the amounts and timing of future accretion and synergies, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expect," "likely," "outlook," "forecast, "would," "could," "should," "can," "will," "project," "intend," "plan," "goal," “target,” "continue," "sustain," "synergy," "on track," "believe," "seek," "estimate," "anticipate," "may," "possible," "assume," variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, those relating to our commercial agreement with AmerisourceBergen, the arrangements and transactions contemplated by our Framework Agreement with AmerisourceBergen and Alliance Boots and their possible effects, the Purchase and Option Agreement and other agreements relating to our strategic partnership with Alliance Boots, the arrangements and transactions contemplated thereby and their possible effects, the parties' ability to realize anticipated synergies and achieve anticipated financial results, the risks associated with transitions in supply arrangements, the risks associated with international business operations, the risks associated with governance and control matters in minority investments, whether the option to acquire the remainder of the Alliance Boots equity interest will be exercised and the financial ramifications thereof, the risks associated with equity investments in AmerisourceBergen including whether the warrants to invest in AmerisourceBergen will be exercised and the financial ramifications thereof, changes in vendor, payer and customer relationships and terms, changes in network participation, the implementation, operation and growth of our customer loyalty program, changes in economic and market conditions, competition, risks associated with new business areas and activities, risks associated with acquisitions, joint ventures and strategic investments, the ability to realize anticipated results from capital expenditures and cost reduction initiatives, outcomes of legal and regulatory matters, and changes in legislation or regulations. These and other risks, assumptions and uncertainties are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K, which is incorporated herein by reference, and in other documents that we file or furnish with the Securities and Exchange

  • Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary

materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, Walgreens does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the initial distribution of this presentation, whether as a result of new information, future events, changes in assumptions or otherwise.

51