Walgreens Presents Growth Strategy at 2013 Annual Shareholders Meeting

DEERFIELD, Ill., January 09, 2013 - Reviewing a challenging but strategically important year for Walgreens (NYSE: WAG) (Nasdaq: WAG), Chairman James A. Skinner, President and Chief Executive Officer Gregory D. Wasson and Executive Vice President, Chief Financial Officer and President, International Wade D. Miquelon today outlined how the company is positioned for growth in fiscal year 2013 at Walgreens Annual Shareholders Meeting. Addressing more than 2,000 shareholders in Chicago, company leadership discussed the substantial progress Walgreens is making toward its vision to be the first choice in health and daily living in America – and beyond.

Wasson said, “With a strong foundation and the right strategies, structure and talent in place, and with many of last year’s headwinds becoming this year’s tailwinds, Walgreens is well-positioned to ensure its market leadership, growth and profitability well into the future on behalf of its customers and shareholders.”

Having reached new, multi-year agreements with pharmacy benefit managers Express Scripts, Optum Health and others, Walgreens is focused on three areas of opportunity ahead:

Delivering a complete Well Experience by transforming the customer experience across all of the company’s touch points, channels and formats
Transforming the role community pharmacy plays in health care by offering unparalleled access to innovative, high quality and affordable health and wellness services
Creating an unprecedented and efficient global platform through its strategic partnership with Alliance Boots GmbH

“We are taking a multi-pronged approach to delivering the Well Experience,” Wasson said. “We are combining leading-edge design with enhanced products and services, increased engagement with team members and customers, and an omni-channel approach that blends our brick-and-mortar stores with e-commerce and mobile commerce. We are deliberately blurring many retail channels to fit how consumers shop today.”

To that end, Walgreens has continued to expand its product offerings, including:

Expanded grocery items and fresh food in stores for on-the-go consumers with quick, convenient pickup, and a growing selection of healthy food choices that are important to underserved food desert communities.
Substantial investment continues in private brands, including Walgreens, Delish, Nice! and many more that have led to a 2 percentage points increase in private brand penetration year-over-year to 22 percent.
Enhanced beauty departments that now include an array of niche and prestige brands not found in traditional drugstores, including the introduction of Boots No7.
And mobile device capabilities that have expanded in the past year to include prescription refills and transfers by scanning the pill bottle; QuickPrints, an application that enables users to print photos directly from their devices to any Walgreens store; and in-store maps that allow customers to use a digital shopping list to map and locate items in a store.

Walgreens efforts to transform the role community pharmacy plays in health care begins with its pharmacists, who are seen more and more by patients as health care partners. Wasson said, “Walgreens pharmacists have administered more than 5 million flu shots in each of the past four years and today we are the largest retail provider of immunizations and vaccinations in the country, which validates that the public appreciates, wants and values what community pharmacy can do to support their health.”

Walgreens is expanding services available at its pharmacies and Take Care Clinics to include additional immunizations; chronic care management; primary care; Medicare wellness visits and member assessments; and health testing.

“With nearly 70 percent of the U.S. population either without a primary care physician or not utilizing one, and more than 30 million people gaining insurance coverage in 2014 under health care reform, we are well-positioned to fill the void in care,” Wasson said.

Throughout 2013 and beyond, Walgreens will be creating an unprecedented and efficient global platform through its strategic partnership with Alliance Boots. “We are bringing together two iconic brands with a lot in common,” Wasson said. “Boots is to Europe as Walgreens is to the U.S. In addition, with Alliance Boots bringing an integrated wholesale business to the table, we believe there is significant opportunity for supply chain efficiencies. The global pharmaceutical market continues to grow, particularly in emerging markets where there is increased demand for vaccines and self-medications. Together we are well-positioned for growth as we create the first global pharmacy-led, health and wellbeing enterprise.”

During the meeting, the company also reviewed key highlights and milestones over the past year. Walgreens generated record cash flow from operations of $4.4 billion and returned $1.9 billion to shareholders in the form of dividends and stock repurchases. That included the largest quarterly dividend in the company’s history and the 37^th consecutive year in which the company has raised its dividend.

In addition to closing on its first step in the strategic partnership with Alliance Boots, Walgreens also announced and later completed its acquisition of drugstore chain USA Drug in the mid-South region of the country, opened its 8,000^th store with a new location in Hollywood, Calif., and launched its Balance Rewards loyalty program which has seen more than 50 million people enroll since its introduction.

Wasson concluded, “During the last several years we have worked to transform the company from the great foundation that our predecessors gave us. With our three strategic growth objectives in place, Walgreens is now positioned extremely well for long-term growth.”

Nominees to Walgreens board of directors include:

David J. Brailer, MD, PhD, Chairman of Health Evolution Partners
Janice M. Babiak, former Partner at Ernst & Young
Steven A. Davis, Chairman and CEO of Bob Evans Farms Inc.
William C. Foote, Retired Chairman and CEO of USG Corporation
Mark P. Frissora, Chairman and CEO of The Hertz Corporation
Ginger L. Graham, President and CEO of Two Trees Consulting
Alan G. McNally, Retired Chairman and Chief Executive Officer of Harris Bank and Former Chairman of the Board of Walgreen Co.
Dominic Murphy, Partner at Kohlberg Kravis Roberts & Co.
Stefano Pessina, Executive Chairman of Alliance Boots GmbH
Nancy M. Schlichting, CEO of Henry Ford Health System
Alejandro Silva, Chairman and CEO of Evans Food Group, Inc.
James A. Skinner, Retired Vice Chairman and CEO of McDonald’s Corporation
Gregory D. Wasson, President and CEO of Walgreen Co.

Chairman Jim Skinner added, “I would like to offer special appreciation to David Schwartz, who has retired from the board after 12 years of service to Walgreens, and to Al McNally for his four years of service as lead director and non-executive chairman of the board. We are grateful that Walgreens will continue to benefit from Al’s leadership and vision on the board.

“I also want to welcome our two newest members, Stefano Pessina and Dominic Murphy, who joined our board following the launch of the strategic partnership between Walgreens and Alliance Boots.”

Ten of the 13 board members are independent, consistent with the requirement in the company’s governance guidelines that a majority of its board be independent.

Preliminary voting results were announced at the meeting. The final voting results on all agenda items will be disclosed in a Current Report on Form 8-K to be filed by Walgreens with the Securities and Exchange Commission after certification by the inspector of elections.

About Walgreens

As the nation's largest drugstore chain with fiscal 2012 sales of $72 billion, Walgreens (www.walgreens.com) vision is to become America’s first choice for health and daily living. Each day, Walgreens provides more than 6 million customers the most convenient, multichannel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice in communities across America. Walgreens scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with respiratory services. These services improve health outcomes and lower costs for payers including employers, managed care organizations, health systems, pharmacy benefit managers and the public sector. The company operates 8,061 drugstores in all 50 states, the District of Columbia and Puerto Rico. Take Care Health Systems is a Walgreens subsidiary that is the largest and most comprehensive manager of worksite health and wellness centers and in-store convenient care clinics, with more than 700 locations throughout the country.

Cautionary Note Regarding Forward-Looking Statements: Statements in this document that are not historical 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," "continue," "sustain," "on track," "believe," "seek," "estimate," "anticipate," "may," “possible,” "assume," and 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, the changes in vendor, payer and customer relationships and terms, competition, industry consolidation and the effects thereof, changes in economic and business conditions, risks associated with new business and business retention initiatives and activities, failure to obtain new contracts or extensions of existing contracts, risks associated with acquisitions and divestitures, the ability to realize anticipated results from capital expenditures and cost reduction initiatives, and outcomes of legal and regulatory matters. 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 date of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

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