Form 8-K

Contact: Michael Polzin

http://news.walgreens.com

@WalgreensNews

FOR IMMEDIATE RELEASE

facebook.com/Walgreens

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

On August 5, 2014, Walgreen Co. (the “Company” or “Walgreens”) entered into Amendment No. 1 to the Purchase and Option Agreement and the Walgreen Co. Shareholders Agreement (the “Amendment”), by and among the Company, Alliance Boots GmbH (“Alliance Boots”), a private limited liability company incorporated under the laws of Switzerland, AB Acquisitions Holdings Limited, a private limited liability company incorporated under the laws of Gibraltar (the “Seller”), Walgreen Scotland Investments LP, a limited partnership established in Scotland and an indirect wholly owned subsidiary of the Company (“Option Sub”), KKR Sprint (European II) Limited, KKR Sprint (2006) Limited, and KKR Sprint (KPE) Limited, each of which is an exempted limited company organized under the laws of the Cayman Islands, and Kohlberg Kravis Roberts & Co. L.P., a Delaware limited partnership (“KKR”), and Alliance Santé Participations S.A., a société anonyme organized under the laws of the Grand Duchy of Luxembourg and Stefano Pessina (“SP”), amending each of (x) the Purchase and Option Agreement, dated as of June 18, 2012, by and among Walgreens, Alliance Boots and the Seller (the “Purchase and Option Agreement”), and (y) the Walgreen Co. Shareholders Agreement, dated as of August 2, 2012, by and among Walgreens, SP, KKR Sprint (European II) Limited, KKR Sprint (2006) Limited and KKR Sprint (KPE) Limited, Alliance Santé Participations S.A., KKR and certain other investors party thereto (the “Company Shareholders Agreement”). The Purchase and Option Agreement and the Company Shareholders Agreement, as amended by the Amendment, are referred to herein as the “Amended Purchase and Option Agreement” and the “Amended Company Shareholders Agreement,” respectively.

Pursuant to the Amendment, the period during which Walgreens is permitted to exercise the call option (the “Call Option”) under the Purchase and Option Agreement to acquire from the Seller and certain related parties the remaining 55% of Alliance Boots that it does not currently own, in exchange for £3,133 million in cash, payable in British pounds sterling, and 144,333,468 shares of common stock, par value $0.078125, of Walgreens (“Walgreens Shares”) (subject to certain potential adjustments set forth in the Purchase and Option Agreement), has been accelerated to begin on August 5, 2014 and end on February 5, 2015 (the “Step 2 Acquisition”). On August 5, 2014, pursuant to the Amendment, Option Sub, an indirect wholly owned subsidiary of the Company to which the Company previously assigned its rights to the Call Option, exercised the Call Option.

Additionally, the Amendment provides, among other things, that, unless otherwise agreed to in writing by Walgreens and subject to the other terms and conditions of the Amended Purchase and Option Agreement, the closing of the Step 2 Acquisition (the “Second Step Closing”) will not take place prior to March 9, 2015.

Walgreens currently intends to also engage in a “holding company” reorganization transaction (the “Holdco Reorganization”) in connection with the consummation of the Step 2 Acquisition, to create a new public holding corporation, organized in the United States and named “Walgreens Boots Alliance, Inc.” (“Walgreens Boots Alliance” or “Holdco”), at a level above Walgreens in Walgreens’ corporate structure. In the event that the Holdco Reorganization is consummated, the shares ultimately received by the Seller and its related parties in respect of the Step 2 Acquisition would be common shares of Holdco. However, the Step 2 Acquisition will not be conditioned on the completion of the Holdco Reorganization and, subject to the satisfaction (or waiver) of the conditions to the Second Step Closing set forth in the Amended Purchase and Option Agreement, the Step 2 Acquisition will be completed even if the Holdco Reorganization is not completed for any reason.

The foregoing summary of the Amendment should be read together with the Company’s Current Reports on Form 8-K filed with the SEC on June 19, 2012 (upon entry into the Purchase and Option Agreement) and on August 6, 2012 (upon entry into the Company Shareholders Agreement). The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of (i) the Amendment filed as Exhibit 2.1 hereto and incorporated herein by reference, (ii) the Purchase and Option Agreement filed as Exhibit 2.1 to the Form 8-K filed on June 19, 2012 and incorporated herein by reference, and (iii) the Company Shareholders Agreement filed as Exhibit 4.1 to the Form 8-K filed on August 6, 2012 and incorporated herein by reference.

The representations, warranties and covenants of each party set forth in the Amendment, the Amended Purchase and Option Agreement and the Amended Company Shareholders Agreement have been made only for purposes of, were and are solely for the benefit of the parties to, the applicable agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to such agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. In addition, certain representations and warranties were made only as of the date of the applicable agreement or such other date as is specified in such agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the applicable agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Amendment, the Amended Purchase and Option Agreement and the Amended Company Shareholders Agreement are included with or referenced in this filing only to provide investors with information regarding the terms of those agreements, and not to provide investors with any other factual information regarding the parties, their respective affiliates or their respective businesses. The Amendment, the Amended Purchase and Option Agreement and the Amended Company Shareholders Agreement should not be read by themselves, but should be read in conjunction with the periodic and current reports and statements that the Company files with the SEC.

On August 5, 2014, the Company committed to a cost reduction initiative that includes a number of elements designed to help the Company to achieve profitable growth through increased cost efficiencies. These cost saving initiatives are expected to focus on store costs, field costs, distribution costs and corporate costs. The Company anticipates that aspects of this multi-faceted plan will result in one-time restructuring and other special charges as it is implemented over the next three fiscal years. At this time, the Company is not able to make a determination of the estimated amount or range of amounts to be incurred for each major type of cost nor the future cash expenditures or charges, including non-cash impairment charges (if any), it will incur. The Company will file an amendment to this report upon the determination of such amounts. The Company’s analysis is preliminary and therefore is subject to change. The actual amounts and timing may vary materially based on various factors. See “Cautionary Note Regarding Forward-Looking Statements” below.

The disclosures above in Item 2.05 of this Form 8–K relating to the cost reduction initiatives are incorporated by reference into this Item 2.06.

The proposed issuance of Walgreens Shares (or, if the Holdco Reorganization is completed, Holdco common shares) in connection with the Step 2 Acquisition described in Item 1.01 above, which is subject to the terms and conditions of the Amended Purchase and Option Agreement, has not been registered under the Securities Act of 1933 (the “Securities Act”), as amended, in reliance on the exemption from registration provided by Section 4(2) of the Securities Act and rules and regulations of the SEC promulgated thereunder. The offering with respect to such Step 2 Acquisition is being made to the sole shareholder of Alliance Boots pursuant to the Amended Purchase and Option Agreement. The disclosure regarding the Amendment and the Amended Purchase and Option Agreement under Item 1.01 above is incorporated in this Item 3.02 by reference.

In addition to issuing the press release described in Item 8.01 below, Walgreens also conducted a conference call and webcast on August 6, 2014 regarding the Step 2 Acquisition and related strategic, financial, management and operating plans and related matters. Slides prepared for purposes of the conference call and a transcript of the conference call are furnished as Exhibits 99.1 and 99.2 hereto, respectively, and are incorporated herein by reference.

The information included in Item 1.01 of this Form 8-K is incorporated by reference into this Item 8.01.

On August 6, 2014, Walgreen Co. issued a press release regarding the exercise of the Call Option, the Amendment, the Step 2 Acquisition, the Holdco Reorganization and related strategic, financial, management and operating plans and related matters. A copy of this press release is attached as Exhibit 99.3 hereto and is incorporated herein by reference.

The press release also announced that the Company’s Board of Directors had authorized a new $3 billion share repurchase program, which will expire August 31, 2016. The timing and amount of any common stock repurchases will be determined by management based on market conditions and other considerations, and may change at any time. Such repurchases may be effected in open market transactions, privately negotiated transactions, and/or pursuant to instruments and plans complying with the rules and regulations under the Securities Exchange Act of 1934, as amended.

The press release also announced that on August 5, 2014 the Company’s Board of Directors declared a quarterly cash dividend on the Company’s Common Stock and approved an increase in the quarterly dividend from 31.5 cents to 33.75 cents per share. The dividend of 33.75 cents per share is payable September 12, 2014 to shareholders of record as of the close of business on August 21, 2014.

Statements in this report that are not historical are forward-looking statements for purposes of applicable securities laws. 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: the risks that one or more closing conditions to the transactions may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions or that the required approvals by the Company’s shareholders may not be obtained; the risk of a material adverse change that the Company or Alliance Boots or either of their respective businesses may suffer as a result of disruption or uncertainty relating to the transactions; risks associated with changes in economic and business conditions generally or in the markets in which we or Alliance Boots participate; risks associated with new business areas and activities; risks associated with acquisitions, joint ventures, strategic investments and divestitures, including those associated with cross-border transactions; risks associated with governance and control matters; risks associated with the Company’s ability to timely arrange for and consummate financing for the contemplated transactions on acceptable terms; risks relating to the Company and Alliance Boots’ ability to successfully integrate our operations, systems and employees, realize anticipated synergies and achieve anticipated financial results, tax and operating results in the amounts and at the times anticipated; the potential impact of announcement of the transactions or consummation of the transactions on relationships and terms, including with employees, vendors, payers, customers and competitors; the amounts and timing of costs and charges associated with our optimization initiatives; our ability to realize expected savings and benefits in the amounts and at the times anticipated; changes in management’s assumptions; the risks associated with transitions in supply arrangements; risks that legal proceedings may be initiated related to the transactions; the amount of costs, fees, expenses and charges incurred by Walgreens and Alliance Boots related to the transactions; the ability to retain key personnel; changes in financial markets, interest rates and foreign currency exchange rates; the risks associated with international business operations; the risk of unexpected costs, liabilities or delays; changes in network participation and reimbursement and other terms; risks associated with the operation and growth of our customer loyalty program; risks associated with outcomes of legal and regulatory matters, and changes in legislation, regulations or interpretations thereof; and other factors described in Item 1A (Risk Factors) of our most recent Form 10-K and Form 10-Q, each of which is incorporated herein by reference, and in other documents that we file or furnish with the SEC. 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 filing, whether as a result of new information, future events, changes in assumptions or otherwise.

S-4 that will include a proxy statement of Walgreens that also constitutes a prospectus of Walgreens Boots Alliance. After the registration statement has been declared effective by the SEC, the definitive proxy statement/prospectus will be delivered to shareholders of Walgreens. INVESTORS AND SECURITY HOLDERS OF WALGREENS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Investors and security holders will be able to obtain free copies of the registration statement and the definitive proxy statement/prospectus (when available) and other documents filed with the SEC by Walgreens or Walgreens Boots Alliance through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Walgreens or Walgreens Boots Alliance will be available free of charge on Walgreens’ internet website at www.walgreens.com under the heading “Investor Relations” and then under the heading “SEC Filings” or by contacting Walgreen’s Investor Relations Department at (847) 315-2361.

Walgreens, Alliance Boots, Walgreens Boots Alliance and their respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies from the holders of Walgreens common stock in respect of the proposed transactions. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of proxies in favor of the proposed transactions will be set forth in the proxy statement/prospectus when it is filed with the SEC. You can find information about Walgreens’ directors and executive officers in Walgreens’ Annual Report on Form 10-K for the year ended August 31, 2013 and definitive proxy statement filed with the SEC on November 25, 2013. You can obtain free copies of these documents, which are filed with the SEC, from Walgreens using the contact information above.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

This AMENDMENT NO. 1, dated as of August 5, 2014 (this “Amendment”), to (i) the Purchase and Option Agreement, dated as of June 18, 2012 (the “Purchase Agreement”), is made by and among Walgreen Co., an Illinois corporation (“Buyer”), Alliance Boots GmbH, a private limited liability company incorporated under the laws of Switzerland, having its registered office at Untermattweg 8, 3027, Bern, Switzerland and registered in the Register of Commerce and Companies of the Canton of Bern under No. CH-170.4.007-953-1 (the “Company”), AB Acquisitions Holdings Limited, a private limited liability company incorporated under the laws of Gibraltar, having its registered office at 57/63 Line Wall Road, Gibraltar and registered under No. 98476 (the “Seller”) and Walgreen Scotland Investments LP, a limited partnership established in Scotland under the Limited Partnerships Act 1907 and an indirect wholly owned subsidiary of Buyer (“Walgreen Scotland”) and (ii) the Walgreen Co. Shareholders Agreement, dated as of August 2, 2012 (the “Buyer Shareholders Agreement”), is made by and among (x) the Buyer, (y) KKR Sprint (European II) Limited, KKR Sprint (2006) Limited, and KKR Sprint (KPE) Limited, each of which is an exempted limited company organized under the laws of the Cayman Islands, and Kohlberg Kravis Roberts & Co. L.P., a Delaware limited partnership (collectively, the “KKR Signatories”), and (z) Alliance Santé Participations S.A., a société anonyme organized under the laws of the Grand Duchy of Luxembourg and Stefano Pessina (collectively, the “SP Signatories”).

WHEREAS, Buyer, the Company and Seller (the “Purchase Agreement Parties”) have entered into the Purchase Agreement;

WHEREAS, pursuant to an Assignment, dated as of August 2, 2012, Buyer conveyed, assigned and transferred to Walgreen Scotland, and Walgreen Scotland accepted and assumed, Buyer’s rights to the Call Option, including the right to exercise the Call Option;

WHEREAS, Buyer, the KKR Signatories and the SP Signatories (the “Shareholders Agreement Parties”, and together with the Purchase Agreement Parties, the “Parties”) have entered into the Buyer Shareholders Agreement;

WHEREAS, subject to the terms and conditions set forth in this Amendment, and pursuant to Section 11.01(b) of the Purchase Agreement, the Purchase Agreement Parties and Walgreen Scotland desire to amend certain terms of the Purchase Agreement by entering into, and as set forth in, this Amendment; and

WHEREAS, subject to the terms and conditions set forth in this Amendment, and pursuant to Section 7.4 of the Buyer Shareholders Agreement, the Shareholders Agreement Parties desire to amend certain terms of the Buyer Shareholders Agreement by entering into, and as set forth in, this Amendment.

NOW THEREFORE, for and in consideration of the aforesaid premises and of the mutual representations, warranties and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be

legally bound, (i) the Purchase Agreement Parties and Walgreen Scotland hereby agree as set forth in Sections 1, 2, 3, 4 and 6 below and (ii) the Shareholders Agreement Parties hereby agree as set forth in Section 1, 2, 4, 5 and 6 below:

1. Modification; Full Force and Effect. Except as expressly modified and superseded by this Amendment, the terms and provisions of the Purchase Agreement and the Buyer Shareholders Agreement are and shall continue to be in full force and effect.

2. Definitions. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Purchase Agreement unless otherwise indicated.

3. Modifications to and Acknowledgements Under the Purchase Agreement; Option Exercise.

(a) Effectively immediately, the first sentence of Section 3.01 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:

“On any Business Day during the period beginning August 5, 2014 and ending February 5, 2015 (such period, or such other period as may be agreed by the Buyer and the Seller, the “Call Exercise Period”), the Buyer shall have the right, but not the obligation, to deliver a written notice to the Seller of its intent to purchase from the Seller and the MEP Trustee on behalf of the Managers the Second Step Company Shares (such notice, an “Exercise Notice”, and such right, the “Call Option”).”

(b) (i) (x) The Buyer hereby acknowledges and agrees that, simultaneously with the execution of this Amendment, each of the Seller and the Company has delivered its respective Bringdown Certificate to the Buyer as contemplated by and in accordance with Section 3.07(b) of the Purchase Agreement and (y) each of the Seller and the Company hereby acknowledges and agrees that, simultaneously with the execution of this Amendment, the Buyer has delivered its Bringdown Certificate to the Seller as contemplated by and in accordance with Section 3.07(a)(iv) of the Purchase Agreement.

(ii) Walgreen Scotland hereby exercises the Call Option by notifying the Seller in writing through and pursuant to this Section 3(b)(ii) of this Amendment of its intent to purchase from the Seller and the MEP Trustee on behalf of the Managers the Second Step Company Shares, and each of the Purchase Agreement Parties and Walgreen Scotland hereby acknowledges and agrees that this Section 3(b)(ii) of this Amendment constitutes the Exercise Notice, and that August 5, 2014 constitutes the Exercise Notice Date, in each case for all purposes hereunder and under the Purchase Agreement and the other Transaction Documents.

(iii) In accordance with and pursuant to Section 7.04 and Section 9.01(b) of the Purchase Agreement, the Buyer (i) hereby identifies the Consents set forth on Schedule I attached hereto for purposes of Section 7.04 of the Purchase Agreement and (ii) hereby identifies the Consents, filings and notices set forth on Schedule II attached hereto as Conditions Precedent to the Second Step Acquisition for purposes of Section 9.01(b) of the Purchase Agreement.

(c) Effectively immediately, each of Section 3.04 of, and the definition of “Debt Financing” in, the Purchase Agreement is hereby amended and restated in its entirety to read as follows:

Section 3.04 Second Step Closing Date and Place. The closing of the Second Step Acquisition (the “Second Step Closing”) shall take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, at 10:00 a.m., New York City time, on the fifth (5^th) Business Day following the satisfaction (or, to the extent permitted, the waiver in writing by each Party entitled to the benefit thereof under Article IX) of the conditions set forth in Article IX, other than any condition which by its nature is to be satisfied at the Second Step Closing (but in each case subject to the satisfaction (or, to the extent permitted, the waiver in writing by each Party entitled to the benefit thereof under Article IX) of such condition), or at such other place, time and date as may be agreed in writing by the Buyer and the Seller (such date, the “Second Step Closing Date”); provided, that notwithstanding the foregoing or anything to the contrary contained herein, unless otherwise agreed to in writing by the Buyer, in no event shall the Second Step Closing and Second Step Closing Date occur prior to March 9, 2015.

“Debt Financing” means any debt financing incurred by the Buyer or any of its Affiliates for purposes of consummating the Transactions, including, for the avoidance of doubt, any refinancings or “take-out” financings with respect thereto (subject to the 365-day limitation on the Seller’s and the Company’s obligations under Section 7.09 after the First Step Closing), and, with respect to the Second Step Acquisition, including any such debt financings for the purpose of refinancing or “taking-out” any or all (as determined by the Buyer in its sole discretion) of the existing Indebtedness of the AB Group.

(d) Effectively immediately, Section 7.02 of the Purchase Agreement is hereby amended by adding the following new sub-section (c) thereto:

“(c) Subject to Section 5.4(c) of the Shareholders Agreement and Applicable Law relating to the sharing of information, the Company agrees to, and the Seller agrees to use its reasonable best efforts to cause the Company and the other members of the AB Group to, from the Exercise Notice Date until the Second Step Closing Date, (i) provide, and to use its reasonable best efforts to cause the other members of the AB Group, and its and their respective Representatives, to provide, the Buyer and its Representatives reasonable access as the Buyer may reasonably request upon reasonable prior notice during normal business hours to (A) its and their respective assets, properties, books, Contracts, commitments, personnel, advisors and other Representatives and records and (B) such other information as the Buyer may reasonably request with respect to the Company and the other members of the AB Group, and their respective businesses, financial condition and operations, in each case in connection with the Buyer’s integration planning and/or implementation or transition planning and/or implementation; and (ii) cooperate, and to use its reasonable best efforts to cause its and their respective Representatives to cooperate, with the Buyer with respect to the foregoing, including providing such cooperation as the Buyer may reasonably request in connection with developing and/or implementing its integration or transition plans (including with respect to the consolidation system); provided that (1) the Buyer shall

have no right to perform invasive or subsurface investigations of any properties or facilities of the Company or any other member of the AB Group without the prior written consent of the Company and (2) nothing in this Agreement shall require the Company or any other member of the AB Group to disclose or provide access to any information to the Buyer that would reasonably be likely to (w) cause a loss of privilege to the Company or any of such member, (x) cause a material breach of an existing Contract (including with respect to confidentiality) of the Company or any of such member, (y) create an undue burden on or unreasonable interference with the business or operations of the Company or its Subsidiaries or any UK Holdings Group Member or (z) constitute a violation of Applicable Law, subject, in the case of clauses (w) through (z), to the Seller and the Company using reasonable efforts to, and cooperating with the Buyer in, developing and implementing reasonable alternative arrangements to provide the Buyer and its Representatives with the full benefit of this Section 7.02 without causing, creating or constituting any such loss, breach, burden, interference or violation, as applicable; provided, further, that no investigation of the Company’s or any such AB Group member’s business shall affect any representation or warranty given by the Company or the Seller hereunder, in the Company Disclosure Schedule or the Seller Disclosure Schedule or in any certificate delivered in accordance herewith, or otherwise limit or affect the remedies available under this Agreement to the Buyer. In the event that there is any dispute with respect to the scope of this Section 7.02(c) or the access to be provided or the cooperation due hereunder, such dispute shall be referred to SP, or his successor as the Executive Chairperson of the Company, and Gregory D. Wasson, or his successor as Chief Executive Officer of the Buyer, for immediate resolution with a view to expediting the development and implementation of the integration and transition plans.”

4. Representations and Warranties. Each Party represents and warrants to each other Party that: (i) such Party is duly organized, validly existing and, where such concept is applicable, in good standing under the Applicable Laws of its jurisdiction of incorporation or organization, with all requisite power and authority to own its properties and to conduct its business as currently conducted, except for those jurisdictions in which the failure to have such power or authority or to be so organized, validly existing or in good standing has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the ability of such Party to complete the transactions contemplated hereby or perform its obligations hereunder; (ii) such Party has the requisite power and authority to execute this Amendment, to perform its obligations hereunder and to consummate the transactions contemplated hereby; (iii) the execution, delivery and performance by such Party of this Amendment and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate or analogous actions; and (iv) such party has duly executed and delivered this Amendment and, assuming the due authorization, execution and delivery by each other Party, this Amendment constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and general principles of equity (whether considered in a Proceeding at law or in equity). Each of the KKR Signatories represents and warrants to the Buyer that the KKR Signatories represent the KKR Investors Beneficially Owning a majority of the Total Voting Power Beneficially Owned by all KKR Investors (as such terms are defined in the Buyer Shareholders Agreement) as of the date hereof. Each of the SP Signatories represents and

warrants to the Buyer that the SP Signatories represent the SP Investors Beneficially Owning a Majority of the Total Voting Power Beneficially Owned by all SP Investors (as such terms are defined in the Buyer Shareholders Agreement) as of the date hereof. Each of the KKR Signatories and the SP Signatories represents and warrants to the Buyer that the SP Signatories and the KKR Signatories together represent Investors Beneficially Owning a Majority of the Total Voting Power Beneficially Owned by all Investors (as such terms are defined in the Buyer Shareholders Agreement) as of the date hereof.

(a) Effective immediately, the Shareholders Agreement Parties hereby amend Section 2.1(a) of the Buyer Shareholders Agreement by deleting the final sentence thereof and inserting in its place the following:

“Each KKR Investor and each Other Investor (other than the Other MEP Investors) hereby further agrees that, notwithstanding anything to the contrary contained herein, including Article V, other than solely in the case of a Permitted Transfer, it shall not Transfer any First Step Walgreen Shares (whether or not such First Step Walgreen Shares were originally Beneficially Owned by such Investor as of the First Step Closing) during the period beginning on (x) the Exercise Notice Date (as defined in the Purchase Agreement), in the case of any such KKR Investor and (y) the two month anniversary of the Exercise Notice Date, in the case of any such Other Investor, and ending on the earlier of (A) the Second Step Closing or (B) the date on which the Purchase Agreement terminates in accordance with its terms without the Second Step Closing having occurred (such period, the “Pre-Second Step Restricted Period”).”

6. Miscellaneous. The provisions of Article XI of the Purchase Agreement shall apply mutatis mutandis to this Amendment (other than Section 5 and, to the extent pertaining to the Buyer Shareholders Agreement, Section 4, to which the provisions of Article VII of the Buyer Shareholders Agreement shall apply mutatis mutandis).

IN WITNESS WHEREOF, the Parties have each caused this Amendment to be signed as of the date first written above.


ALLIANCE BOOTS GMBH

By:	/s/ Stefano Pessina
	Name:	Stefano Pessina
	Title:	Director

By:	/s/ Ornella Barra
	Name:	Ornella Barra
	Title:	Chief Executive, Wholesale and Brands

AB ACQUISITIONS HOLDINGS LIMITED

By:	/s/ Stefano Pessina
	Name:	Stefano Pessina
	Title:	Director

By:	/s/ Ornella Barra
	Name:	Ornella Barra
	Title:	Director

WALGREEN CO.

By:	/s/ Gregory D. Wasson
	Name:	Gregory D. Wasson
	Title:	President and Chief Executive Officer

WALGREEN SCOTLAND INVESTMENTS LP

By:	WALGREEN INTERNATIONAL INVESTMENTS LLC, its General Partner

By:	WALGREEN INVESTMENTS CO, its Sole Member

By:	/s/ Joseph H. Greenberg
	Name:	Joseph H. Greenberg
	Title:	President

[Signature Page to Amendment No. 1 to the Purchase and Option Agreement and Walgreen Co. Shareholders Agreement]

Certain

statements

and

projections

future

results

made

these

presentations

constitute

forward-looking

statements

that

are

based

current

market,

competitive

and

regulatory

expectations

that

involve

risk

and

uncertainty

that

could

cause

results

vary

materially.

Except

the

extent

required

the

law,

undertake

obligation

update

publicly

any

forward-looking

statement

after

these

presentations,

whether

result

new

information,

future

events,

changes

assumptions

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

Title

Name

President & CEO, Walgreens Boots Alliance, Inc.

Greg Wasson

Executive Vice Chairman, Strategy & New Market Development

Stefano Pessina

EVP, Walgreens Boots Alliance,

President & Chief Executive, Global Wholesale & International Retail

Ornella Barra

EVP, Walgreens Boots Alliance,

President of Pharma & Global Market Access

Jeff Berkowitz

EVP, Walgreens Boots Alliance, President, Walgreens

Alex Gourlay

EVP and Chief Financial Officer, Walgreens Boots Alliance

Tim McLevish

EVP, Walgreens Boots Alliance, President, Global Brands

Ken Murphy

EVP, Walgreens Boots Alliance, President, Boots

Simon Roberts

EVP, Global Chief Legal & Administrative Officer, Walgreens Boots Alliance

Tom Sabatino

EVP & Global Chief Information Officer, Walgreens Boots Alliance

Tim Theriault

EVP & Global Chief Human Resource Officer, Walgreens Boots Alliance

Kathleen Wilson-Thompson

Blended Management Team

Invest in Core

Business

Pursue Strategic

Opportunities

Return Cash To

Shareholders

Maintain Strong

Balance Sheet and

Financial Flexibility

Investing across core businesses at suitable returns to drive organic growth

Balanced and disciplined approach to capital allocation

Returning cash to shareholders through dividends and share repurchases

Pursuing strategic opportunities, including mergers and acquisitions, that

are consistent with our strategy, meet return requirements, and are

accretive and drive long-term growth

Commitment to 30%-35% long-term dividend payout ratio

Increased quarterly dividend per share by 7.1% to $0.3375 per share

Pursue share repurchases with excess capacity

Capital Allocation Priorities

Commitment to solid investment grade credit ratings

Capital Structure

$3 billion repurchase program effective immediately through end of

Fiscal Year 2016

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. 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. The supplemental non-GAAP financial measures presented

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.

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

Net sales (GAAP)

$ 16,364

$ 16,987

$ 17,199

$ 16,870

$ 17,344

$ 18,502

$ 18,371

$ 17,967

Gross profit (GAAP)

$ 4,538

$ 4,897

$ 4,749

$ 4,792

$ 4,945

$ 5,324

$ 5,154

$ 5,069

LIFO provision

Adjusted gross profit (Non-GAAP)

$ 4,572

$ 4,924

$ 4,767

$ 4,853

$ 4,987

$ 5,380

$ 5,204

$ 5,129

YOY Change

Gross profit $ (GAAP)

$ 387

$ 240

$ 290

$ 446

$ 407

$ 427

$ 405

$ 277

Gross profit % (GAAP)

9.0%

8.7%

8.5%

5.8%

Gross profit % 2-year stack (GAAP)

Adjusted gross profit $ (Non-GAAP)

$ 378

$ 218

$ 276

$ 459

$ 415

$ 456

$ 437

$ 276

Adjusted gross profit % (Non-GAAP)

9.1%

9.3%

9.2%

5.7%

Adjusted gross profit % 2-year stack

(Non-GAAP)

Gross profit margin (GAAP)

28.4%

28.5%

28.8%

28.1%

28.2%

Year over year basis point impact

(GAAP)

-0.2%

Adjusted gross profit margin

(Non-GAAP)

28.8%

29.1%

28.3%

28.5%

Adjusted year over year basis point

impact (Non-GAAP)

-0.3%

Reconciliation of Adjusted Gross Profit & Margin

$ in Millions

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

Net sales (GAAP)

$ 18,157

$ 18,651

$ 17,752

$ 17,073

$ 17,316

$ 18,647

$ 18,313

$ 17,941

Gross profit (GAAP)

$ 5,104

$ 5,389

$ 5,014

$ 4,835

$ 5,099

$ 5,607

$ 5,222

$ 5,191

LIFO provision

132

120

(8)

Adjusted gross profit (Non-GAAP)

$ 5,149

$ 5,461

$ 5,074

$ 4,967

$ 5,154

$ 5,679

$ 5,342

$ 5,183

YOY Change

Gross profit $ (GAAP)

$ 159

$ 65

$ (140)

$ (234)

$ (5)

$ 218

$ 208

$ 356

Gross profit % (GAAP)

3.2%

1.2%

-2.7%

-4.6%

-0.1%

4.0%

4.1%

7.4%

Gross profit % 2-year stack (GAAP)

12.2%

9.9%

5.8%

1.2%

3.1%

5.2%

1.4%

2.8%

Adjusted gross profit $ (Non-GAAP)

$ 162

$ 81

$ (130)

$ (162)

$ 5

$ 218

$ 268

$ 216

Adjusted gross profit % (Non-

GAAP)

3.2%

1.5%

-2.5%

-3.2%

0.1%

4.0%

5.3%

4.3%

Adjusted gross profit % 2-year stack

(Non-GAAP)

12.3%

10.8%

6.7%

2.5%

3.3%

5.5%

2.8%

1.1%

Gross profit margin (GAAP)

28.1%

28.9%

28.2%

28.3%

29.4%

30.1%

28.5%

28.9%

Year over year basis point impact

(GAAP)

-0.4%

0.1%

1.30%

1.2%

0.3%

0.6%

Adjusted gross profit margin

(Non-GAAP)

28.4%

29.3%

28.6%

29.1%

29.8%

30.5%

29.2%

28.9%

Adjusted year over year basis point

impact (Non-GAAP)

-0.4%

0.2%

0.3%

0.6%

1.40%

1.2%

0.6%

-0.2%

Reconciliation of Adjusted Gross Profit & Margin

$ in Millions

1Q14

2Q14

3Q14

Net sales (GAAP)

$ 18,329

$ 19,605

$ 19,401

Gross profit (GAAP)

$ 5,152

$ 5,650

$ 5,440

LIFO provision

Organizational Efficiency Costs

Adjusted gross profit (Non-GAAP)

$ 5,215

$ 5,701

$ 5,481

YOY Change

Gross profit $ (GAAP)

$ 53

$ 43

$ 218

Gross profit % (GAAP)

1.0%

0.8%

4.2%

Gross profit % 2-year stack (GAAP)

0.9%

4.8%

8.3%

Adjusted gross profit $ (Non-GAAP)

$ 61

$ 22

$ 139

Adjusted gross profit % (Non-

GAAP)

1.2%

0.4%

2.6%

Adjusted gross profit % 2-year stack

(Non-GAAP)

1.3%

4.4%

7.9%

Gross profit margin (GAAP)

28.1%

28.8%

28.1%

Year over year basis point impact

(GAAP)

-1.3%

-0.4%

Adjusted gross profit margin

(Non-GAAP)

28.5%

29.1%

28.3%

Adjusted year over year basis point

impact (Non-GAAP)

-1.3%

-1.4%

-0.9%

Reconciliation of Adjusted Gross Profit & Margin

$ in Millions

4Q08

1Q09

2Q09

3Q09

4Q09

Selling general and administrative

expenses (GAAP)

$ 3,324

$ 3,482

$ 3,627

$ 3,613

$ 3,644

Acquisition-related amortization

Alliance Boots transaction costs

Adjusted selling general and

administrative expenses

(Non-GAAP)

$ 3,298

$ 3,447

$ 3,592

$ 3,575

$ 3,604

YOY Change

Selling

general

and

administrative

expenses $ (GAAP)

$ 320

Selling

general

and

administrative

expenses % (GAAP)

9.6%

Selling general and administrative

expenses % 2-year stack (GAAP)

Adjusted selling general and

administrative expenses $

(Non-GAAP)

$ 306

Adjusted selling general and

administrative expenses %

(Non-GAAP)

9.3%

Adjusted selling general and

administrative expenses % 2-year

stack (Non-GAAP)

Reconciliation of Adjusted SG&A

$ in Millions

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

Selling general and administrative

expenses (GAAP)

$ 3,741

$ 3,811

$ 3,920

$ 4,046

$ 4,004

$ 4,117

$ 4,203

$ 4,237

Acquisition-related amortization

Alliance Boots transaction costs

Adjusted selling general and

administrative expenses

(Non-GAAP)

$ 3,702

$ 3,773

$ 3,868

$ 3,993

$ 3,952

$ 4,071

$ 4,149

$ 4,170

YOY Change

Selling general and administrative

expenses $ (GAAP)

$ 259

$ 184

$ 307

$ 402

$ 263

$ 306

$ 283

$ 191

Selling general and administrative

expenses % (GAAP)

7.4%

5.1%

8.6%

11.0%

7.0%

8.0%

7.2%

4.8%

Selling general and administrative

expenses % 2-year stack (GAAP)

20.6%

14.4%

13.1%

15.8%

Adjusted selling general and

administrative expenses $

(Non-GAAP)

$ 255

$ 181

$ 293

$ 389

$ 250

$ 298

$ 281

$ 177

Adjusted selling general and

administrative expenses %

(Non-GAAP)

7.4%

5.0%

8.2%

10.8%

6.8%

7.9%

7.3%

4.4%

Adjusted selling general and

administrative expenses % 2-year

stack (Non-GAAP)

20.1%

14.2%

12.9%

15.5%

15.2%

Reconciliation of Adjusted SG&A

$ in Millions

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

Selling general and administrative

expenses (GAAP)

$ 4,204

$ 4,284

$ 4,141

$ 4,249

$ 4,398

$ 4,497

$ 4,362

$ 4,286

Acquisition-related amortization

Acquisition-related costs

Hurricane Sandy

DEA Settlement Costs

Organizational Efficiency costs

Adjusted selling general and

administrative expenses (Non-GAAP)

$ 4,144

$ 4,223

$ 4,058

$ 4,129

$ 4,248

$ 4,401

$ 4,240

$ 4,189

YOY Change

Selling general and administrative

expenses $ (GAAP)

$ 200

$ 167

$ (62)

$ 12

$ 194

$ 213

$ 221

$ 37

Selling general and administrative

expenses % (GAAP)

5.0%

4.0%

-1.6%

0.2%

4.6%

5.0%

5.3%

0.9%

Selling general and administrative

expenses % 2-year stack (GAAP)

12.0%

5.6%

5.0%

9.6%

9.0%

3.7%

1.1%

Adjusted selling general and

administrative expenses $ (Non-GAAP)

$ 192

$ 152

$ (91)

$ (41)

$ 104

$ 178

$ 182

$ 60

Adjusted selling general and

administrative expenses %(Non-GAAP)

4.9%

3.7%

-2.2%

-1.0%

2.5%

4.2%

4.5%

1.5%

Adjusted selling general and

administrative expenses % 2-year stack

(Non-GAAP)

11.7%

11.6%

5.1%

3.4%

7.4%

7.9%

2.3%

0.5%

Reconciliation of Adjusted SG&A

$ in Millions

1Q14

2Q14

3Q14

Selling general and administrative

expenses (GAAP)

$ 4,379

$ 4,569

$ 4,551

Acquisition-related amortization

Acquisition-related costs

Hurricane Sandy

DEA Settlement Costs

Store Closures and other optimization

costs

Adjusted selling general and

administrative expenses (Non-GAAP)

$ 4,265

$ 4,477

$ 4,361

YOY Change

Selling general and administrative

expenses $ (GAAP)

$ (19)

$ 72

$ 189

Selling general and administrative

expenses % (GAAP)

(0.4%)

1.6%

4.3%

Selling general and administrative

expenses % 2-year stack (GAAP)

4.2%

6.6%

9.6%

Adjusted selling general and

administrative expenses $ (Non-GAAP)

$ 17

$ 76

$ 121

Adjusted selling general and

administrative expenses %(Non-GAAP)

0.4%

1.7%

2.9%

Adjusted selling general and

administrative expenses % 2-year stack

(Non-GAAP)

2.9%

5.9%

7.4%

Reconciliation of Adjusted SG&A

$ in Millions

Operating

Income

(GAAP)

Acquisition

Costs

Hurricane

Sandy

Acquisition

Amortization

LIFO

Provision

DEA

Settlement

Costs

Alliance

Boots Fair

Value of

Warrant

Adjustment

Gain on WHI

Sale

Organizational

Efficiency Costs

Adjusted

Operating

Income (Non-

GAAP)

Fiscal 2010

797

870

1,086

1,151

829

899

746

860

Full Year

3,458

182

140

3,780

Fiscal 2011

941

1,035

1,207

1,309

951

1,055

1,266

(434)

959

Full Year

4,365

219

208

(434)

4,358

Fiscal 2012

900

1,005

1,105

1,238

873

1,016

586

132

838

Full Year

3,464

255

309

4,097

Fiscal 2013

705

924

1,215

110

(20)

1,398

991

120

1,249

1,029

(8)

(34)

1,103

Full Year

3,940

373

239

(34)

(20)

4,674

Reconciliation of Adjusted Operating Income

$ in Millions

Net

Earnings

(GAAP)

Acquisition

Costs

Hurricane

Sandy

Acquisition

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 2010

489

534

669

710

463

550

470

543

Full Year

2,091

116

2,337

Fiscal 2011

580

639

739

802

603

670

792

(273)

599

Full Year

2,714

138

131

(273)

2,710

Fiscal 2012

554

619

683

767

537

628

353

553

Full Year

2,127

161

195

2,565

Fiscal 2013

413

553

756

(13)

915

624

(48)

812

657

(5)

(62)

702

Full Year

2,450

241

151

(13)

(110)

124

2,982

Reconciliation of Adjusted Net Earnings

$ in Millions

Diluted

EPS

(GAAP)

Acquisition

Costs

Alliance

Boots Share

Issuance

Effect

Hurricane

Sandy

Acquisition

Amortization

LIFO

Provision

Fair Market

Value of

warrants

Adjustment

Gain

on WHI

Sale

DEA

Settlement

Costs

Medicare

Part D

Efficiency

Costs

Alliance

Boots

Tax

Adjusted

Diluted

EPS (Non-

GAAP)

Fiscal 2010

0.49

0.03

0.02

0.54

0.68

0.02

0.72

0.47

0.03

0.02

0.04

0.56

0.49

0.03

0.04

0.56

Full Year

2.12

0.12

0.09

0.04

2.37

Fiscal 2011

0.62

0.03

0.68

0.80

0.03

0.04

0.87

0.65

0.04

0.03

0.72

0.87

0.05

0.04

(0.30)

0.66

Full Year

2.94

0.15

0.14

(0.30)

2.93

Fiscal 2012

0.63

0.05

0.03

0.71

0.78

0.05

0.88

0.62

0.01

0.05

0.04

0.72

0.39

0.08

0.01

0.05

0.10

0.63

Full Year

2.42

0.09

0.02

0.18

0.22

2.93

Fiscal 2013

0.43

0.02

0.03

0.06

0.04

0.58

0.79

0.01

0.08

0.05

(0.01)

0.04

0.96

0.65

0.02

0.05

0.08

(0.05)

0.05

0.85

0.69

0.01

0.05

(0.01)

(0.06)

0.01

0.04

0.73

Full Year

2.56

0.06

0.03

0.25

0.16

(0.12)

(0.01)

0.05

0.01

0.13

3.12

Reconciliation of Adjusted Diluted EPS

Organiza-

tional

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Cash Flow from

Operations (GAAP)

$312

$1,428

$1,519

$852

$1,168

$595

$1,056

$925

Capital

Expenditures

(GAAP)

(638)

(454)

(442)

(393)

(304)

(220)

(262)

(228)

Free Cash Flow

(Non-GAAP)*

($326)

$974

$1,077

$459

$864

$375

$794

$697

Reconciliation of Free Cash Flow

$ in Millions

*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

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

measure

that

provides

supplemental

information

our

entire

statements

cash

flows.

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

Cash Flow

from

Operations

(GAAP)

$1,165

$886

$1,230

$362

$809

$1,007

$1,847

$768

$601

$1,198

$1,379

$1,123

Capital

Expenditures

(GAAP)

(273)

(196)

(230)

(514)

(419)

(304)

(379)

(448)

(336)

(245)

(293)

(338)

Free Cash

Flow (Non-

GAAP)*

$892

$690

$1,000

($152)

$390

$703

$1,468

$320

$265

$953

$1,086

$785

$ in Millions

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

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

measure

that

provides

supplemental

information

our

entire

statements

cash

flows.

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

Total LIFO Inventory

$8,231

$7,347

$7,004

$7,036

$7,821

$7,253

$6,881

$6,852

$7,729

$7,213

$6,439

YOY % Change

4.1%

(3.4%)

(7.3%)

(12.5%)

(5.0%)

(1.3%)

(1.8%)

(2.6%)

(1.2%)

(0.6%)

(6.4%)

LIFO Reserve

1,633

1,704

1,764

1,897

1,952

2,024

2,144

2,136

2,194

2,246

2,286

Total FIFO Inventory

$9,864

$9,051

$8,768

$8,933

$9,773

$9,277

$9,025

$8,988

$9,923

9,459

8,725

YOY % Change

5.7%

(0.4%)

(3.4%)

(7.3%)

(0.9%)

2.5%

2.9%

0.6%

1.5%

2.0%

(3.3%)

# of Drugstores

7,812

7,841

7,890

7,930

8,058

8,072

8,097

8,116

8,200

8,210

8,217

LIFO Inventory per

Drugstore (000’s)

1,054

937

888

887

971

899

850

844

943

879

784

YOY % Change

1.9%

(5.3%)

(9.3%)

(14.4%)

(7.9%)

(4.1%)

(4.3%)

(4.8%)

(2.9%)

(2.2%)

(7.8%)

FIFO Inventory per

Drugstore (000’s)

1,263

1,154

1,111

1,126

1,213

1,149

1,115

1,107

1,210

1,152

1,062

YOY % Change

3.6%

(2.3%)

(5.6%)

(9.3%)

(4.0%)

(0.4%)

0.4%

(1.7%)

(0.2%)

0.3%

(4.8%)

$ in Millions except as indicated

Reconciliation of FIFO Inventory

Certain Definitions & Assumptions

CERTAIN

ASSUMPTIONS:

Unless

the

context

otherwise

indicates

requires:

•

All figures assume constant currency and current management assumptions regarding future interest rates.

•

References to the combined company and pro forma combined financial and other information assume

closing of Step 2 in

the first calendar quarter of 2015;

•

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

from

operations

before

amortization

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,

comprised

the Group statements of financial position at March 31, 2014 and

2013, and the related Group income statements, Group

statements of comprehensive income, Group statements of changes in equity and Group statements of cash flows for each

of the years in the three-year period ended March 31, 2014, were filed as Exhibit 99.1 to the Walgreen Co. Form 8-K filed on

May 15, 2014. 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

reference

the

full

text

the

agreements,

copies

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 , September 13, 2012, May 15, 2013 May 15, 2014, and

August 6, 2014.

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 and Schedule 13D filing on April 15, 2014.

Cautionary Note Regarding Forward-Looking Statements

Cautionary Note Regarding Forward-Looking Statements. Statements in these materials and the accompanying presentation and

remarks that are not historical are forward-looking statements for purposes of applicable securities laws. 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: the risks that one or more closing conditions to the transactions may not be

satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for

the consummation of the transactions or that the required approvals by the Company’s shareholders may not be obtained; the risk of a

material adverse change that the Company or Alliance Boots or either of their respective businesses may suffer as a result of disruption

or uncertainty relating to the transactions; risks associated with changes in economic and business conditions generally or in the markets

in which we or Alliance Boots participate; risks associated with new business areas and activities; risks associated with acquisitions, joint

ventures, strategic investments and divestitures, including those associated with cross-border transactions; risks associated with

governance and control matters; risks associated with the Company’s ability to timely arrange for and consummate financing for the

contemplated transactions on acceptable terms; risks relating to the Company and Alliance Boots’ ability to successfully integrate our

operations, systems and employees, realize anticipated synergies and achieve anticipated financial results, tax and operating results in

the amounts and at the times anticipated; the potential impact of announcement of the transactions or consummation of the transactions

on relationships and terms, including with employees, vendors, payers, customers and competitors; the amounts and timing of costs and

charges associated with our optimization initiatives; our ability to realize expected savings and benefits in the amounts and at the times

anticipated; changes in management’s assumptions; the risks associated with transitions in supply arrangements; risks that legal

proceedings may be initiated related to the transactions; the amount of costs, fees, expenses and charges incurred by Walgreens and

Alliance Boots related to the transactions; the ability to retain key personnel; changes in financial markets, interest rates and foreign

currency exchange rates; the risks associated with international business operations; the risk of unexpected costs, liabilities or delays;

changes in network participation and reimbursement and other terms; risks associated with the operation and growth of our customer

loyalty program; risks associated with outcomes of legal and regulatory matters, and changes in legislation, regulations or interpretations

thereof; and other factors described in Item 1A (Risk Factors) of our most recent Form 10-K and Form 10-Q, each of which is

incorporated herein by reference, and in other documents that we file or furnish with the SEC. 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 presentation, whether

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

Cautionary Note Regarding Forward-Looking Statements

Important Information for Investors and Shareholders

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of

any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale

would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of

securities

shall

made

except

means

prospectus

meeting

the

requirements

Section

the

Securities

Act

1933, as amended. In connection with the proposed transaction between Walgreens and Alliance Boots, Walgreens Boots

Alliance will file with the Securities and Exchange Commission (SEC) a registration statement on Form S-4 that will include

a proxy statement of Walgreens that also constitutes a prospectus of Walgreens Boots Alliance. After the registration

statement

has

been

declared

effective

the

SEC,

the

definitive

proxy

statement/prospectus

will

delivered

shareholders of Walgreens. INVESTORS AND SECURITY HOLDERS OF WALGREENS ARE URGED TO READ THE

DEFINITIVE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO)

AND OTHER DOCUMENTS RELATING TO THE TRANSACTION THAT WILL BE FILED WITH THE SEC CAREFULLY

AND

THEIR

ENTIRETY

WHEN

THEY

BECOME

AVAILABLE

BECAUSE

THEY

WILL

CONTAIN

IMPORTANT

INFORMATION

ABOUT

THE

PROPOSED

TRANSACTION.

Investors

and

security

holders

will

able

obtain

free

copies of the registration statement and the definitive proxy statement/prospectus (when available) and other documents

filed

with

the

SEC

Walgreens

Boots

Alliance

through

the

website

maintained

the

SEC

www.sec.gov.

Copies of the documents filed with the SEC by Walgreens or Walgreens Boots Alliance will be available free of charge on

Walgreens’

internet

website

www.walgreens.com

under

the

heading

“Investor

Relations”

and

then

under

the

heading

“SEC Filings”

or by contacting Walgreen’s Investor Relations Department at (847) 315-2500.

Participants in the Solicitation

Walgreens, Alliance Boots and their respective directors, executive officers and certain other members of management

and employees may be deemed to be participants in the solicitation of proxies from the holders of Walgreens common

stock in respect of the proposed transaction. Information regarding the persons who are, under the rules of the SEC,

participants in the solicitation of proxies in favor of the proposed transaction will be set forth in the proxy

statement/prospectus

when

filed

with

the

SEC.

You

can

find

information

about

Walgreens’

directors

and

executive

officers in Walgreens’

Annual Report on Form 10-K for the year ended August 31, 2013 and definitive proxy statement filed

with

the

SEC

November

25,

2013.

You

can

obtain

free

copies

these

documents,

which

are

filed

with

the

SEC,

from

Walgreens using the contact information above.

Good day, ladies and gentlemen, and welcome to the Walgreens Alliance Boots investor call.

As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference. Rick Hans, you may begin.

Thank you, Nicole, and good morning, everyone. Welcome to our conference call regarding our strategic partnership with Alliance Boots. Today, Greg Wasson, President and CEO, and Stefano Pessina, Alliance Boots Executive Chairman, will discuss the exercise of our option to complete the second step of our strategic partnership and fully combined our two companies. They will also discuss a number of decisions related to moving forward with step two. Also joining us on the call is Walgreens’ new Executive Vice President and Chief Financial Officer, Tim McLevish. Tim will not be taking any questions today.

As a reminder, today’s presentation includes certain non-GAAP financial measures. I direct you to our website at www.investor.Walgreens.com for disclosures regarding the most directly comparable GAAP measures and related information. You can find a link to our webcast on our investor relations website. After the call, this presentation and a podcast will be archived on our website for 12 months.

Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on current market competitive and regulatory expectations that involve risk and uncertainty that could cause actual results to vary materially. Except to the extent required by law, we undertake no obligation to update publicly any forward-looking statement after this presentation whether as a result of new information, future events, changes in assumptions, or otherwise. Please see our latest Form 10-K and 10-Q filings and subsequent exchange act filings for a discussion of risk factors as they relate to forward-looking statements. Now, I will turn the call over to Greg.

Thank you, Rick, and good morning, everyone. Thank you for joining us on this very important call. We will take a little more time than usual because we have a lot of ground to cover today. Before I start, let me first offer my thanks and farewell to our departing Chief Financial Officer, Wade Miquelon, as me moves on to pursue a number of new opportunities. As most of you know, Wade contributed to the establishment of our partnership with Alliance Boots and our strategic long-term relationship with AmerisourceBergen. Appreciate that Wade will continue to assist the Company with the transition.

I’d also like to welcome Tim McLevish, our new Executive Vice President and Chief Financial Officer, who we just announced was joining Walgreens. Tim brings us extensive US and global experience in finance and business strategy. He has guided a number of successful mergers and acquisitions through the integration process creating exceptional value for shareholders along the way. He also has a history of strong cost control and financial discipline, and this experience will be critical as we move forward. Tim, would you like to say a few words?

Sure. Good morning, everyone. Thanks for the kind introduction, Greg. It is my great privilege to join such an iconic Company especially at this exciting and pivotal time as Walgreens expands to become a global enterprise. I’d very much appreciate the opportunity to help the team achieve the Company’s important mission and carry out their remarkable vision to expand health and well-being across America and around the world for the benefit of customers, patients, healthcare partners, and shareholders. I look forward to meeting you all in the coming months, and with that, I will turn the call back to Greg.

Two years ago, Stefano and I stood together and set forth a bold vision to create the first global, pharmacy-led health and well-being enterprise in the world. We shared a goal to combine two leading Companies with iconic brands, complementary geographic footprints, shared values, and a heritage of trusted healthcare services dating back more than 100 years each. Our vision had a compelling strategic rationale giving us complementary capabilities and assets, substantial synergy potential, revenue and profit diversification, and a platform for future growth.

We imagined creating a new international leader in retail pharmacy with an unparalleled portfolio of retail and business brands, a network of more than 11,000 stores in 10 countries, more than 92,000 healthcare service providers, and the world’s largest pharmaceutical wholesale and distribution network with 370 distribution centers serving some 180,000 pharmacies, health centers, and hospitals in 20 countries.

We launched this vision in June, 2012 with the first step in a unique two-step transaction designed to bring our companies together over time while creating significant shareholder value along the way. Today, pending shareholder and regulatory approval, we are ready to move forward to complete step two in our strategic partnership fully combining our companies and realize the vision we share. This is truly an exciting day for Walgreens and Alliance Boots as together we create a new kind of global health care leader. We also believe this is an important day for our customers, stakeholders, and you, our shareholders, as we expand globally to make quality healthcare more affordable and accessible to communities in America and around the world.

On this call today, I will begin by covering three main areas. First, I will touch on the transaction itself. Second, I will walk through a number of key decisions related to moving forward with the merger including the timing of the transaction as well as the blended senior management team and the domicile of the fully combined Company. Third, I will look ahead at our three-year next chapter plan that will maximize the scope and scale of the new combined Company and sets new strategic goals. Then, I will turn to Stefano to talk about the full combination of our companies and his leadership role in the new enterprise.

Starting with an overview of today’s announcement, as you know, we launched our strategic partnership in 2012 with Walgreens initial 45% investment stake in Alliance Boots. That transaction included an option to proceed to a full combination by acquiring the remaining 55% of Alliance Boots in three-years’ time. The terms of our original deal established a window to exercise the option between February and August of 2015. Given the significant progress in bringing our companies together and finalizing the transaction, we announced today that we exercised our option early and now expect to close transaction in the first calendar quarter of 2015.

In completing step two, we will establish a new holding Company for our combined enterprise called Walgreens Boots Alliance with four operating divisions Walgreen Co., Boots, the UK’s leading health and beauty retailer, Alliance healthcare, pharmaceutical wholesale business, and global brands. We’re also have a cross-divisional global pharmacy, market access group.

Let me thank and congratulate the Walgreens and Alliance Boots teams who have been working around-the-clock. As we moved toward finalizing the merger, we made a number of decisions related to the full combination of our Companies. First, Walgreens Boots Alliance will be led by a blended senior management team consisting of senior executives from both Companies.

Let me just run through the top team. I will serve as President and CEO of the combined enterprise. Stefano will be Executive Vice Chairman of the combined Company reporting to me responsible for strategy and M&A and Chairman of a new strategy committee of the Board. I look forward to working with Stefano and leveraging his immense industry and business expertise and his tremendous focus on you, our shareholders.

In alphabetical order, the remainder of the blended management team includes Ornella Barra, Chief Executive Wholesale and Brands for Alliance Boots who will become Executive Vice President, President, and Chief Executive Global Wholesale and International Retail. Jeff Berkowitz, Co-president of our Walgreens Boots Alliance Development joint venture in [Bern], will assume the role of Executive Vice President and President Pharma and global market access which will include responsibility for specialty pharmacy.

Alex Gourlay, Walgreens President of Customer Experience and Daily Living, will become Executive Vice President and President of Walgreens. Tim McLevish, who we just heard from, Walgreens new Executive Vice President and CFO, will now serve as the Executive Vice President and global CFO for the combined Companies.

Ken Murphy, Managing Director Health and Beauty International and Brands for Alliance Boots, will serve as Executive Vice President and President of Global Brands. Simon Roberts, Managing Director of Health and Beauty UK and the Republic of Ireland for Alliance Boots, will serve as Executive Vice President and President of Boots. Tom Sabatino, Walgreens Chief Administrative Officer and General Counsel, will serve as Executive Vice President and Global Chief Legal and Administrative Officer. Tim Theriault, Chief Information Innovation and Improvement Officer of Walgreens, will assume the role of Executive Vice President, Global Chief Information Officer. Kathleen Wilson-Thompson, Walgreens Chief Human Resources Officer, will become Executive Vice President and Global Chief Human Resources Officer.

I’d like to pause and thank these folks for all they and their teams have done to advance our strategic partnership, and most of all for all they will do to build our teams to lead our combined enterprise into the future. Let me also thank the over 350,000 team members of Walgreens and Alliance Boots in the US and around the world for their dedicated service.

Moving to the next major element of our transaction, as you saw in our press release, we determined that the new holding Company will be a US-based Company headquartered in the Chicago area. Walgreens’ operations will remain headquartered in Deerfield, Illinois. Boots’ headquarters will remain in Nottingham in the UK.

Given the intense speculation and public commentary around the inversion issue, let me step back for a moment to make sure that everyone clearly understands the diligent and disciplined way that we went about making this important decision. There are three point I want to make about this process. First, the Company and Board undertook a balanced, rigorous, and extensive analysis of the issue. As part of our fiduciary duty to shareholders and given the potentially significant implications from a business, financial, and competitive perspective, we carefully and extensively evaluated a possibility of an inversion in connection with step two.

We engaged nationally recognized legal tax and policy advisers who are experts in the field of cross-border acquisitions, tax policy, and, in particular, inversions. We taxed the experts to conduct a thorough, objective analysis to determine optimal and sustainable course of action. We also formed a special committee of the Board comprised solely of independent directors, which in turn engaged its own independent tax advisor, to review the inversion issue in order to make a recommendation to the full Board.

Second point. The Company and Board looked at the full range of issues, both the potential opportunities and benefits as well as the risks that may be associated with an inversion. Understand that these are highly complicated issues that come with a wide range of assumptions. I can’t emphasize enough this is a highly technical and complex area of the tax code that requires companies to comply with specific requirements, and there are many opinions out there.

The ranges of issues that we explored fall into three buckets. Structure, does our existing transaction permit an inversion, and if not, is there acceptable alternative structure? Benefits and risks. What are the benefits of an inversion? How sustainable are they in our current environment? What are the risks, and how acceptable are those risks? And third, what is the level of competence required by the Board on the answers to these questions to recommend a path forward to our shareholders?

Briefly with regard to the first bucket with our existing transaction with Alliance Boots — whether our existing transaction with Alliance Boots would permit an inversion, the answer is that it would not. We then looked to see whether we could find an alternative structure that would sustain the inversion tax position. We explored several alternative structures while simultaneously assessing the benefits and risks of each. We considered benefits such as substantial financial advantages, competitive considerations, and future M&A opportunities, and risks that include potentially putting the Company in a significantly worse position than if we had not inverted at all such as a protracted controversy with the IRS. Possibly including litigation, which could go on for 3 to 10 years, and would significantly complicate and impede everyday tax and business planning. Possible dual taxation during the intervening years and payment of back taxes with interest and significant penalties. And third, somewhat harder to quantify but still quite significant, the potential consumer backlash and political ramifications including the risk to our government book of business.

That leads to my third point, the conclusion of this process. First, the Board determined that a significant level of confidence with regard to the sustainability of the inversion tax position was essential given the potential substantial downside risks. With that in mind in the end, the parties could not arrive upon a structure that provided the level of confidence required by the Board to ensure that the transaction could withstand almost certain, intense protracted IRS scrutiny.

While we fully understand and considered the significant financial benefits of an inversion, when weighed against the risks, the Company and Board determined that pursuing a structure that included an inversion was not the right course of action for our combined future enterprise. Rather, we felt that our Company would be better served by focusing on accelerating the option exercise, expeditiously moving forward with combining our two Companies, and tackling the issues we face today to position our new global enterprise for the long-term future.

Let me focus on the future and outline the third area of our announcement today, our next chapter plan and financial goals. With our full combination, Walgreens Alliance Boots will be well-positioned for a new era of profitable growth. We are aggressively pursuing future opportunities to drive sustainable shareholder value over the long-term. To do so, we are launching a new, three-year next chapter plan designed to maximize the scope and scale of the new combined Company.

Through this plan, we will accelerate our core business performance in three specific areas. First, a differentiated retail experience that transforms the retail model for health and wellness and changes the way people shop for beauty products. Second, integrated pharmacy and health care that advances the role of pharmacists to provide access to innovative health care services. And third, global pharmaceutical services that reinvent the pharmaceutical value chain and deliver a seamless specialty pharmacy model. We’ll certainly be talking more about these growth areas as we move ahead.

Now with our full combination and the next chapter planned, the Walgreens Boots Alliance enterprise is establishing new goals for FY16. As you know, we withdrew our previous 2016 goals that we put in place in 2012 due to the many step two considerations and current business performance trends in both Walgreens and Alliance Boots. We also committed to return with new goals and metrics that would reflect our view of the combined enterprise.

Today, we are establishing new goals focused on revenue and EPS. These goals are revenue of $126 billion to $130 billion excluding JVs and Associates. And, an adjusted EPS goal of $4.25 to $4.60. We believe it is important to highlight its — the size, scale, and top line growth potential of the Company post-step two. Our adjusted EPS reflects the full earnings power of the business including our planned decisions around cost savings, capital allocation, and tax planning for the combined enterprise.

This adjusted EPS range we’re setting for today includes the following. Synergies greater than $1 billion, a tax rate in the high 20%, our announced $3 billion share repurchase program, and the accelerated cost savings that we announced today. While not an explicit goal, the adjusted EPS range also implies an adjusted EBIT range with a midpoint around $7.2 billion. Our goal is to drive double-digit adjusted EPS growth over the long-term.

Let me pause here and acknowledge that we’re not happy about lowering our previous goals, but we want to adjust our outlook given more pronounced trends across the global business. First, we have been challenged by the ongoing global pharmacy reimbursement pressure, which continues, and the rapid and pronounced increase in generic drug pricing, which we did not fully anticipate, and now expect to persist longer than we anticipated. Both factors are having an adverse effect on Walgreens pharmacy margin which we were not able to fully mitigate given the structure of certain existing contracts. In addition, we made strategic investments in margin over the near-term for long-term share gains in our retail pharmacy business.

In particular, while our decision to win with high value Medicare part D seniors drives market share in this key segment, it is having a near-term impact on margin as reimbursement rates are lower. Having just completed the annual renewal cycle for 2015, it is now clear that we will have margin compression in calendar 2015 and beyond. It is clear that these factors will have a negative impact on gross profit dollar growth in our pharmacy business, so therefore, we have incorporated the impact into our revised outlook for business.

Stefano and I are very focused on addressing this challenge. In our US business, we’re realigning our contracting strategies to this new market reality of price pressure but also to take advantage of the overall growth trends in the market. We’re also drive our differentiated front-end business where we believe we have incredible opportunities to grow including by building our global brands with Alliance Boots.

Globally, we will continue to leverage our combined scale and purchasing power to offset margin pressure and work closely and collaboratively with manufacturers to drive growth and innovation. Finally, we are pleased the Board voted to bring our two Companies together bringing Stefano and his leadership team together with ours to reposition the Company for long-term growth as we work through the changing and challenging marketing conditions.

That leads to a key element of our next-chapter plan, increasing efficiency in our global platform. As you know, we remain externally focused on gross profit dollar growth relative to SG&A dollar growth. With the pressure we have experienced on pharmacy margins, we have become even more focused on cost control in general and lowering our cost to fill to create more sustainable profitability. More broadly, we’ve worked hard to identify $1 billion in cost savings by FY17, the majority of which is already reflected in our FY16 goals. This effort is focused on several areas including store costs, field costs, distribution costs, and corporate costs.

But, we also realize that’s not sufficient based on the environment I just described. We know we need to do more, and we will. Stefano and I believe that together we can accelerate our cost reduction initiatives and synergies even more, leverage our size and scale to lower our cost of goods, and identify additional cost savings opportunities that we can’t see individually. We will do this prudently in order to impact our customer and patient experience, and in fact, the objective is to improve it. Stefano and his organization have a track record of getting at costs, and we intend to leverage that expertise.

Finally, as part of our next-chapter plan, the Walgreens Board has established a new capital allocation policy for the combined enterprise. The new policy is structured to ensure a balanced and disciplined approach to capital and includes several key elements. Investing across core businesses at sustainable returns to drive organic

growth. Pursuing strategic opportunities including mergers and acquisitions. These would be consistent with our strategy and return requirements, be accretive, and drive long-term growth. Maintaining a strong balance sheet and financial flexibility with a commitment to solid, investment-grade credit ratings.

Returning cash to shareholders by committing to a 30% to 35% dividend payout ratio target over the long-term. As you saw in this morning’s press release, the Board also declared a quarterly dividend of $0.3375 per share, a 7% increase over the year-ago dividend. This increase is the annual dividend rate to $1.35 per share and marks the 39th consecutive year Walgreens has raised its dividend. It also includes a $3 billion share repurchase authorization through FY16.

Before I close, let me give just a brief look ahead to the fourth quarter. We expect gross margin to be down a similar percentage year-over-year to what we saw in the third quarter. That is due to the ongoing gross margin pressures from the items we mentioned before. These include the recent changes in the environment of our pharmacy business including ongoing generic inflation, reimbursement pressure, and a shift in pharmacy mix toward 90-day at retail, and Medicare part D. Also, please keep in mind that last year’s fourth quarter included net gains from certain litigation matters which reduced our SG&A dollar growth by just under 1%.

Our FY15 results, of course, will depend on the timing of the closure of our transaction. We will update you on trends affecting our performance on a quarterly basis as we proceed through the year. We are resetting and asking for more performance from our core business. We have much more we can do and must do. I’m looking forward to getting Stefano and the Alliance Boots folks more involved in helping to lead the combined Company.

Longer term, we are excited by the opportunities of our fully combined enterprise including — additional synergies, growth in our healthcare business as the US and global populations continue to age, expansion of our own brands and going bigger in beauty, growth in our health and wellness businesses, and of course, international expansion, not only in our current markets but in the new emerging markets as well.

To wrap up my opening, I covered a lot of ground here this morning. We have a lot of important announcements to make, and I know it’s a lot to digest. Stefano and I look forward to taking as many questions as possible on this call. We also have more opportunities in the coming days and weeks as our team gets on the road to talk to investors.

Let me also take this opportunity to thank the many, many shareholders who have engaged us over the past weeks and months. Our plan is even stronger for all of your thoughts, insights, and guidance.

With that before I hand off to Stefano, let me just try to capture what I believe is the magnitude of this moment. We are lifting Walgreens from a US-only business to a truly international group with Alliance Boots. This group is unparalleled in our industry in the world. Today, we’re entering a new state in our strategic partnership.

What Walgreens gets from our full combination with Alliance Boots is more than just new businesses, new products, new markets, and fresh thinking which I’m always looking for. We also get Stefano and his remarkable strategic experience. When combining his leadership team with Walgreens’ leadership team, Stefano and I are convinced we’re fielding the strongest combined team in the industry. Together, we are establishing one of the most inspiring, far-reaching, and game-changing strategic partnerships I’ve ever known and created a new global platform for long-term growth and value creation for the Company and its shareholders.

So, I want to thank my colleague and friend, Stefano, for all he’s done to make this day possible, and all he will do to make it successful in the future. Stefano?

Thank you, Greg. Good morning, everybody. I believe that I shall start today by reminding you that the fundamental focuses that drive our businesses and market have not changed. Demographics and the demands on the healthcare system continue to drive volume to our network, both in pharmacy and in distribution. With this volume growth, comes continuous demand for efficiencies and price constraints to help accept that they inevitably increase our costs.

With this underlying pressure, there is no doubt in my mind that our core businesses remain highly attractive and continue to offer huge potential on a global basis. Retail pharmacy remains an important and, I believe, a still radically underutilized platform for the provision of healthcare in the community. In many geographies, the[co-location of pharmacy with specialization provides a unique opportunity to reach the very heart of the communities we serve. So, combining we [fostering] as such as convenience retail in the US or the beauty and personal care in the UK.

Within this environment, innovative services in the specialist product offerings particularly in the beauty and personal care space answer [to both brands and answer] customer loyalty and create economic value in their own right. We have seen these repeatedly throughout our group. We have been the innovators and leaders of this globally, across many markets, and we continue to develop this model where we can adapt it to the local culture.

Today again, we see the opportunity to innovate and lead. We see the opportunity to define the spread and best practice in pharmacy across continents and the healthcare system. You are seeing us to do this not just between Europe and the US but also in Asia and most recently in South America through our work in Mexico and Chile.

We see a huge opportunity to update and enhance our daily living retail offering using the tool in novelty Boots [granted]. And, this clearly targets to differentiate our offerings in the US and drive customer experience [including] revenue and margins as part of a revised, dynamic, and truly unique retail offering. We are committed to

seeing Walgreens as a brand that people have a clear understanding of and loyalty to. The people are prepared — I would say happy — to walk past our competitors to come to us no matter what.

This differentiation and localization can only work in an increasingly global healthcare market if supported by a robust and efficient supply chain to optimize cost and availability at the very local level. And, the knowledge and expertise that this brings to support the day-to-day pharmacies.

Of course, none of this should be new to anyone listening. It is something that the US heard in the past, but now this is the time to back up these words with actions. [Macro] trends and opportunities are not enough to [lead us to success, obviously]. To [try], our business must be flexible and agile and must move with its markets and, if possible, [grant] them. It must remain relevant, efficient, and stay ahead of its competitors.

Yet, we have [to wait] analyze and understand the situation we face, but we can only afford to spend so much time debating it before we must act to embrace these opportunities. We will earn our place as the leader of this sector. Complacency, indecision, and [inconsistence] are all certain roads to extinction in these dynamic markets.

People will be disappointed with some of what they have heard from us today. While I can understand that completely, and indeed, I will not pretend to be particularly happy about it myself. Over the past two years as the healthcare and retail markets have reacted to the changing shape of our industry, frankly in part as a response to our own transaction, we have perhaps allowed ourselves to become a little too preoccupied with the transaction and have not given the attention we might have to evolving our businesses in these markets.

The completion of the transaction gives us the opportunity to renew our focus, to transform our businesses once again into a shape to lead the market of innovation, efficiency, drive, and reliability. To do this, the group must be led by a team with clear and common goals, unified, aligned in their commitment and passion to create true and meaningful value for shareholders as the ultimate owners of the business. We must not forget our (inaudible). But, that there can be no place looking forward for self-interest or prejudice to stand in the way of the common goal. The unified Company that will be created by the merger must deliver the promised ambition that has been articulated to you.

When finally, the two businesses come together, we will have the potential to do more than anyone else in this space to improve the affordability and accessibility of healthcare globally. We will not only have the scale and reach to be a defining force in both primary and consumer healthcare all around the globe, but we will also have a platform in which to continue our expansion into new markets that can deliver us new sources of growth for many years to come.

If we are to do that, we must do so from a sound foundation and position of unqualified strength in our existing markets. We must always innovate and work on a platform that enables us to quickly exploit and share the benefits of that innovation. Now, we must move on and move quickly.

Of course, we do not underestimate the task ahead of us to shape this group into what it needs to be and to ensure all its parts are [fit to process] and pulling in the same direction. It is not going to be an easy task, and it will not be achieved overnight. Starting as we are unfortunately in some ways farther back economically than we thought we would, it is undoubtedly going to take us a little longer than we had hoped to deliver all the benefits we can see. Indeed some of them may no longer be available to us, but other, new opportunities will show themselves and we must be ready to take them.

I hope that today we have announced a team that is ready and able to meet the challenges and opportunities ahead of us with the right attitude, open minds, flexibility, energy, and above all, focus [to be leaders]. Undoubtedly, we will face challenges we are not expecting. And, we will have to make the changes to our [coach] and thinking accordingly. But, I have been in such situations many times before, and I know that with the right mindset and the right people, it is possible to overcome any obstacle we meet. And, find us [to believer] even though a little later than we hoped, the full potential of the merger.

Today, we have also announced that [in as well as to the chair of the new strategy committee for the Board], I will be adopting the role of Executive Vice Chairman of the combined Company, joining the executive team with the responsibility for strategy and M&A. In this role, I am really looking forward to working with Greg to make sure that the Company delivers on what has been promised, pursues the opportunities available to it, and creates real value for you, the shareholders, our [partners].

Thank you, Stefano and Greg. Those are our prepared remarks. We are now ready to take your questions. Nicole?

Hi Greg. Couple of things on the reimbursement environment. The pressure with regard to the contracting is that more how you buy product? I assume it’s not how you buy product as much as how you are being reimbursed. Is that right? And then, why do you think it’s — I think the view had always been that there would be pressure, but it would be somewhat manageable. Seems like it is a little less manageable. Why is that? What has caused a step-up in sustainable pressure on reimbursement?

Thanks, John. It’s actually a little of both. I think the generic inflation that we have seen in addition to driving up cost of goods is impacting our commercial contracts which historically have been crafted off of deflation of generics. And so, we’re going to need to continue to go back to those commercial plans now that we’re in an inflationary period and adjust for that. The second biggest and probably most significant impact was the negotiation and the reimbursement in the fiscal — or calendar year 2015 med D books of business. Those plans have really challenged us. We are in preferred positions with the part D plans. We think it’ a strategic investment to grow market share with the lucrative senior market. But, there were significant margin step-downs in the med D contracts beginning in 2015. Combine those two, and that’s what we’re looking at in trying to be realistic as we forecast out the next couple years.

As a follow-on to that, it looks like — if I look at your $7.2 million of EBIT, right? It looks maybe core growth likely to be in the mid-single digit range through 2016. Do think long-term the growth rate is higher than that? And, if that’s true, why would that be?

As I said in the script, John, we would expect to get back to double-digit EPS increase, and we think, as Stefano and I both said in our prepared remarks, I think that while we are resetting our Outlook for the next two years and FY16 and certainly not happy to have to do that. We do believe that going forward in this combined entity, we don’t think that there is anyone better positioned to win in the challenging environment that we described with our global scale. As we’re seeing with the joint venture in Bern, and what we’re able to accomplish there. The integrated supply chain we’ve talked about. I think that you are beginning to see some tremendous progress that we’re making in the front end of our stores. We think there’s huge opportunity there as we go forward. You can look across the pond to Stefano’s — to the Boots stores and what they’ve done in the front end. Longer term, I think we’ve got the opportunity to bring the two organizations together and find and identify additional synergies and cost opportunities. While we have reset expectations for FY16, John, our long-term Outlook has not changed.

This is Meredith Adler and Eric Percher. I’d like to start with a question talking about your plans to buy back stock and what you would do with your cash if you don’t buy back stock? We were wondering whether you actually have had conversations with the rating agencies? And, why is it so important to stay a very solid BBB? Stock could easily be a great buy, certainly after today. Why wouldn’t you consider leveraging up more to buy back more stock? And, if not, what will you do with your substantial free cash flow?

Meredith, thanks for the question. I actually have Jason Dubinsky, our Treasurer, with us, and maybe I will let him address the first part of that. Certainly, as I said, we’d continue to invest in the core business and look for opportunities that meet the return and the hurdles we would expect to have. As far as how we have looked through and walked through the share buyback plan, I’ll let Jason weigh in there a little bit.

Meredith, it’s Jason. I would start and echo that we strongly believe firmly in the cash flow — future cash flow generation capabilities of the Company. But, to your point on solid investment-grade ratings, very important to us on a go-forward basis. And, by that, we mean not dropping below BBB at both S&P and Moody’s. And, why do we want to be a solid investment grade credit rating? I think primarily financial flexibility is important for the long-term to pursue the strategic opportunities for the Company. It is critical for us as a Company of our size and stature to keep liquidity and maintain strong tier 2 commercial paper rating. And, certainly for capital markets access, remaining solid investment grade is important. We’ve taken all that into account and believe we’ve adequately sized the share repurchase capacity to keep us in that zone. We’re confident that that’s the right place to be for us right now and for the longer term

There are companies of similar size who, not only do they buy back more stock, but they actually give a multi-year vision. You’ve got $3 billion for over three years, but clearly you could do $3 billion this year. Why not lay out a longer-term strategy? I think you’re going to have an awful lot of free cash flow. Are you really — I guess I would say that this doesn’t — I don’t understand. It seems to me you are doing a disservice to shareholders to count on some future acquisitions that may or may not have a good return when you could be buying back stock and generating a meeting value to shareholders. That’s a statement, I guess, not a question. Eric, do you have any questions?

I’d be interested in the response to that, and maybe I would add on, are you still expecting to fund the second portion — the cash portion via debt issuance?

Maybe I can help frame capital structure a bit in that context. We do have to deliver $5.3 billion — US dollar equivalent in sterling. You can consider that into your planning along with the fact that we do intend to refinance Alliance Boots’ debt which their net borrowings as of their last annual report was roughly $8.5 billion in US dollar terms. That does not include any debt incurred with the FASA acquisition. All of those are part of our financing plans as we consider approaching step two and the amount of debt that would likely be required to close the transaction.

Thank you. Greg, just going back to reimbursement, I really have two questions here. The first is just as you think about contracting, can you give us an idea of when some of those contracts are up for renewal? Do you think that there’s an opportunity in the next 12 to 18 months to renew that? And then, a bigger question. If you look at your largest US competitor, they own a PBM. They don’t seem to have the same reimbursement pressure that you’re having today. Any thoughts around perhaps owning a PBM in the future? I know you’ve been against it in the past, but does this change any of your thought process as you become a bigger health and wellness Company?

Thanks, Lisa. As far as the reimbursement of contracts, typically the commercial contracts have two to three years. We’re somewhere in the cycle of those that maybe under renegotiation this year or two years left, and we’re going back to working on those contracts. In some, we will have success, and some we may be longer-term. I think the bigger impact, as I said, was the Medicare part D programs.

Regarding the structure that we have, I think irregardless of our competitor and the structure that they have, I think Stefano and I are thrilled with what we’ve put together. I think to his point earlier if we focus — now that the Board has approved the second step — that we have a tremendous opportunity to drive significant volume with the model we have, an integrated retail wholesale model. And, believe that with the scale that we have longer-term, we are well-positioned and better positioned globally than I believe anyone else out there.

As we think globally and you talk about the $7.2 billion of EBIT, can you or Stefano give us any indication as to what you’re seeing on the European side of the business? Are you seeing equal amount of reimbursement pressure? Or, this new number is really more of a takedown on the US side of the business? I’ll stop there. Thanks.

The pressure on the pharmacies is a global issue. Everywhere in the world, the margin of the pharmacies is under pressure. To be honest, not just the margin of the pharmacies. So, it is something we have to cope with, and we have to respond cutting the cost and maybe finding new ways to develop our business.

20 years ago, Boots, as you know, was making its money on the pharmacies. 75% of the profit of Boots was coming from the pharmacies. Today, 75% comes from the front of the store. The pharmacies losing money not at all. They are still very profitable in Boots because the margin has suffered, but of course, they are selling much more. And so, they are still very profitable. But, of course, in terms of margins, they don’t have the margin they used to have in the past.

Over time, we have developed something to compensate for it. We have developed the front of store. This happens everywhere in the world. If you see what happens in the Netherlands, the margins have almost collapsed in Sweden. But, at the end of the day, the pharmacists, the chains, where allowed have found a way to compensate with less cost and new offers, new products, and new services to the patients. This is what will happen in the US.

I have never doubted that the pharmacy in the US was and maybe still is quite rich, and so over time, we have to wait for a reduction in margins. This is why I believe we have done this deal at the end because Greg was very clear that he wanted to develop the front of stores in order to compensate for it. It has happened a little quicker than we expected. Maybe we have not seen it coming. It has been a surprise for the people of Walgreens. But, at the end, the day the trends are there. Sooner or later, this had to happen. Sooner or later, we had to develop our front of the store. Sooner or later, we will have to find new ways to deliver the medicines at the lowest cost and deliver something else which can compensate for [the margins that we’ve seen].

Hey, good morning. You established a three-year cost saving plan and talked about $1 billion in synergies. Can you just help us understand what percent of savings will be captured by FY16 so we can tie it to the 2016 guidance?

You can assume that a substantial majority of those savings will be realized by the end of FY16. A bit of a step to 2017, but you can factor that into your modeling.

And, the baseline — the $1 billion in synergies that you are referring to. Should we use the baseline against FY13 as the starting point, or FY14?

And then, obviously your potential tax rate goals have been an issue with a lot of discussion and controversy for the last six months. Greg, you talked about tax rate in the high 20% factored into the guidance. Can you talk with us a little bit about how can you get that tax rate from the high 20% that’s embedded into guidance to a lower level? What other things outside the inversion that is off the table can you do in order to manage your tax levels?

Certainly, Ricky, we do think that getting it down to the high 20% is significant. We will be and will continue to look for opportunities to optimize our position. I think that as we bring the two Companies together, certainly we will hopefully find and identify new opportunities. But, I think at this point, we feel confident that we can get certainly to the high 20% as we said. We don’t typically get into tax planning discussions on these calls, but certainly as we move forward, we will be looking for opportunities.

Okay, and then given that you established an EPS guidance, are you going to also guide on an annual basis? Or, are we still staying with the monthly comps in a FY16 goal type of format?

At this time, we are remaining with the FY16 EPS goal. We are and will consider listening to our investors, but we will continue to give monthly sales comps in the information that we try to give as we previously have.

Good morning. Thanks for taking the question. Greg, first, a point of clarification. The new $1 billion synergy target is in addition to the $1 billion of procurement synergies that were announced in 2012?

We have not provided — making sure I understand —. George, repeat the question. Are we talking about the synergies we referenced in the press release and the script?

The synergies that you referenced in the press release and the script — the $1 billion. That is in addition to the $1 billion that was originally announced in 2012? Or, is that stating that you’re going to exceed the $1 billion that was announced in 2012?

That is helpful. Greg, if we think about the guidance that was provided in 2012 versus where we are today, what are the — it’s basically a negative revision of more than 20%. What are the biggest moving parts and what are the biggest contributor to the change in the Outlook in 2012 versus the change in outlook today?

George, it’s primarily that global pharmacy pressure that we are seeing on both businesses. Certainly in the US, it’s the pharmacy reimbursement and the inflation that we’ve seen spike as I discussed. I think as far as Stefano’s business in Europe, you can certainly see similar-type pharmacy reimbursement pressure in the wholesale part of the business. Primarily from the pharmacy reimbursement and generic inflation environment across the globe

Okay. So, I guess just if I’m thinking about the model right, if I back out synergies and I back out share repo, we’re basically expecting the EBIT of the combined business to be flat to maybe even — to basically be flattish now through the end of 2016?

Yes, we are looking to be through the next couple of years probably flat to a little up. But again, that’s why we are — with the Outlook that we gave in 2016. But, we do believe that we have opportunity to continue to drive growth beyond this reset.

Thanks for the questions. Greg, just wanted to go back again to the combined EBIT target of $7.2 billion. Obviously, as noted on this call, quite a bit lower than the previous range. And now, this range does include at least one year’s worth of the new $1 billion of cost savings. I guess maybe just a higher level question. It seems like things changed on you fairly dramatically since the original guidance was given. I’m curious — almost to the extent that it seems like it’s wiping out a lot of the synergies. I’m curious how much of this change in the market — you refer to generic inflation was a reaction to your transaction to begin with? And, was this may be something that you just underestimated, the ability of the market to shift along with your scale shifting?

It’s a fair question. It would be hard to determine what the exact cause was. I do think that it’s primarily a challenge in reimbursement model across the US business that has accelerated. Specifically, as we went into FY15 — or calendar 2015 med D contracting process, that’s where we really saw a significant change that impacted —. And, the generic inflation that we talked about that we didn’t expect it to be quite as significant and prolonged as it is. Combine — those two combined would be the lion’s share of what has impacted the new metrics from what we put out in 2012.

That is fair. I know we touched on the debt and the cap structure, but I’m wondering if you would be willing to share some leverage targets? Where are you comfortable as far as carrying debt? And then, anything, or early thoughts around refinancing Alliance Boots’ debt at this point?

Robert, it’s Jason again. We’re not going to give out any specific debt targets other than our commitment to the solid investment-grade ratings and not dropping below BBB flat at S&P and Baa2 at Moody’s. And, metrics consistent to keep us within those targets.

As far as refinancing the Alliance Boots debt, we won’t give any specific plans. You’ll have more as we come closer to the transaction. But, we recognize the importance to refinance that debt just given the higher costs of debt in Alliance Boots versus the combined entity will provide from a synergistic standpoint. As, I mentioned before there is roughly $8.5 billion of net debt there today excluding the FASA acquisition so our intent would be to take that into account in our financing prior — or concurrent with the closing.

Hey, good morning. I guess weighing all this, it’s pretty shocking that there is such limited visibility and control over the business given the Company is selling consumables and pharmacy. It’s an observation. With EBIT coming in — it looks like more than $2 billion lower in 2016 than what you originally contemplated, can you put this into buckets, Greg? I know you like to think about the business in components. How much of it is the US business versus Alliance Boots? How much of it is retail versus wholesale? And then, given the lower Outlook, is there an expected change in incentive compensation? Can you just case clarify whether these goals are organic? And, to what extent you expect acquisitions to be meaningful in your Outlook by 2016. Thanks.

Mark, the breakdown with the reimbursement and the challenges we’ve seen would probably be similar to the scale of the businesses. Certainly, the US business, we’ve seen a significant step-down there, but also Stefano’s business and wholesale piece has stepped down as well. I think it would be pretty similar to the scale of the business. Primarily, pharmacy-related, Mark. Again, as I said. In fact, the front end of the business we’re optimistic about. Compensation is absolutely tied to the plan and the internal plan that we set. As we go forward, it’s tied to performance.

On acquisitions — to clarify, this goal is organic. It does not contemplate additional deals.

And then, just a final one. The reimbursement on the med D for 2015, has come a as surprise it looks to the team. Are you at the mercy of third parties? Or, is there something the Company can do to gain greater control over this process going forward? Thanks.

Mark, I think that certainly the reason that we made the strategic investment is to grow share in this business — this market — and we are. With the restructuring that we’ve put in place, we’re going to have a new team focused on the contracting opportunities and working with these plans. Jeff Berkowitz, when I announced that his role will be market access, will be specifically focused on this to help us work with payers and drive additional EBIT from these plans.

Just to clarify on the buyback, are you counting on executing the full $3 billion of the buyback? And, what share count should we be expecting for FY16?

The $3 billion, just to reiterate, is effective today through the end of FY16. We aren’t giving any specifics on the timing of that other than it is effective today, and we have factored that in to our adjusted earnings goals that we set forth in the press release.

So, it’s not just an authorization, you plan to fully execute it at some point through that window?

Just beyond this period where you’re struggling through some reimbursement rate pressure, could you talk a little bit more about the longer-term EBIT growth goals for the combined business? What do you think a normal growth rate would be for each of the two major businesses — for Walgreens and Alliance Boots?

Mar, I think the way to approach that is Greg had mentioned we’re certainly in a period of reset here, but I think we would expect to get back to more historical trends that we’ve seen beyond into the future. Both on an organic basis that wouldn’t include any strategic opportunities beyond that.

As I said, Mark, I think that the goal would be to get back to double-digit EPS growth. Certainly, that’s not EBIT goals but double-digit EPS goal, growth going forward.

How about just the core EBIT growth? How much of the business is going to be growing? Obviously, you’ve got some buyback and other factors factoring into the EPS.

Given the goals today, we’re focused obviously on EBIT generation and growth, but we’ve gone to EPS goals because of not only EBIT growth but the other levers that we can pull. And, we’re very focused on long-term goals of double-digit EPS growth.

Okay. (multiple speakers) Any perspective on international and where you’ll be growing there in geography growth and so forth?

I was saying, I believe it’s very interesting to focus on the EPS because if you look at the deal in the business in Europe for instance [mogenaybe], you will see that the EBIT growth has slowed down. But, if you look at the numbers in terms of earnings, you will see that the earnings have stepped up because of course we have different levers to work on. We said two years ago when we presented the business that we would focus on earnings, which we have done, and in earnings, we have strong double-digit growth.

Now, on EBIT, as the market is changing as I was saying before, we are re-adopting — in Europe, for instance, we are trying to compensate the pressure that we have on the retail business. Creating new product, putting our product on the market in order to compensate with the mix and keep the margin more or less intact. On the [all-selling] business, we are thinking of a stronger structure and which we do every seven or eight years because the market changes, and we have to adapt our organization to the changes of the market, reducing the costs.

In reality, this year and next year, will be an era of transition where we continue to grow the profit — the earnings quite substantially even the EBIT more modestly. But, in the future years, of course, we will have the benefit of all the restructuring and all the innovation that we have been working to, and this is not something that we have started now. It’s something we started last year.

Thanks. Good morning. I guess I’m curious with all the moving parts in relation to the FY16 EPS guidance of $4.25 to $4.60, can you tell us whether step two of the AB transaction is accretive or dilutive to the EPS that may have been reported by WAG on a standalone basis for FY16. If you did not pull the trigger on step two, but maybe you still did the share buybacks and some of the other cost-cutting initiatives. Bottom line, is step two accretive or dilutive to WAG’s standalone EPS for FY16 just based on your own math? Thanks.

Okay. And, I guess the other quick thought here is, you’ve laid out this pretty good strategy for three years through FY17. It seems like FY17 could be a pretty good year of strong EPS growth. I was just curious, why not give some FY17 EPS guidance and targets? And, why so much emphasis on FY16?

It’s a good suggestion. We wanted to make sure that we were comparing apples to apples, and since we had pulled our 2016 goals, we wanted to make sure we got out there with what we thought our EPS target would be and tie it to the last goals. We do feel — Stefano just said that we have opportunity to grow this Company in FY17 and beyond. But, we wanted to make sure that we were comparing apples to apples.

Good morning. A lot of the story here also has been the thought process behind the ability to improve front end business at Walgreens. Can you talk a little bit about what is the implied EBIT growth of the front-end business? If we’re talking the overall business ex-synergies — sorry, ex-cost saves around flattish for EBIT, what is it implying for the front end over that time period through 2016, and then, when can we expect some of these initiatives to really begin to drive any real growth there?

Ed, we haven’t given that. I do believe that as I said there is real opportunity in the front of our store. If you think about what Stefano was talking about earlier on the Boots model over the past years as the pharmacy became more pressured and the opportunity that they had and what they were able to drive out of the front end of the business. Their operating margins are significantly higher than what ours are, and it’s primarily as a result of that front-end business. We do think that there is opportunity to drive operating margin out of our front-end business. I feel confident with what we’ve been doing so far — the proof points we’ve seem that there’s opportunity there. We haven’t broken it out, but I do believe, as I’ve said, that if we look across the pond to the Boots model, we have similar opportunities at the front-end of our store.

I can assure you that after the merger we will have a step-up in the margins of the front of the store. You will start to see it growing from next year on. Not this year, next year at the time of the merger, you will see it. We have clear plans for it.

Good morning. As you were formulating the plan, obviously adding a new CFO to the mix. So, it’s a complication. In terms of what he brings to the table that will help you in terms of execution? And, maybe hash out some of these longer-term drivers which you have laid out today. What attracted you to his skill set, and how do feel like it will take him to get up to speed and then ultimately have some input on achieving the goals you’ve laid out today?

Having spent time with Tim just in the last few days, I can assure you Tim will come up to speed quickly. What attracted me to Tim was the fact that he has some incredible experience, not only in large mergers but in cost-focused —. In past opportunities, real financial discipline that he is bringing to the team. I really do believe that Tim is going to add a lot. I think he’ll come up to speed quickly. I’m looking forward to having him at my side, specifically on calls like these. And, to help us make sure that we’re making good, sound financial decisions and forecasting going forward.

If you look at the pro forma management structure, it’s obviously pretty balanced. But, from an operational perspective, I think Jeff Berkowitz, who has done a great job, is the only surviving member on the WAG side, other than obviously you, Greg. As you think about taking some of the AB folks and integrating them in the WAG business now, more than just Alex. How much time do you think it will take for them to have a true imprint on the business and have the changes flow through the rest of the organization?

I think that they already are having an impact. I think Alex has done a phenomenal job in the short period of time he’s been in. The reason — one of the reasons that I’m really excited about Alex leading the Walgreen business is because we do have the potential in the front end of our stores that I believe has been untapped.

I think no one better than someone who has completed that journey or led that process with Boots as Stefano described over the last decade than Alec to help us accelerate and achieve the opportunity that we believe our front end of our store has. We are going to continue to bring people back and forth as Richard Ashworth, one of our key pharmacy leaders, is working with Simon Roberts in pharmacy and healthcare with Boots. And, we’ll continue to find more opportunities to do just that.

Thank you, Ross. On behalf of Walgreens Boots Alliance, I want to thank you for joining us today. We look forward to speaking to all of you soon

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program. You may all disconnect. Have a great day, everyone.

Walgreens Board of Directors Exercises Option to Complete Second Step of Strategic

Partnership with Alliance Boots and Fully Combine Both Companies, Creating First

DEERFIELD, Ill., Aug. 6, 2014 – Walgreens (NYSE: WAG) (Nasdaq: WAG) today said it has exercised its option to complete the second step of its strategic transaction with Alliance Boots GmbH ahead of the original option period, which was between February and August 2015. The transaction, subject to shareholder and various regulatory approvals, would fully combine the two companies to form the first global pharmacy-led, health and wellbeing enterprise.

This action follows the launch of the companies’ long-term strategic partnership in June 2012, when Walgreens acquired a 45 percent equity ownership in Alliance Boots, with the option to proceed to a full combination by acquiring the remaining 55 percent of Alliance Boots in three years’ time (Step 2). Walgreens expects to close the transaction in the first quarter of calendar 2015.

Walgreens also announced the following decisions related to moving forward with Step 2:

Walgreens Boots Alliance combines two leading companies with iconic brands, complementary geographic footprints, shared values and a heritage of trusted health care services through pharmaceutical wholesaling and community pharmacy care, dating back more than 100 years each. Combining the companies will create a new global leader in pharmacy-led health and wellbeing retail with more than 11,000* stores in 10* countries and an unparalleled portfolio of retail and business brands, as well as increasingly global health and beauty product brands. The full combination also will establish the world’s largest pharmaceutical wholesale and distribution network with more than 370* distribution centers delivering to more than 180,000* pharmacies, doctors, health centers and hospitals in 20* countries. Walgreens Boots Alliance will be the world’s largest purchaser of prescription drugs and many other health and wellbeing products. The combined size, scale and expertise will help Walgreens and Alliance Boots expand the supply, and address the rising cost, of prescription drugs in America and worldwide.

“We are excited to move forward with the next important step in becoming a new kind of global health care leader,” said Wasson. “Expanding globally with Alliance Boots will make quality health care more affordable and accessible to communities here in America and around the world. In addition, Stefano and I are pleased with the comprehensive plan we’ve announced today as part of Step 2. These elements will provide additional shareholder value creation, both in the near and long term. I congratulate our teams for getting us to this point and together we have a bright future.”

Pessina said, “The expected creation of the new enterprise will represent the most significant milestone in the history of Alliance Boots and, importantly, a very positive step for the health care industry as a whole. Together with Walgreens, we have already made good progress over the past two years and I strongly believe that the merger will bring significant growth opportunities for both mature and emerging markets. Today’s announcement reflects the great track record and accomplishments of our people to date and I am convinced that their skills, expertise and commitment will continue to make a positive contribution in the years to come. This combination is a true partnership, further evidenced by the composition of the future management team of Walgreens Boots Alliance.”

Under the terms of the revised agreement announced today, the period during which Walgreens is permitted to exercise its option to acquire the remaining 55 percent of Alliance Boots that it does not currently own, in exchange for £3,133 million in cash (equivalent to approximately $5.29 billion at a current $1.69=£1 exchange rate) payable in British pounds sterling, and approximately 144.3 million shares of common stock of Walgreens, has been accelerated to begin on Aug. 5, 2014 and end on Feb. 5, 2015. Pursuant to the agreement, Walgreens exercised the option through an affiliate on Aug. 5.

Leading Walgreens Boots Alliance will be a top management team led by Wasson and consisting of senior executives from both companies. In addition to Wasson’s and Pessina’s roles, the following appointments are being announced:

The fully combined Walgreens Boots Alliance global enterprise will be domiciled in the United States and headquartered in the Chicago area. Walgreens operations will remain headquartered in Deerfield, Ill., and Boots operations will remain headquartered at its current location in Nottingham, U.K.

In connection with moving forward with the option exercise, and given the potentially significant business, financial, legal and competitive implications, Walgreens management and the board of directors thoroughly evaluated the possibility of combining Walgreens and Alliance Boots under a foreign parent company in an “inversion” transaction. The original option transaction would not qualify for an inversion under the current tax inversion rules. The company and board of directors, including a special committee of independent directors, and

with the benefit of leading advisors in the fields of tax policy and inversions, undertook an extensive analysis to explore the feasibility of a restructured inversion transaction that would provide the company with the customary level of confidence needed to withstand IRS review and scrutiny. As part of this process, the company considered a wide range of issues, including the potential financial benefits (and their sustainability) and the technical viability of a restructured inversion transaction under current U.S. law. The company also was mindful of the ongoing public reaction to a potential inversion and Walgreens unique role as an iconic American consumer retail company with a major portion of its revenues derived from government-funded reimbursement programs.

“In line with our fiduciary duty to the company and our shareholders, we undertook an extensive and rigorous analysis with a team of leading experts to determine the most optimal – and sustainable – course of action,” said Wasson. “We took into account all factors, including that we could not arrive at a structure that provided the company and our board with the requisite level of confidence that a transaction of this significance would need to withstand extensive IRS review and scrutiny. As a result the company concluded it was not in the best long-term interest of our shareholders to attempt to re-domicile outside the U.S. The board did, however, believe accelerating the option to exercise Step 2 was in the best interest of our shareholders, and with this decision, we are now moving forward on an accelerated basis to create the global leader in pharmacy-led health and wellbeing.”

With the full combination, Walgreens Boots Alliance will be positioned for a new era of profitable growth and is aggressively pursuing future opportunities to drive sustainable shareholder value over the long term. To do so, the company is launching a new three-year “Next Chapter” plan that will maximize the scope and scale of the new combined company. Through the plan, core business performance will be accelerated by providing:

With the plan, the combined company is establishing goals for fiscal 2016 including revenue of between $126 billion and $130 billion and adjusted earnings per share of $4.25 to $4.60. In addition, the combined company anticipates exceeding the previously established $1 billion synergy goal.

The company’s continuing focus on improving core performance in the near-term at both Walgreens and Alliance Boots also remains a critical component of the “Next Chapter” plan. “As we launch our global plan, we are more focused than ever on what it will take to compete and succeed on the world stage,” said Wasson. “We are uniquely positioned to be a leader and a champion for accessible, affordable health care, and that means continuing to innovate, to find new ways to be as efficient as possible, and more agile and nimble as we compete in the worldwide market. We also are encouraged by the improving performance of our daily living business and the further potential of our expanded beauty and own brands portfolio to drive margin expansion.”

As part of the combined company’s goal to establish an efficient global platform, the management team is accelerating a multi-faceted cost-reduction initiative across the enterprise. The $1 billion, three-year plan includes corporate, field and store-level cost reductions. The company is making significant progress in an effort that is already under way in order to begin realizing incremental benefits in fiscal 2015. Additional details will be provided in coming quarters as the company recognizes certain costs associated with these initiatives. These cost savings are additive to the synergies discussed above.

“Walgreens has demonstrated a strong focus on cost control as adjusted SG&A growth has slowed significantly from historical trends,” said Wasson. “We have made this impact by driving efficiencies across the enterprise, and we are continuing to focus on that. Earlier this year, we announced enterprise optimization initiatives to further accelerate these efforts, which we’ve executed this fiscal year through strategic closures of certain distribution centers and stores, exiting certain businesses and driving cost reduction programs at our headquarters and in the field. We also plan to expand these efforts as we leverage the expertise of both companies and move forward integrating Walgreens and Alliance Boots.”

The board of directors has approved a new capital allocation policy for the combined enterprise. The policy is designed to ensure a balanced and disciplined approach to capital intended to drive business growth and generate strong returns, while returning cash to shareholders through dividends and share repurchases over the long term. The key elements of the new capital allocation policy include:

In addition, the board of directors of Walgreen Co. on Aug. 5, 2014 increased the quarterly dividend to 33.75 cents per share, a 7.1 percent increase over the year-ago quarterly dividend of 31.5 cents per share. The increased dividend is payable Sept. 12, 2014, to shareholders of record Aug. 21, 2014, and raises the annual rate from $1.26 per share to $1.35 per share. This marks the 39^th consecutive year Walgreens has raised its dividend.

“This is a pivotal moment in Walgreens history as we venture ahead from the best corners in America to the four corners of the world,” said Wasson. “In a changing global marketplace with new opportunities and challenges, we will serve our communities, our country and the world in ways we could never have imagined even a few years ago.”

Walgreens financial advisors in connection with the second step of the Alliance Boots transaction are Goldman, Sachs & Co. and Lazard, and its legal advisors are Wachtell, Lipton, Rosen & Katz, and Allen Overy.

Walgreens will hold a one-hour conference call to discuss the Alliance Boots transaction and related matters beginning at 8 a.m. Eastern time today, Aug. 6. The conference call will be simulcast through Walgreens investor relations website at: http://investor.walgreens.com. A replay of the conference call will be archived on the website for 12 months after the call. A podcast also will be available on the investor relations website.

The replay also will be available from 11:30 a.m. Eastern time, Aug. 6 through Aug. 13, by calling 855-859-2056 within the U.S. and Canada, or 404-537-3406 outside the U.S. and Canada, using replay code 82609242.

As the nation’s largest drugstore chain with fiscal 2013 sales of $72 billion, Walgreens (www.walgreens.com) vision is to be the first choice in health and daily living for everyone in America, and beyond. Each day, in communities across America, more than 8 million customers interact with Walgreens using the most convenient, multichannel access to consumer goods and services and trusted, cost-effective pharmacy, health and wellness services and advice. Walgreens scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with online and mobile 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 8,192 drugstores in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. Walgreens digital business includes Walgreens.com, drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com. Take Care Health Systems is a Walgreens subsidiary that manages more than 400 in-store convenient care clinics throughout the country.

Cautionary Note Regarding Forward-Looking Statements. Statements in this release that are not historical are forward-looking statements for purposes of applicable securities laws. 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: the risks that one or more closing conditions to the transactions may not be satisfied or waived, on a timely basis or otherwise, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions or that the required approvals by the Company’s shareholders may not be obtained; the risk of a material adverse change that the Company or Alliance Boots or either of their respective businesses may suffer as a result of disruption or uncertainty relating to the transactions; risks associated with changes in economic and business conditions generally or in the markets in which we or Alliance Boots participate; risks associated with new business areas and activities; risks associated with acquisitions, joint ventures, strategic investments and divestitures, including those associated with cross-border transactions; risks associated with governance and control matters; risks associated with the Company’s ability to timely arrange for and consummate financing for the contemplated transactions on acceptable terms; risks relating to the Company and Alliance Boots’ ability to successfully integrate our operations, systems and employees, realize anticipated synergies and achieve anticipated financial results, tax and operating results in the amounts and at the times anticipated; the potential impact of announcement of the transactions or consummation of the transactions on relationships and terms, including with employees, vendors, payers, customers and competitors; the amounts and timing of costs and charges associated with our optimization initiatives; our ability to realize expected savings and benefits in the amounts and at the times anticipated; changes in management’s assumptions; the risks associated with transitions in supply arrangements; risks that legal proceedings may be initiated related to the transactions; the amount of costs, fees, expenses and charges incurred by Walgreens and Alliance Boots related to the transactions; the ability to retain key personnel; changes in financial markets, interest rates and foreign currency exchange rates; the risks associated with international business operations; the risk of unexpected costs, liabilities or delays; changes in network participation and reimbursement and other terms; risks associated with the operation and growth of our customer loyalty program; risks associated with outcomes of legal and regulatory matters, and changes in legislation, regulations or interpretations thereof; and other factors described in Item 1A (Risk Factors) of our most recent Form 10-K and Form 10-Q, each of which is incorporated herein by reference, and in other documents that we file or furnish with the SEC. 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 release, whether as a result of new information, future events, changes in assumptions or otherwise.

Non-GAAP Financial Measures. This press release contains certain non-GAAP financial measures, as defined under SEC rules, that are not calculated or presented in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are presented supplementally because management evaluates 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. 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. The supplemental non-GAAP financial measures presented should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, our financial measures determined in accordance with GAAP.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. In connection with the proposed transactions between Walgreens and Alliance Boots, Walgreens Boots Alliance will file with the Securities and Exchange Commission (SEC) a registration statement on Form S-4 that will include a proxy statement of Walgreens that also constitutes a prospectus of Walgreens Boots Alliance. After the registration statement has been declared effective by the SEC, the definitive proxy statement/prospectus will be delivered to shareholders of Walgreens. INVESTORS AND SECURITY HOLDERS OF WALGREENS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE TRANSACTIONS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS. Investors and security holders will be able to obtain free copies of the registration statement and the definitive proxy statement/prospectus (when available) and other documents filed with the SEC by Walgreens or Walgreens Boots Alliance through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Walgreens or Walgreens Boots Alliance will be available free of charge on Walgreens’ internet website at www.walgreens.com under the heading “Investor Relations” and then under the heading “SEC Filings” or by contacting Walgreen’s Investor Relations Department at (847) 315-2361.


108 Wilmot Road, Deerfield, Illinois		60015
(Address of principal executive offices)		(Zip Code)


Exhibit		Description

2.1		Amendment No. 1, dated August 5, 2014, to the Purchase and Option Agreement and Walgreen Co. Shareholders Agreement, by and among Walgreen Co., Alliance Boots GmbH, AB Acquisitions Holdings Limited, Walgreen Scotland Investments LP, KKR Sprint (European II) Limited, KKR Sprint (2006) Limited and KKR Sprint (KPE) Limited, Alliance Santé Participations S.A., Stefano Pessina and Kohlberg Kravis Roberts & Co. L.P.*

99.1		Walgreen Co. investor presentation dated August 6, 2014

99.2		Transcript of Walgreen Co. August 6, 2014 conference call

99.3		Walgreen Co. press release dated August 6, 2014


KKR SPRINT (EUROPEAN II) LIMITED

By:	/s/ William J. Janetschek
	Name:	William J. Janetschek
	Title:	Director

KKR SPRINT (2006) LIMITED

By:	/s/ William J. Janetschek
	Name:	William J. Janetschek
	Title:	Director

KKR SPRINT (KPE) LIMITED

By:	/s/ William J. Janetschek
	Name:	William J. Janetschek
	Title:	Director

KOHLBERG KRAVIS ROBERTS & CO. L.P.

By:	/s/ William J. Janetschek
	Name:	William J. Janetschek
	Title:	Authorized Signatory


ALLIANCE SANTÉ PARTICIPATIONS S.A.

By:	/s/ Stefano Pessina
	Name:	Stefano Pessina
	Title:	Administrateur (director)

/s/ Stefano Pessina
STEFANO PESSINA