J.P. Morgan Healthcare Conference

J.P. Morgan Healthcare Conference January 15, 2014 Greg Wasson President and CEO 2 1

Safe Harbor and Non-GAAP Certain statements and projections of future results made in these presentations constitute forward-looking statements that are based on current market, competitive and regulatory expectations that involve risk and uncertainty. Except to the extent required by the law, we undertake no obligation to update publicly any forward-looking statement after these presentations, whether as a result of new information, future events, changes in assumptions or otherwise. Please see our latest Form 10-K &10-Q filings for a discussion of risk factors as they relate to forward-looking statements. Today s presentation includes certain non-gaap financial measures, and we refer you to the Appendix to the presentation materials available on our investor relations website for reconciliations to the most directly comparable GAAP financial measures and related information. 3 A Walgreens Welcome to San Francisco 135 Powell St. San Francisco (Corner of Powell and O Farrell) 4 2

Our Journey Over the Past 5 Years Slowed store openings to focus on core Strategic acquisitions brought leading-edge concepts Launched Balance Rewards loyalty program Alliance Boots partnership and longterm strategic relationship with AmerisourceBergen 5 Our Purpose and Vision Our Purpose... To help people get, stay and live well Our Vision... To be the first choice in healthy and daily living for everyone in America and beyond 6 3

Our Strategic Growth Drivers Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform 7 Creating Value for our Shareholders Our Progress over the Past 5 Years GAAP Net Earnings: ~$11B Adjusted Net Earnings: ~$13B* Operating Cash Flow: ~$20B Total Shareholder Return: 145% * Non-GAAP Financial Measures see Appendix. 8 4

Today s Agenda Industry Trends Strategic Growth Drivers Value Creation 9 Dynamic Industry - Healthcare Healthcare spend is 17% of GDP, growing to 20% by 2020 10,000 Americans turning 65 daily -- spending twice as much on healthcare Healthcare reform adding 30 million insured Americans 10 5

Dynamic Industry - Healthcare 70% of Americans who visit the ER don t have or don t utilize a primary care physician Emerging healthcare delivery models Shifting from fee-for-service to payfor-performance RPh w/ patient 11 Dynamic Industry - Retail Consumers looking for value Blurring of retail channels Growing digital commerce 12 6

How Walgreens is Best Positioned 8,200 health and daily living destinations 70,000 of the most trusted professionals in healthcare 400 healthcare clinics 370 worksite clinics 200 health system pharmacies 75 infusion pharmacies 2 central fill mail facilities 2 central specialty care centers How Walgreens is Best Positioned Over 11,000 stores and 370 distribution centers operating in 25 countries* *Including associates and joint ventures of Alliance Boots 14 7

Our Strategic Growth Drivers Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform 15 Creating a Well Experience Opened or converted more than 600 Well Experience locations to date Extraordinary customer care Right products and solutions Every community in America 16 8

Stepping Out to Create Something New & Unique... Manhattan Beach, CA Flagship, Chicago Johns Hopkins Medical Net Zero, Evanston, IL 17 Accelerated Daily Living Trends 3% Front End Comp Store Sales % Change 2% YOY % Change 1% 0% -1% -2% -3% Dec Jan Feb Mar/Apr May June July One - Year % Change Two - Year Stack Aug Sep Oct Nov Dec One-Year -2.3% -0.4% -1.4% -0.2% 1.2% 0.8% 2.3% 2.2% 2.9% 2.3% 1.9% 2.5% Two-Year -1.7% 1.2% 0.6% -0.7% 0.2% -0.2% -0.1% 1.6% 1.4% -0.6% 0.2% 0.2% *February FE Comp excludes the benefit of Leap Day FY 2013 FY 2014 18 9

Our Strategic Growth Drivers Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform 19 Advancing Community Pharmacy Patient Adherence Improves Outcomes Increased pharmacist time with patient Non-adherence costs U.S. healthcare system $300B/year Studies find improved adherence after one on one consultation with pharmacist 1. Outcomes Pharmaceutical Health Care, 2011. 2. www.dhs.state.mn.us/main/groups/business_partners/documents/pub/dhs16_140283.pdf. Accessed April 24, 2012. 3. Isetts BJ et al. Am J Pharm Assoc. 2008;48:203-214. 20 10

Advancing Community Pharmacy Growing Immunizations Estimated Size of US Immunization Market* Hep A/ Hep B Meningitis Pneumococcal/ Zoster/ Varicella $1.5B $0.9B $1.2B TetDipPertussis/Td $1.2B $10.3B $2.0B Seasonal Influenza $3.5B HPV Walgreens Immunizations Administered 10 Millions 8.7 8 7.4 6.8 6.7 6 4 2 0.8 0 FY09 FY10 FY11 FY12 FY13 *Walgreen Co. Estimates 21 Advancing Community Pharmacy Centers of Excellence (COE) COE staffed by specially trained pharmacists 89% of the US HIV population has access to one of our 750 HIV Centers of Excellence Expanding centers for other complex diseases like multiple sclerosis and cystic fibrosis 22 11

Advancing Community Pharmacy Expanding the Offering at Healthcare Clinics 23 Advancing Community Pharmacy Innovative Offerings: Diagnostics Lab tests on samples as small as 1/1,000 the size of a typical blood draw Results to you and your doctor in less than four hours, on average Pricing dramatically low rates and accepting major insurance carriers as well as Medicare and Medicaid. 24 12

Advancing Community Pharmacy Specialty and Infusion Specialty is the fastest growing pharmacy segment -- with 3% of the population projected to drive 50% of total drug spend by 2017 Walgreens is well positioned with the integrated multi-channel assets in place Offering the largest home infusion network in the nation 25 Advancing Community Pharmacy Differentiated Experience Accessible pharmacist Mobile/online Privacy for health tests Integrated healthcare Convenient prescription pick-up 26 13

Advancing Community Pharmacy Focusing on Patient Care through Strategic Partnerships Johns Hopkins Medicine Stanford University Cancer Research Center 27 Advancing Community Pharmacy Walgreens Well Transitions Program Overall Unplanned Admissions Hospitals <30 Days by TIme Well Transitions Procedure: -Bedside delivery of discharge medications -Medication reconciliation -Two follow-up phone calls to reinforce adherence -Continuity with Walgreens community pharmacists Readmissions % 25% 20% 15% 10% 5% Patients eligible but not enrolled Patients enrolled in program 20.0% 18.4% 13.1% 12.8% 21.3% 10.0% 0% CY13 Q1 CY13 Q2 CY13 Q3 28 14

Advancing Community Pharmacy Building Physician Partnerships 29 Advancing Community Pharmacy Winning Medicare Part D Preferred Plans Med D Volume Growth 52wks through Nov 2013 vs LY. 30-day equivalent prescriptions Market 14.1% Walgreens 21.2% Other Chain Drug 14.0% Independents 8.0% Food 17.3% Mass 13.4% 30 15

Advancing Community Pharmacy 90-Day at Retail Walgreens 90-Day at Retail Prescriptions 250 200 150 100 50 (30-Day Equivalents) Millions +22.2% CAGR 208 178 145 113 93 Growth in Industry Mail Prescriptions* 2% 1.1% 0.0% 0.3% 0% -2% -4% -6% -5.8% -8% -7.6% 0 FY09 FY10 FY11 FY12 FY13-10% FY09 FY10 FY11 FY12 FY13 *IMS Data 31 Solid Script Momentum 8% Script Comp Store % Change 6% YOY % Change 4% 2% 0% -2% -4% Dec Jan Feb Mar Apr May June One - Year % Change Two - Year Stack July Aug Sep Oct Nov Dec One-Year -2.2% 7.2% 6.4% 7.4% 6.0% 7.3% 7.2% 7.1% 7.7% 6.1% 6.1% 4.0% 3.6% Two-Year 0.6% -1.1% -1.9% -1.2% -2.1% -1.7% -2.1% -0.6% 0.7% -0.4% 0.5% 1.1% 1.4% Comp Data Adjustments: Day Fall, 90 Day, Flu Shot, and Flu Script FY 2013 FY 2014 32 16

Our Strategic Growth Drivers... Creating a Well Experience Advancing Community Pharmacy Establishing an Efficient Global Platform 33 Establishing an Efficient Global Platform Greater Scale and Global Reach Streamline global pharmaceutical supply chain Increase patient access to pharmaceuticals Easier for Pharma to bring new products and solutions to market Global sourcing benefits 34 17

Establishing an Efficient Global Platform Synergy Work Streams Six Synergy Work Streams Generics Branded Products (Pharma) Combined Synergies with Alliance Boots $1B $1,000 $800 Branded Products (Non-Pharma) Own Brands and General Merch. $600 $400 $350M- $400M Goods not for Resale Front of Store Growth $200 $154M $0 FY13 FY14E FY16 Goal Forward-Looking Statements See cautionary note in attached Appendix. 35 Establishing an Efficient Global Platform AmerisourceBergen Distribution Agreement Strategic Collaboration Equity Alignment 36 18

Progress on Long-Term Goals... FY 2016 Goals + Revenue Operating Income (GAAP) Adjusted Operating Income* Synergies Operating Cash Flow >$130 Billion $8.5 - $9.0 Billion $9.0 - $9.5 Billion $1 Billion ~$8 Billion Net Debt** ~$11 Billion Forward-Looking Statements See cautionary note in attached Appendix. All figures assume constant currency and exercise of option to acquire remaining 55% interest. All financial goals assume no major mergers and acquisitions or strategic transactions. * Non-GAAP Financial Measures see Appendix. ** Net debt defined as balance sheet debt less cash and cash equivalents. Net debt excludes lease obligations. ~ 1.1B shares projected to be outstanding in FY 2016. Projected shares outstanding assumes no share repurchases. 37 Capital Allocation for Future Value Creation Maintain Strong Balance Sheet and Financial Flexibility Reinvest in Core Strategies Return Cash to Shareholders Invest in Strategic Opportunities 38 19

Reinvesting in Core Strategies Over Past 5 Years Cumulative Cap Ex: ~$7B New Locations: 1,648 Well Experience Stores: 600 39 Investing in Strategic Opportunities Over Past 5 Years, Cumulative M&A & Strategic Investments: ~$10B* Retail Consolidation Omni-Channel Access Snyder s Strategic Partnerships Healthcare Expansion *Includes cash and equity investments Crescent Healthcare Omnicare Infusion Cardinal Specialty Rx Solutions McKesson Specialty BioScrip Specialty 40 20

Dividend and Total Shareholder Return $ 1.40 Dividends Paid per Fiscal Year in Dollars $1.26 1.20 1 Year Total Shareholder Return CAGR --- 60.3% 1.00 5 Year Total Shareholder Return CAGR --- 20.8% 0.80 0.60 20 Year Total Shareholder Return CAGR --- 14.6% 0.40 0.20 0.00 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E At the Corner of Happy and Healthy 42 21

Appendix The following information provides reconciliations of the supplemental non-gaap financial measures, as defined under SEC rules, presented in this presentation to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP). The company has provided these non-gaap financial measures in the presentation, which are not calculated or presented in accordance with GAAP, as supplemental information in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-gaap financial measures are presented because management has evaluated the company s financial results both including and excluding the adjusted items and believes that the non-gaap financial measures presented provide additional perspective and insights when analyzing the core operating performance of the Company s business from period to period and trends in the company s historical operating results. These supplemental non-gaap financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented in the presentation. The company does not provide a non-gaap reconciliation for non-gaap estimates on a forward-looking basis where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. 43 Reconciliation of Adjusted Net Earnings Net Earnings (GAAP) Acquisition Related Costs Hurricane Sandy Acquisition Related Amortization LIFO Provision $ in Millions Gain on WHI Sale Fair Market Value of warrants Adjustment DEA Settlement Costs Medicare Part D Organizational Efficiency Costs Alliance Boots Related Tax Adjusted Net Earnings (Non-GAAP) Fiscal 2009 Q1 408 - - 22 27 - - - - - - 457 Q2 640 - - 22 31 - - - - - - 693 Q3 522 - - 24 20 - - - - - - 566 Q4 348 - - 26 31 - - - - - - 493 Full Year 2,006 - - 94 109 - - - - - - 2,209 Fiscal 2010 Q1 489 - - 25 20 - - - - - - 534 Q2 669 - - 24 17 - - - - - - 710 Q3 463 - - 33 11 - - - 43 - - 550 Q4 470 - - 34 39 - - - - - - 543 Full Year 2,091 - - 116 87 - - - 43 - - 2,337 Fiscal 2011 Q1 580 - - 33 26 - - - - - - 639 Q2 739 - - 28 35 - - - - - - 802 Q3 603 - - 35 32 - - - - - - 670 Q4 792 - - 42 38 (273) - - - - - 599 Full Year 2,714 - - 138 131 (273) - - - - - 2,710 Fiscal 2012 Q1 554 - - 37 28 - - - - - - 619 Q2 683 - - 39 45 - - - - - - 767 Q3 537 12-41 38 - - - - - - 628 Q4 353 70-45 85 - - - - - - 553 Full Year 2,127 82-161 195 - - - - - - 2,565 Fiscal 2013 Q1 413 23 24 59 34 - - - - - - 553 Q2 756 13-71 46 (13) - - - - 42 915 Q3 624 17-52 76 - (48) 47 - - 44 812 Q4 657 7-59 (5) - (62) - - 8 38 702 Full Year 2,450 60 24 241 151 (13) (110) 47-8 124 2,982 44 22

Fiscal 2014 Reconciliation of Adjusted Net Earnings Net Earnings (GAAP) Acquisition Related Costs Hurricane Sandy Acquisition Related Amortization LIFO Provision $ in Millions 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) Q1 695 16-58 37 - (161) - - 15 28 688 45 Reconciliation of Free Cash Flow $ in Millions 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Cash Flow from Operations (GAAP) $390 $1,116 $985 $548 $312 $1,428 $1,519 $852 Capital Expenditures (GAAP) (490) (553) (610) (572) (638) (454) (442) (393) Free Cash Flow (Non- GAAP)* ($100) $563 $375 ($24) ($326) $974 $1,077 $459 *Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. 46 23

Reconciliation of Free Cash Flow $ in Millions 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 Cash Flow from Operations (GAAP) $1,168 $595 $1,056 $925 $1,165 $886 $1,230 $362 Capital Expenditures (GAAP) (304) (220) (262) (228) (273) (196) (230) (514) Free Cash Flow (Non- GAAP)* $864 $375 $794 $697 $892 $690 $1,000 ($152) *Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. 47 Reconciliation of Free Cash Flow $ in Millions 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Cash Flow from Operations (GAAP) $809 $1,007 $1,847 $768 $601 $1,198 $1,379 $1,123 Capital Expenditures (GAAP) (419) (304) (379) (448) (336) (245) (293) (338) Free Cash Flow (Non- GAAP)* $390 $703 $1,468 $320 $265 $953 $1,086 $785 *Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. 48 24

Reconciliation of Free Cash Flow $ in Millions 1Q14 Cash Flow from Operations (GAAP) $133 Capital Expenditures (GAAP) (364) Free Cash Flow (Non-GAAP)* (231) *Free cash flow is defined as net cash provided by operating activities in a period minus additions to property and equipment (capital expenditures) made in that period. This measure does not represent residual cash flows available for discretionary expenditures as the measure does not deduct the payments required for debt service and other contractual obligations or payments for future business acquisitions. Therefore, we believe it is important to view free cash flow as a measure that provides supplemental information to our entire statements of cash flows. 49 Certain Definitions & Assumptions CERTAIN ASSUMPTIONS: Unless the context otherwise indicates or requires: This presentation assumes constant currency exchange rates after the date hereof based on current rates; References to the combined company and pro forma combined financial and other information assume that Walgreens has elected to exercise its option in Step 2 during the period in 2015 when it has the right to do so; Walgreens transaction with Alliance Boots does not include the benefit of Alliance Boots minority interest in Galenica Ltd., a Swiss healthcare group, so Walgreens shareholders will not benefit from the financial performance of Galenica Ltd. even though Alliance Boots proportionate interest in their profits is reflected in Alliance Boots financial statements for periods prior to May 10, 2013; and All financial goals assume no major mergers and acquisitions or other strategic transactions. Trading Profit - Profit from operations before amortization of customer relationships and brands, exceptional items and share of post-tax earnings of associates and joint ventures Historical Alliance Boots Financial Information Alliance Boots audited consolidated financial statements for the years ended March 31, 2013 and 2012 were filed as Exhibit 99.1 to the Walgreen Co. Form 8-K filed on May 15, 2013. Such financial statements of Alliance Boots were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS) and audited in accordance with auditing standards generally accepted in the United States. All descriptions of the company s agreements relating to Alliance Boots and the arrangements and transactions contemplated thereby in this presentation are qualified in their entirety by reference to the full text of the agreements, copies of which have been filed with the SEC. See the Company s Form 8-K filings on June 19, 2012, August 6, 2012, September 10, 2012 and September 13, 2012. All descriptions in this presentation of the agreements relating to the strategic long-term relationship with AmerisourceBergen announced by the Company and Alliance Boots on March 18, 2013 and the arrangements and transactions contemplated thereby are qualified in their entirety by reference to the description and the full text of the agreements in the Company s Form 8-K filing on March 20, 2013. 50 25

Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements. Statements in these materials and the accompanying presentation that are not historical, including, without limitation, estimates of future financial and operating performance, including the amounts and timing of future accretion and synergies, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "expect," "likely," "outlook," "forecast, "would," "could," "should," "can," "will," "project," "intend," "plan," "goal," target, "continue," "sustain," "synergy," "on track," "believe," "seek," "estimate," "anticipate," "may," "possible," "assume," variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, those relating to our commercial agreement with AmerisourceBergen, the arrangements and transactions contemplated by our Framework Agreement with AmerisourceBergen and Alliance Boots and their possible effects, the Purchase and Option Agreement and other agreements relating to our strategic partnership with Alliance Boots, the arrangements and transactions contemplated thereby and their possible effects, the parties' ability to realize anticipated synergies and achieve anticipated financial results, the risks associated with transitions in supply arrangements, the risks associated with international business operations, the risks associated with governance and control matters in minority investments, whether the option to acquire the remainder of the Alliance Boots equity interest will be exercised and the financial ramifications thereof, the risks associated with equity investments in AmerisourceBergen including whether the warrants to invest in AmerisourceBergen will be exercised and the financial ramifications thereof, changes in vendor, payer and customer relationships and terms, changes in network participation, the implementation, operation and growth of our customer loyalty program, changes in economic and market conditions, competition, risks associated with new business areas and activities, risks associated with acquisitions, joint ventures and strategic investments, the ability to realize anticipated results from capital expenditures and cost reduction initiatives, outcomes of legal and regulatory matters, and changes in legislation or regulations. These and other risks, assumptions and uncertainties are described in Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K, which is incorporated herein by reference, and in other documents that we file or furnish with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, Walgreens does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the initial distribution of this presentation, whether as a result of new information, future events, changes in assumptions or otherwise. 51 26