Rick Hans - Director of Finance

Hello, and thanks for tuning in to Walgreens audio webcast for the second quarter of fiscal year 2007. I’m Rick Hans, Walgreens Director of Finance, and I invite you to use this information in conjunction with the press release and other financial information posted on our web site. Before we begin, I’d like to go over the safe harbor language. Certain statements and projections of future results made in this presentation constitute forward-looking information that is based on current market, competitive and regulatory expectations that involve risk and uncertainty. Please see our Form 10-K, as amended, for the fiscal year ended August 31, 2006, for a discussion of factors as they relate to forward-looking statements. Today we announced second quarter earnings were up 24.5% to $652 million, or $0.65 per share diluted. That came on a sales increase of 14.6% to $13.9 billion. For the first six months of fiscal 2007, sales increased 15.5% to $26.6 billion. Net earnings rose 24.7% to $1.08 billion or $1.07 per share, diluted. A strong Christmas season led our front-end sales in the quarter. In fact, we gained market share in 58 of our top 60 core product categories versus our drugstore, grocery and mass merchant competitors compared to a year ago. This year’s store growth remains ahead of last year’s pace, as we plan for 500 new drugstores to open during fiscal 2007. We opened or acquired 223 new stores in the first half of this fiscal year, compared to 222 in the year-ago period. That brought our store count to 5,641 as of Feb. 28, a net increase of 485 from a year ago. We remain on track to operate more than 7,000 stores in 2010.

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