Rick Hans - Director of Finance

Hello and thanks for tuning in to Walgreen's audio webcast for the third quarter of fiscal year 2007. I’m Rick Hans, Walgreen's 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 third quarter earnings were up 19.6% to $561 million, or $0.56 cents per share diluted.

That came on a sales increase of 12.5% to $13.7 billion. This year’s quarter includes a $13.5 million credit from the resolution of a multi-year state tax matter, compared to a $13.6 million tax credit in the year-ago quarter from the settlement of prior years’ federal tax matters.

We also decreased our LIFO inflation index in the third quarter, resulting in a LIFO credit of $3.5 million this quarter versus a provision of $24.2 million in the year-ago period. The lower index reflects less inflation than anticipated among pharmacy inventories.