Q4 2011 Earnings Call Transcript

Transcript Call Date 09/27/2011

Operator: Good day, everyone, and welcome to the Walgreen Company Fourth Quarter 2011 Earnings Conference Call. As a reminder, today's call is being recorded. Now at this time, I'd like to turn the conference over to Mr. Rick Hans, Divisional VP of IR. Please go ahead, sir.

Rick J. Hans - Divisional VP of IR and Finance: Thank you, Cathy. Good morning, everyone. Welcome to our fourth quarter conference call. Today, Greg Wasson, our President and CEO; and Wade Miquelon, Executive Vice President and Chief Financial Officer will discuss the quarter and fiscal year. Also joining us on the call and available for questions is Kermit Crawford, our President of Pharmacy, Health and Wellness Services and Solutions; and Mark Wagner, President of Community Management. When we get to your questions, please limit yourself to one question.

As a reminder, today's presentation includes certain non-GAAP financial measures, and I would direct you to our website at for a reconciliation. Also, I'm available throughout the day by phone to answer any additional questions you may have. You can find a link to our webcast under 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 information that is based on current market, competitive, and regulatory expectations that involve risk and uncertainty. 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 the assumptions or otherwise. Please see our latest Form 10-K and 10-Q filings for a discussion of risk factors as they relate to forward-looking statements.

Now, I'll turn the call over to Greg.

Gregory D. Wasson - President and CEO: Thank you, Rick. Good morning, everyone, and thank you for joining us on our call. Today I'll begin with a review of our quarter and fiscal year; second, I'll provide an update on our status with Express Scripts; and finally I'll discuss our strategies to become America's first choice for health and daily living; and then I'll turn it over to Wade who will give you more details on our quarterly and full-year performance, offer context around Express Scripts, and frame the key considerations for fiscal year 2012.

Starting with our results today, we had a solid quarter and a strong year as we made substantial progress on our transformation strategy. As you saw on our release this morning, we reported record fourth quarter sales of $18 billion, up 6.5%, from $16.9 billion a year ago. Excluding the after-tax gain from the sale of WHI, our pharmacy benefit manager, which closed in June, fourth quarter EBIT increased to $832 million, fourth quarter net earnings were $519 million, and fourth-quarter earnings per diluted share increased to $0.57. Our earnings this quarter marked the fifth consecutive quarter of double-digit growth in earnings per share.

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