Q2 2013 Earnings Call Transcript

Transcript Call Date 03/19/2013

Operator: Good day, ladies and gentlemen, and welcome to the Walgreen Second Quarter 2013 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded.

I'd now like to introduce your host for today's conference Rick Hans, Divisional Vice President of Investor Relations.

Rick J. Hans - Divisional VP of IR and Finance: Thank you, Bethany. Good morning, everyone. Today, Greg Wasson, President and CEO; and Wade Miquelon, Executive Vice President, CFO and President International will discuss the quarter and this morning's announcement about our strategic long-term relationship with AmerisourceBergen.

As a reminder, today's presentation includes certain non-GAAP financial measures, and I would direct you to our website at for reconciliations to 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. 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 Forms 10-K and 10-Q and subsequent 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 the highlights of our results for the quarter. Then I'll touch on our announcement earlier today on the Walgreens and Alliance Boots strategic long-term relationship with AmerisourceBergen and how that carries forward one of our three key strategic growth drivers to create an unprecedented global platform through our Alliance Boots partnerships. After that, I'll turn the call over to Wade for more information on our performance this quarter and details of the Walgreens-Alliance Boots and AmerisourceBergen announcement.

Turning to our overall financial results, we are pleased to report a solid quarter, with adjusted earnings of $0.96 per diluted share and GAAP diluted EPS of $0.79. With that performance were a number of highlights. First, we had operating cash flow for the second quarter of $1.2 billion and free cash flow came in at $953 million. Second, our balance rewards program continues to show a strong response from our customers, with more than $60 million customers enrolled. Third, the Alliance Boots business and synergies are on track with our expectations, with accretion to our adjusted EPS of $0.05.

Finally, this morning's announcement of our strategic long-term relationship with AmerisourceBergen demonstrates how we continue to move forward on our strategy to create a global network of pharmacy-led health and well-being with Alliance Boots.

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