Walgreen (WAG) 8-K Walgreen Co. Reports Record Second Quarter 2006 Earnings

COMPARATIVE INCOME STATEMENT		2nd Qtr Ending: 02/28/2006				6 Months Ending: 02/28/2006
		Amounts in Millions		Favorable/-Unfavorable		Amounts in Millions		Favorable/-Unfavorable
PRELIMINARY		This Year	Last Year	Amount	Pct	This Year	Last Year	Amount	Pct
Net Sales		12,163.1	10,987.0	1,176.1	10.7%	23,063.5	20,876.1	2,187.4	10.5%
Costs and Deductions
	Cost of Sales	8,703.8	7,856.4	-847.4	-10.8%	16,601.7	15,037.6	-1,564.1	-10.4%
	Selling, Occupancy & Admin [1][2]	2,638.4	2,355.0	-283.4	-12.0%	5,099.1	4,556.8	-542.3	-11.9%
Operating Income		820.9	775.6	45.3	5.8%	1,362.7	1,281.7	81.0	6.3%
	Net Other, Income(Expense)	10.0	6.7	3.3	49.3%	16.8	11.8	5.0	42.4%
Earnings Before Taxes		830.9	782.3	48.6	6.2%	1,379.5	1,293.5	86.0	6.6%
	Income Taxes	307.4	291.4	-16.0	-5.5%	510.4	474.0	-36.4	-7.7%
Earnings After Taxes		523.5	490.9	32.6	6.6%	869.1	819.5	49.6	6.1%
[1]	2005 Drug antitrust litigation settlement gains: 1st Qtr - $15.0; 2nd Qtr - $4.7
[2]	Fiscal 2006 includes expenses for employee stock option programs, in accordance
	with the Company's adoption of SFAS No. 123R: 1st Qtr - $36.2; 2nd Qtr - $27.4
Earnings Per Share - Basic		$ 0.52	$ 0.48	$ 0.04	8.3%	$ 0.86	$ 0.80	$ 0.06	7.5%
Earnings Per Share - Diluted		$ 0.51	$ 0.48	$ 0.03	6.3%	$ 0.85	$ 0.80	$ 0.05	6.3%
Dividends Per Share		$ 0.06500	$ 0.05250	$ 0.01250	23.8%	$ 0.13000	$ 0.10500	$ 0.02500	23.8%
Weighted Avg Shares Basic		1,010.7	1,021.6			1,011.7	1,022.3
Weighted Avg Shares Diluted		1,020.0	1,029.6			1,021.1	1,029.7
Return on Avg Shareholder Equity		5.7%	5.8%			9.5%	9.8%
Effective Income Tax Rate		37.00%	37.25%			37.00%	36.64%
LIFO Charge/(Credit)		23.8	27.1			45.0	45.6

INCOME STATEMENT SUMMARY		1st Qtr Ending: 11/30/2005			2nd Qtr Ending: 02/28/2006			6 Months Ending: 02/28/2006
		% of	% to Sales		% of	% to Sales		% of	% to Sales
PRELIMINARY		Chg	2005	2004	Chg	2006	2005	Chg	2006	2005
Net Sales		10.2%	100.00	100.00	10.7%	100.00	100.00	10.5%	100.00	100.00
Costs and Deductions
	Cost of Sales	10.0%	72.46	72.62	10.8%	71.56	71.51	10.4%	71.98	72.03
	Selling, Occupancy & Admin [1][2]	11.8%	22.57	22.26	12.0%	21.69	21.43	11.9%	22.11	21.83
	Sub-Total	10.4%	95.03	94.88	11.1%	93.25	92.94	10.8%	94.09	93.86
Earnings Before Other Income		7.1%	4.97	5.12	5.8%	6.75	7.06	6.3%	5.91	6.14
	Net Other, Income(Expense)	33.3%	0.06	0.05	49.3%	0.08	0.06	42.4%	0.07	0.06
Earnings Before Taxes		7.3%	5.03	5.17	6.2%	6.83	7.12	6.6%	5.98	6.20
	Effective Income Tax Rate		37.00%	35.72%		37.00%	37.25%		37.00%	36.64%
Earnings After Taxes		5.2%	3.17	3.32	6.6%	4.30	4.47	6.1%	3.77	3.93
[1]	2005 Drug antitrust litigation settlement gains: 1st Qtr - $15.0; 2nd Qtr - $4.7
[2]	Fiscal 2006 includes expenses for employee stock option programs, in accordance
	with the Company's adoption of SFAS No. 123R: 1st Qtr - $36.2; 2nd Qtr - $27.4

									PRELIMINARY							CONTINUING OPERATIONS
		Total	Percent Change in Sales				Key Operating Ratios			Other Items			Company Income and Return on Sales
		Company	Total	Drug Stores			Gross	[1]	Op	Net	Other		Pre-Tax	Tax	Income After Taxes
Period		Sales	Co	Total	Comp	Est	Profit	SGA	Income	Interest	Income	% Sales	% Sales	Rate	Amount	% Sales	% Chg
		Amounts in Millions
04-Q1		8,720.8	16.5	16.5	11.9	10.4	26.37	21.79	4.58	2.8	0.0	0.03	4.61	37.50	251.5	2.88	9.9
04-Q2		9,782.2	15.8	15.8	11.5	9.9	27.66	20.64	7.02	4.0	0.0	0.04	7.06	37.50	431.6	4.41	17.0
04-Q3		9,578.5	15.0	15.0	10.4	8.7	26.91	21.23	5.68	3.6	0.0	0.04	5.72	37.50	342.3	3.57	16.4
04-Q4		9,426.7	14.3	14.3	9.7	7.8	27.73	22.30	5.43	6.9	0.0	0.08	5.51	37.50	324.4	3.44	18.7
2004		37,508.2	15.4	15.4	10.9	9.3	27.19	21.48	5.71	17.3	0.0	0.05	5.76	37.50	1,349.8	3.60	15.9
		Amounts in Millions
05-Q1		9,889.1	13.4	13.4	9.4	7.9	27.38	22.26	5.12	5.1	0.0	0.05	5.17	35.72	328.6	3.32	30.7
05-Q2		10,987.0	12.3	12.3	7.7	6.2	28.49	21.43	7.06	6.7	0.0	0.06	7.12	37.25	490.9	4.47	13.7
05-Q3		10,830.6	13.1	13.1	8.7	7.0	27.85	21.90	5.95	10.9	0.0	0.10	6.05	37.25	411.0	3.79	20.1
05-Q4		10,494.9	11.3	11.3	7.0	5.3	27.95	23.20	4.75	8.9	0.0	0.08	4.83	35.12	329.0	3.13	1.4
2005		42,201.6	12.5	12.5	8.2	6.7	27.93	22.19	5.74	31.6	0.0	0.08	5.82	36.49	1,559.5	3.70	15.5
		Amounts in Millions
06-Q1		10,900.4	10.2	10.2	7.2	5.9	27.54	22.57	4.97	6.8	0.0	0.06	5.03	37.00	345.6	3.17	5.2
06-Q2		12,163.1	10.7	10.7	6.5	5.3	28.44	21.69	6.75	10.0	0.0	0.08	6.83	37.00	523.5	4.30	6.6
06-Q3
06-Q4
2006		23,063.5	10.5	10.5	6.8	5.6	28.02	22.11	5.91	16.8	0.0	0.07	5.98	37.00	869.1	3.77	6.1
[1]	Includes the following items:
A)		2004 Drug antitrust litigation settlement gains: 2nd Qtr - (2 Totaling) $12.7; 3rd Qtr - $3.0; 4th Qtr - $0.6
B)		2005 Drug antitrust litigation settlement gains: 1st Qtr - $15.0; 2nd Qtr - $4.7; 3rd Qtr - $6.6
C)		4th Qtr 2005 includes $54.7 loss for Hurricane Katrina
D)		Fiscal 2006 includes expenses for employee stock option programs, in accordance with the Company's adoption of SFAS No. 123R: 1st Qtr - $36.2; 2nd Qtr - $27.4

												LOCATION COUNT AND MONTHLY SALES INCREASES
									PRELIMINARY
Number of Locations [1]
					Six				Nine				Total
		1st Qtr	2nd Qtr		Mos		3rd Qtr		Mos		4th Qtr		Year
2003-04	Start of Period	4,252	4,316		4,252		4,364		4,252		4,442		4,252
	Opened	85	58		143		89		232		211		443
	Relocation	-20	-6		-26		-9		-35		-34		-69
	Closed	-1	-4		-5		-2		-7		-6		-13
	End of Period	4,316	4,364		4,364		4,442		4,442		4,613		4,613
2004-05	Start of Period	4,613	4,711		4,613		4,769		4,613		4,837		4,613
	Opened	113	67		180		87		267		173		440
	Relocation	-12	-7		-19		-18		-37		-22		-59
	Closed	-3	-2		-5		-1		-6		-3		-9
	End of Period	4,711	4,769		4,769		4,837		4,837		4,985		4,985
2005-06	Start of Period [A]	4,985	5,068		4,985
	Opened [B]	127	95		222
	Relocation	-15	-6		-21
	Closed [2]	-29	-1		-30
	End of Period	5,068	5,156		5,156
[1]	Location counts have been restated to include the Home Care Division and Senior Pharmacies
	A) Includes 32 Home Care Division locations
	B) Includes 3 Senior Med locations
[2]	Includes 22 Katrina damaged stores
Monthly Sales Percent Increases
		Sep	Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Year
	2003-04	17.8	16.6	15.3	17.7	13.2	16.3	17.4	15.1	12.6	15.5	13.4	14.1	15.4
	2004-05	13.2	11.8	15.2	8.9	14.6	14.3	16.1	9.6	13.4	12.0	10.1	11.9	12.5
	2005-06	10.4	9.0	11.2	10.3	11.9	10.0							10.5

						PRELIMINARY
INTERIM HIGHLIGHTS				Six		Nine		Total
		1st Qtr	2nd Qtr	Mos	3rd Qtr	Mos	4th Qtr	Year
Total Sales	2003-04	8,720.8	9,782.2	18,503.0	9,578.5	28,081.5	9,426.7	37,508.2
(In Millions)	2004-05	9,889.1	10,987.0	20,876.1	10,830.6	31,706.7	10,494.9	42,201.6
	2005-06	10,900.4	12,163.1	23,063.5
% of Increase	2003-04	16.5%	15.8%	16.1%	15.0%	15.8%	14.3%	15.4%
	2004-05	13.4%	12.3%	12.8%	13.1%	12.9%	11.3%	12.5%
	2005-06	10.2%	10.7%	10.5%
Net Income [1]	2003-04	251.5	431.6	683.1	342.3	1,025.4	324.4	1,349.8
(In Millions)	2004-05	328.6	490.9	819.5	411.0	1,230.5	329.0	1,559.5
	2005-06	345.6	523.5	869.1
% of Increase	2003-04	9.9%	17.0%	14.3%	16.4%	15.0%	18.7%	15.9%
	2004-05	30.7%	13.7%	20.0%	20.1%	20.0%	1.4%	15.5%
	2005-06	5.2%	6.6%	6.1%
Diluted [1]
Earnings Per Share	2003-04	$ 0.24	$ 0.42	$ 0.66	$ 0.33	$ 0.99	$ 0.32	$ 1.31
	2004-05	$ 0.32	$ 0.48	$ 0.80	$ 0.40	$ 1.20	$ 0.32	$ 1.52
	2005-06	$ 0.34	$ 0.51	$ 0.85
[1] Includes the following pre-tax items:
A)	2004 Drug antitrust litigation settlement gains: 2nd Qtr - (2 Totaling) $12.7; 3rd Qtr - $3.0; 4th Qtr - $0.6
B)	2005 Drug antitrust litigation settlement gains: 1st Qtr - $15.0; 2nd Qtr - $4.7; 3rd Qtr - $6.6
C)	4th Qtr 2005 includes $54.7 loss for Hurricane Katrina
D)	Fiscal 2006 includes expenses for employee stock option programs, in accordance with the Company's adoption of SFAS No. 123R: 1st Qtr - $36.2; 2nd Qtr - $27.4

								PRELIMINARY
	CONSOLIDATED BALANCE SHEET			Feb 28	Feb 28				Feb 28	Feb 28
				2006	2005				2006	2005
	Current Assets		(Amounts in Millions)             Current Liabilities
		Cash & Equivalents		578.8	453.1		Short Term Borrowings		0.0	0.0
		Short Term Investments Available For Sale		646.0	994.1		Trade Accounts Payable		3,270.2	2,811.4
		Accounts Receivable, Less Allowance		1,848.2	1,483.0		Other Current Liabilities		1,506.2	1,291.5
		Inventories		5,616.0	5,159.9		Income Taxes		193.2	203.9
		Other Current Assets		220.7	176.1		Total Current Liabilities		4,969.6	4,306.8
		Total Current Assets		8,909.7	8,266.2
	Non-Current Assets					Non-Current Liabilities
		Property and Equipment		6,501.4	5,780.3		Deferred Income Taxes		171.2	264.7
		Other Non-Current Assets		228.0	127.5		Other Non-Current Liabilities		1,045.2	937.3
		Total Non-Current Assets		6,729.4	5,907.8		Total Non-Current Liabilities		1,216.4	1,202.0
						Total Liabilities			6,186.0	5,508.8
						Shareholders' Equity			9,453.1	8,665.2
Total Assets				15,639.1	14,174.0	Total Liabilities & Equity			15,639.1	14,174.0
	STATEMENT OF CASH FLOWS			Feb 28	Feb 28				Feb 28	Feb 28
				2006	2005				2006	2005
	Cash Flows from Operating Activities		(Amounts in Millions)			Cash Flows from Investing Activities:
		Net Income		869.1	819.5		Purchases of Short-Term Investments-Available for Sale		(4,018.0)	(5,080.2)
		Depreciation & Amortization		271.7	228.0		Proceeds from Sale of Short-Term Investments-Available for Sale		3,874.2	5,346.0
		Inc Tax Savings From Employee Stock Plans		17.6	14.6		Additions to Property and Equipment		(601.2)	(568.4)
		Deferred Income Taxes		(74.0)	(20.6)		Dispositions of Property and Equipment		2.4	1.8
		Other		37.2	36.3		Business Acquisitions, Net of Cash Received		(131.3)	0.0
		Stock Compensation Expense		60.2	0.0
						Net Cash Used for Investing Activities			(873.9)	(300.8)
						Cash Flows from Financing Activities:
							Stock Purchases		(344.7)	(284.5)
							Proceeds Related to Employee Stock Plans		98.4	91.8
	Changes in Current Assets & Liabilities:						Cash Dividends Paid		(131.7)	(107.5)
		Inventory		(13.3)	(421.3)		Other		(12.4)	23.2
		Trade Accounts Payable		346.6	170.0
		Accrued Expenses & Liabilities		(2.9)	(113.7)	Net Cash Used for Financing Activities			(390.4)	(277.0)
		Income Taxes		122.2	137.9
		Accounts Receivable		(439.2)	(310.7)	Changes In Cash & Cash Equivalents:
		Insurance Reserve		30.8	50.6		Net Increase in Cash & Cash Equivalents		2.0	9.1
		Other Current Assets		40.3	(3.7)		Cash & Cash Equivalents at Beginning of Year		576.8	444.0
	Net Cash Provided by Operating Activities			1,266.3	586.9	Cash & Cash Equivalents at End of Period			578.8	453.1