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S E C U R I T I E S A N D E X C H A N G E C O M M I S S I O N
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
FOR THE FISCAL YEAR ENDED AUGUST 31, 1995.
or
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the Transition Period From _________________ to _______________
Commission file number 1-604.
WALGREEN CO.
(Exact name of registrant as specified in its charter)
ILLINOIS 36-1924025
(State of incorporation) (I.R.S. Employer Identification No.)
200 WILMOT ROAD, DEERFIELD, ILLINOIS 60015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 940-2500
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
NEW YORK STOCK EXCHANGE
COMMON STOCK ($.3125 PAR VALUE) CHICAGO STOCK EXCHANGE
NEW YORK STOCK EXHCANGE
PREFERRED SHARE PURCHASE RIGHTS CHICAGO STOCK EXCHANGE
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K. [ ]
AS OF OCTOBER 31, 1995, THERE WERE 246,141,072 SHARES OF WALGREEN CO.
COMMON STOCK, PAR VALUE $.3125 PER SHARE, ISSUED AND OUTSTANDING AND THE
AGGREGATE MARKET VALUE OF SUCH COMMON STOCK HELD BY NON-AFFILIATES (BASED UPON
THE CLOSING TRANSACTION PRICE ON THE NEW YORK STOCK EXCHANGE) WAS APPROXIMATELY
$6,852,772,000.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE ANNUAL REPORT TO SHAREHOLDERS FOR THE YEAR ENDED AUGUST 31,
1995, ONLY TO THE EXTENT EXPRESSLY SO STATED HEREIN, ARE INCORPORATED BY
REFERENCE INTO PARTS I, II AND IV OF FORM 10-K. PORTIONS OF THE REGISTRANT'S
PROXY STATEMENT FOR ITS 1995 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JANUARY
10, 1996, ARE INCORPORATED BY REFERENCE INTO PART III OF FORM 10-K.
PART I
Item 1. Description of Business
(a) General development of business.
Walgreen Co. (the "company" or "Walgreens") is America's largest drugstore
retailer and during the fiscal year ended August 31, 1995, had net sales of
$10,395,096,000. The company served customers in 31 states and Puerto Rico
through 2,083 retail drugstores and 2 mail order facilities.
In fiscal 1995, the company opened 205 new drugstores and one mail service
facility, completed remodelings of 84 units, and closed 88 drugstores and one
mail service facility. In the last five fiscal years, the company has opened
763 new drugstores, 2 new mail service facilities, acquired 24 stores, completed
remodelings of 543 units and closed 263 drugstores and one mail service
facility. In addition, two major distribution centers were added during the
five-year period and one was closed.
Prescription sales were 43.4% of total sales for fiscal 1995 compared to
40.8% in 1994 and 38.2% in 1993. Pharmacy sales trends are expected to continue
primarily because of expansion into new markets, increased penetration in
existing markets and demographic changes such as the aging population.
The company expects to open 200 or more new stores annually for the next
five years, with the goal of operating 3,000 stores by the year 2000. Plans
during fiscal 1996 include opening 10 to 15 stores each in the new Dallas/Fort
Worth and Las Vegas markets, as well as four to five in Portland, Oregon. By
the end of fiscal 1996 more than 400 stores are expected to offer one-hour
photofinishing. Store implementation of Intercom Plus, an advanced pharmacy
computer and workflow system, is expected to be completed in fiscal 1997.
Healthcare Plus, the company's managed care subsidiary, has formed its own PBM
(pharmacy benefits manager) network and will begin serving new plans in January.
(b) Financial information about industry segments.
The company's primary business is the operation of retail drugstores.
(c) Narrative description of business.
(i) Principal products produced and services rendered.
The drugstores are engaged in the retail sale of prescription
and nonprescription drugs and carry additional product lines such
as general merchandise, liquor and beverages, cosmetics, toiletries
and tobacco.
1
The estimated contributions of various product classes to sales
for each of the last three fiscal years are as follows:
Percentage
Product Class 1995 1994 1993
Prescription Drugs 43% 41% 38%
General Merchandise * 24 24 25
Nonprescription Drugs * 13 13 14
Liquor, Beverages 8 9 10
Cosmetics, Toiletries * 8 9 9
Tobacco Products * 4 4 4
Total Sales 100% 100% 100%
====== ====== ======
* Estimated based, in part, on periodic sampling of
about 1% of retail units.
(ii) Status of a product or segment.
Not applicable.
(iii) Sources and availability of raw materials.
Inventories are purchased from numerous domestic and foreign
suppliers. The loss of any one supplier or group of suppliers under
common control would not have a material effect on the business.
Fuel and other sources of energy are relied upon for the
distribution of merchandise and in the general operations of the
retail stores. Increased energy costs over the years have not
materially increased the costs of operations.
(iv) Patents, trademarks, licenses, franchises and concessions
held.
Walgreens markets products under various trademarks and trade
names and holds assorted business licenses (pharmacy, occupational,
liquor, etc.) having various lives, which are necessary for the normal
operation of business.
(v) Seasonal variations in business.
The business is seasonal in nature, with Christmas generating
a higher proportion of sales and earnings than other periods. See the
caption "The Walgreen Year...A Review by Quarters" on Page 30 of the
Annual Report to Shareholders for the year ended August 31, 1995 ("Annual
Report"), which is ncorporated herein by reference.
(vi) Working capital practices.
During fiscal 1995 the company did obtain funds through the
placement of commercial paper. The company generally finances its
inventory and expansion needs with internally generated funds. However,
short-term borrowings are anticipated during fiscal 1996 to support
working capital needs.
2
Due to the nature of the retail drugstore business, sales are
principally for cash. Customer returns are immaterial.
(vii) Dependence upon limited number of customers.
Sales are to numerous customers which include health maintenance
organizations (HMOs); therefore, the loss of any one customer or a group
of customers under common control would not have a material effect on the
business. No customer accounts for ten percent or more of the company's
consolidated revenue.
(viii) Backlog Orders.
Not applicable.
(ix) Government contracts.
The company is not a party to any significant government
contracts.
(x) Competitive conditions.
The drug store industry is highly competitive. As one of the volume
leaders in the retail drug industry, Walgreens competes with various
retailers, including chain and independent drugstores, mail order
prescription providers, grocery, variety and discount department stores.
Competition remained keen during the fiscal year with the company
competing on the basis of price, convenience and variety. The company's
geographic dispersion tends to offset the impact of temporary economic
and competitive conditions in individual markets.
Sales by geographic area for fiscal 1995 were as follows:
Percent
State of Sales
Florida 19
Illinois 16
Texas 8
Arizona 7
California 6
Wisconsin 5
25 other states and Puerto Rico 39
100
===
(xi) Research and development activities.
The company does not engage in any material research activities.
(xii) Environmental disclosures.
Federal, state and local environmental protection requirements
have no material effect upon capital expenditures, earnings or
competitive position of the company.
(xiii) Number of employees.
The company employs approximately 68,800 persons, about 22,800
of whom are part-time employees working less than 30 hours per week.
3
(d) Financial information about foreign and domestic operations and
export sales.
All the company sales occur within the continental United States
and Puerto Rico. There are no export sales.
Item 2. Properties
The number and location of the company's drugstores is incorporated by
reference to the table under the caption "Walgreens Nationwide" on page 33 of
the Annual Report. Most of the company's drugstores are leased. The leases are
for various terms and periods. See the caption, "Leases" on page 26 of the
Annual Report, which section is incorporated herein by reference. The company
owns approximately 5% of the retail stores open at August 31, 1995. The
decision has been made to purchase, rather than lease, more store locations than
in the past. The company has an aggressive expansion program of adding new
stores and remodeling and repositioning existing stores. Net selling space of
drugstores was increased from 19.3 million to 20.7 million square feet at August
31, 1995. Over the past five years, approximately 60% of company stores have
been opened or remodeled.
The company's retail drugstore operations are supported by nine warehouses
with a total of approximately 3,385,000 square feet of space, of which 2,430,000
square feet is owned. The remaining space is leased with an option to buy. All
warehouses are served by electronic data processing systems for order processing
control, operating efficiencies and rapid merchandise delivery to stores. All
stores receive merchandise within two days of ordering. In addition, the
company uses public warehouses to handle distribution needs. In 1995, the
company opened the ninth warehouse in Woodland, California and added additional
warehouse space in Orlando, Florida. Distribution capacity is adequate now, but
as the company continues to expand, additional space will be needed to maintain
service levels. Studies are ongoing to determine where and when distribution
space will be added.
The company owns one mail service facility with a ground sublease and
leases a second facility. The combined square footage of the facilities is
approximately 120,000 square feet. There are four principal office facilities
containing approximately 500,000 square feet of which 400,000 square feet is
owned and the remainder is leased. The mail order and office facilities are
adequate for current needs.
Item 3. Legal Proceedings
The information in response to this item is incorporated herein by
reference to the caption "Contingencies" on page 27 of the Annual Report.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year.
4
EXECUTIVE OFFICERS OF THE REGISTRANT
The following information is furnished with respect to each executive
officer of the company as of August 31, 1995:
NAME AND BUSINESS EXPERIENCE AGE OFFICE HELD
Charles R. Walgreen III 59 Chairman of the Board,
Chairman of the Board since April Chief Executive Officer
1976 and Director
Chief Executive Officer since 1971
Director since 1963
L. Daniel Jorndt 54 President, Chief
Operating Officer and
President and Chief Operating Director
Officer since February 1990
Director since January 1990
Vernon A. Brunner 55 Executive Vice President
Executive Vice President since
February 1990
Glenn S. Kraiss 62 Executive Vice President
Executive Vice President since
February 1990
John R. Brown 59 Senior Vice President
Senior Vice President since
May 1985
Roger L. Polark 47 Senior Vice President
Senior Vice President and and Chief Financial
Chief Financial Officer since Officer
February 1995
Vice President since June 1988
John A. Rubino 54 Senior Vice President
Senior Vice President since July 1991
Vice President
October 1984 to July 1991
William A. Shiel 44 Senior Vice President
Senior Vice President since July 1993
Vice President
May 1985 to July 1993
Robert C. Atlas 60 Vice President
Vice President since September 1987
David W. Bernauer 51 Vice President
Chief Information Officer since
February 1995
Vice President since February 1990
Treasurer
February 1990 to June 1992
5
EXECUTIVE OFFICERS OF THE REGISTRANT - continued:
NAME AND BUSINESS EXPERIENCE AGE OFFICE HELD
W. Lynn Earnest 52 Vice President and
Vice President and Treasurer Treasurer
since July 1992
Regional Vice President
July 1980 to June 1992
Robert H. Halaska 55 Vice President
Vice President since April 1995
President, Walgreens Healthcare Plus,
Inc. since September 1991
Senior Vice President, Sales &
Marketing, Blue Cross/Blue
Shield of Illinois
February 1985 to September 1991
Jerome B. Karlin 53 Vice President
Vice President since September 1987
Julian A. Oettinger 56 Vice President,
Vice President, Secretary and Secretary and
General Counsel since January 1989 General Counsel
Roger H. Clausen 53 Controller
Controller since June 1988
There is no family relationship between any of the aforementioned officers
of the company.
6
PART II
Item 5. Market for the Registrant's Common Stock and Related Security
Holder Matters
The company's common stock is traded on the New York and Chicago
Stock Exchanges under the symbol WAG. As of October 31, 1995 there were
33,339 recordholders of company common stock according to the records
maintained by the company's transfer agent.
The range of the sales prices of the company's common stock by
quarters and the cash dividends declared per common share during the two
years ended August 31, 1995 are as follows:
Dividends Common Stock Prices
Declared 1995 1994
Quarter Ended 1995 1994 High Low High Low
November $.0975 $.085 $21 3/16 $18 1/2 $21 11/16 $18 7/16
February .0975 .085 24 20 1/4 21 1/8 18 7/8
May .0975 .085 24 13/16 22 13/16 21 3/8 19 15/16
August .0975 .085 26 9/16 23 5/8 20 5/16 17 1/16
Fiscal Year $. 39 $. 34 $26 9/16 $18 1/2 $21 11/16 $17 1/16
==========================================================================
Item 6. Selected Financial Data
The information in response to this item is incorporated herein by
reference to the caption "Eleven-Year Summary of Selected Consolidated
Financial Data" on pages 18 and 19 of the Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information in response to this item is incorporated herein by
reference to the caption "Management's Discussion and Analysis of Results
of Operations and Financial Condition" on pages 20 and 21 of the Annual
Report.
Item 8. Financial Statements and Supplementary Data
See Item 14.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
7
PART III
The information required for Items 10, 11 and 12, with the
exception of the information relating to the executive officers of the
Registrant, which is presented in Part I under the heading "Executive
Officers of the Registrant", is incorporated herein by reference to the
following sections of the Registrant's Proxy Statement:
Captions in Proxy Proxy Page Numbers
Names and ages of Director nominees,
their principal occupations and
other information 2
Securities Ownership of Directors and Executive 4 - 5
Officers
Executive Compensation 6 - 13
8
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Documents filed as part of this report
(1) The following financial statements, supplementary data, and auditors'
report appearing in the Annual Report are incorporated herein by
reference.
Annual Report
Page Number
Consolidated Statements of Earnings and Retained Earnings 22
for the years ended August 31, 1995, 1994 and 1993
Consolidated Balance Sheets at August 31, 1995 and 1994 23
Consolidated Statements of Cash Flows 24
for the years ended August 31, 1995, 1994 and 1993
Statement of Major Accounting Policies 25 - 26
Notes to Consolidated Financial Statements 26 - 28
Report of Independent Public Accountants 29
Summary of Quarterly Results for the years ended 30
August 31, 1995 and 1994 (Unaudited)
Walgreens Nationwide 33
(2) The following financial statement schedule and related auditors'
report are included herein.
10-K
Page Number
Schedule II Valuation and Qualifying Accounts 14
Report of Independent Public Accountants on Supplemental 15
Schedule
Schedules I, III, IV and V are not submitted because they are not
applicable or not required or because the required information is
included in the Financial
Statements in (1) above or notes thereto.
Other Financial Statements -
Separate financial statements of the registrant have been omitted
because it is primarily an operating company, and all its subsidiaries
are included in the consolidated financial statements.
9
(3) Exhibits 10(a) through 10(n) constitute management contracts or
compensatory plans or arrangements required to be filed as exhibits
pursuant to Item 14(c) of this Form 10-K.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during the quarter
ending August 31, 1995.
(c) Exhibits
3. (a) Articles of Incorporation of the company, as amended.
(b) By-Laws of the company, as amended and restated effective as
of February 1, 1990, filed as Exhibit 4.03 to the company's
Form S-8 Registration Statement on July 15, 1992
(Registration No. 33-49676), and incorporated by reference
herein.
4. (a) (i) Walgreen Co. Debt Securities Indenture dated as of
May 1, 1986, between the company and Harris Trust and
Savings Bank, Trustee, filed with the Securities and
Exchange Commission as Exhibit 4(c) to the company's
Form S-3 Registration Statement on May 22, 1986
(Registration No. 33-5903), and incorporated by
reference herein.
(ii) Walgreen Co. Resolutions of Pricing Committee Relating
to Debt Securities, filed with the Securities and
Exchange Commission as Exhibit 4(a) to the company's
Current Report on Form 8-K dated June 17, 1986
(File No. 1-604), and incorporated by reference herein.
(b) (i) Rights Agreement dated as of July 9, 1986, between the
company and Harris Bank and Trust Company, filed with
the Securities and Exchange Commission as Exhibit (1) to
Registration Statement on Form 8-A on August 15, 1986
(File No. 1-604), and incorporated by reference herein.
(ii) Amendment to Rights Agreement dated as of October 18,
1988, between the company and Harris Bank and Trust
Company. (Note 5)
10. (a) Top Management Long-Term Disability Plan. (Note 3)
(b) Executive Short-Term Disability Plan Description. (Note 3)
________________________________________________________________________________
See Notes on page 13.
10
(c) Walgreen Management Incentive Plan (as restated effective
October 12, 1994), filed with the Securities and Exchange
Commission as Exhibit 10(a) to the company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1994, and
incorporated by reference herein.
(d) (i) Walgreen Co. Restricted Performance Share Plan and
amendments thereto effective October 18, 1988 and July
8, 1992, filed with the Securities and Exchange
Commission as Exhibit 10(d) to the company's Annual
Report on Form 10-K for the fiscal year ended August
31, 1992, and incorporated by reference herein.
(ii) Amendment No. 3 to the Walgreen Co. Restricted
Performance Share Plan (effective September 1, 1994),
filed as Exhibit 10(b) to the company's Quarterly
Report on Form 10-Q for the quarter ended November 30,
1994, and incorporated by reference herein.
(e) Walgreen Co. Executive Stock Option Plan (as amended
effective October 13, 1992) filed with the Securities and
Exchange Commission as Exhibit 19 to the company's Quarterly
Report on Form 10-Q for the quarter ended February 28, 1993,
and incorporated by reference herein.
(f) (i) Walgreen Co. 1986 Director's Deferred Fee/Capital
Accumulation Plan. (Note 1)
(ii) Walgreen Co. 1987 Director's Deferred Fee/Capital
Accumulation Plan. (Note 2)
(iii) Walgreen Co. 1988 Director's Deferred Fee/Capital
Accumulation Plan. (Note 4)
(iv) Walgreen Co. 1992 Director's Deferred Retainer
Fee/Capital Accumulation Plan. (Note 8)
(g) (i) Walgreen Co. 1986 Executive Deferred
Compensation/Capital Accumulation Plan. (Note 1)
(ii) Walgreen Co. 1988 Executive Deferred
Compensation/Capital Accumulation Plan. (Note 4)
(iii) Amendments to Walgreen Co. 1986 and 1988 Executive
Deferred Compensation/Capital Accumulation Plans.
(Note 6)
(iv) Walgreen Co. 1992 Executive Deferred
Compensation/Capital Accumulation Plan Series 1. (Note
8)
(v) Walgreen Co. 1992 Executive Deferred
Compensation/Capital Accumulation Plan Series 2. (Note
8)
(h) Walgreen Co. Executive Deferred Profit-Sharing Plan (as
restated effective April 13, 1994), filed with the Securities
and Exchange Commission as Exhibit 10(b) to the company's
Quarterly Report on Form 10-Q for the quarter ended May 31,
1994, and incorporated by reference herein.
________________________________________________________________________________
See Notes on page 13.
11
(i) (i) Form of Change of Control Employment Agreements. (Note
5)
(ii) Amendment to Employment Agreements adopted July 12,
1989. (Note 7)
(j) Walgreen Select Senior Executive Retiree Medical Expense
Plan. (Note 6)
(k) (i) Walgreen Co. Profit-Sharing Restoration Plan (restated
effective January 1, 1993), filed with the Securities
and Exchange Commission as Exhibit 10(k) to the
company's Annual Report on Form 10-K for the fiscal
year ended August 31, 1993, and incorporated by
reference herein.
(ii) Walgreen Profit Sharing Restoration Plan Amendment No.
1 (effective October 12, 1994), filed as Exhibit 10(c)
to the company's Quarterly Report on Form 10-Q for the
quarter ended November 30, 1994, and incorporated by
reference herein.
(l) Walgreen Co. Retirement Plan for Outside Directors. (Note 7)
(m) Walgreen Section 162(m) Deferred Compensation Plan (effective
October 12, 1994), filed with the Securities and Exchange
Commission as Exhibit 10(d) to the company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1994, and
incorporated by reference herein.
(n) Agreement dated October 13, 1994, by and between Walgreen Co.
and Charles D. Hunter (for consulting services), filed with
the Securities and Exchange Commission as Exhibit 10(e) to
the company's Quarterly Report on Form 10-Q for the quarter
ended November 30, 1994, and incorporated by reference
herein.
11. The required information for this Exhibit is contained in the
Consolidated Statements of Earnings and Retained Earnings for the
years ended August 31, 1995, 1994 and 1993 and also in the
Statement of Major Accounting Policies, each appearing in the
Annual Report and previously referenced in Part IV, Item 14,
Section (a)(1).
13. Annual Report to shareholders for the fiscal year ended August 31,
1995. This report, except for those portions thereof which are
expressly incorporated by reference in this Form 10-K, is being
furnished for the information of the Securities and Exchange
Commission and is not deemed to be "filed" as a part of the filing
of this Form 10-K.
21. Subsidiaries of the Registrant.
23. Consent of Independent Public Accountants.
27. Financial Data Schedule.
________________________________________________________________________________
See Notes on page 13.
12
NOTES
(Note 1) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1986 (File No. 1-604),
and incorporated by reference herein.
(Note 2) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Quarterly Report on Form 10-Q
for the quarter ended November 30, 1986 (File No. 1-604),
and incorporated by reference herein.
(Note 3) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1990 (File No. 1-604),
and incorporated by reference herein.
(Note 4) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Quarterly Report on Form 10-Q
for the quarter ended November 30, 1987 (File No. 1-604),
and incorporated by reference herein.
(Note 5) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Current Report on Form 8-K
dated October 18, 1988 (File No. 1-604), and incorporated
by reference herein.
(Note 6) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Quarterly Report on Form 10-Q
for the quarter ended November 30, 1988 (File No. 1-604),
and incorporated by reference herein.
(Note 7) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1989 (File No.
1-604), and incorporated by reference herein.
(Note 8) Filed with the Securities and Exchange Commission as
Exhibit 10 to the company's Annual Report on Form 10-K for
the fiscal year ended August 31, 1992, and incorporated by
reference herein.
13
WALGREEN CO. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
(Dollars in Thousands)
Additions
Balance at Charged to Balance at
Beginning Costs and End
Classification of Period Expenses Deductions of Period
Allowances deducted from receivables
for doubtful accounts -
Year ended August 31, 1995 $ 21,601 $ 7,499 $ (4,467) $ 24,633
======== ======== ========= ========
Year ended August 31, 1994 $ 23,050 $ 4,018 $ (5,467) $ 21,601
======== ======== ========= ========
Year ended August 31, 1993 $ 19,059 $ 12,287 $ (8,296) $ 23,050
======== ======== ========= ========
14
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE
To the Board of Directors and Shareholders of Walgreen Co.:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in Walgreen Co. and Subsidiaries' annual report to
shareholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated September 29, 1995.
Our report on the financial statements includes an
explanatory paragraph with respect to the changes in the
methods of accounting for postretirement benefits other than
pensions and income taxes as discussed in the Statement of
Major Accounting Policies, under "Accounting Changes". Our
audits were made for the purpose of forming an opinion on
those statements taken as a whole. The supplemental schedule
II included in this Form 10-K is the responsibility of the
company's management and is presented for purposes of
complying with the Securities and Exchange Commission's
rules and is not part of the basic financial statements.
The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial
statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein
in relation to the basic financial statements taken as a
whole.
Arthur Andersen LLP
Chicago, Illinois
September 29, 1995
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WALGREEN CO.
(Registrant)
By ______R. L. Polark_______ Date: November 22, 1995
R. L. Polark
Senior Vice President
Chief Financial Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant, and in the capacities and on the dates indicated.
Name Title Date
_____C. R. Walgreen III____ Chairman of the Board, Chief November 22, 1995
C. R. Walgreen III Executive Officer and Director
_____L. D. Jorndt__________ President, Chief Operating November 22, 1995
L. D. Jorndt Officer and Director
_____Roger H. Clausen______ Controller November 22, 1995
Roger H. Clausen
_____Theodore Dimitriou____ Director November 22, 1995
Theodore Dimitriou
_____James J. Howard_______ Director November 22, 1995
James J. Howard
_____C. D. Hunter__________ Director November 22, 1995
C. D. Hunter
_____Cordell Reed__________ Director November 22, 1995
Cordell Reed
_____John B. Schwemm_______ Director November 22, 1995
John B. Schwemm
_____William H. Springer___ Director November 22, 1995
William H. Springer
_____Marilou M. von Ferstel Director November 22, 1995
Marilou M. von Ferstel
16
INDEX TO EXHIBITS
A. DOCUMENTS FILED WITH THIS REPORT
Exhibit 3 (a) Articles of Incorporation of the company,
as amended.
Exhibit 13 Annual Report to Shareholders for the Fiscal
Year Ended August 31, 1995.
Exhibit 21 Subsidiaries of the Registrant.
Exhibit 23 Consent of Independent Public Accountants.
Exhibit 27 Financial Data Schedule.
B. DOCUMENTS INCORPORATED BY REFERENCE
Exhibit 3(b) By-Laws of the company, as amended and restated.
Exhibit 4(a)(i) Walgreen Co. Debt Securities Indenture dated
as of May 1, 1986, between the company and
Harris Trust and Savings Bank, Trustee.
Exhibit 4(a)(ii) Walgreen Co. Resolutions of Pricing Committee
Relating to Debt Securities.
Exhibit 4(b)(i) Rights Agreement dated as of July 9, 1986,
between the company and Harris Bank and Trust
Company.
Exhibit 4(b)(ii) Amendment to Rights Agreement dated as of
October 18, 1988, between the company and Harris
Bank and Trust Company.
Exhibit 10 Material Contracts
(a) Top Management Long-Term Disability Plan.
(b) Executive Short-Term Disability Plan
Description.
(c) Walgreen Management Incentive Plan,
as restated.
(d) (i) Walgreen Co. Restricted Performance Share
Plan, as amended.
(ii) Amendment No. 3 to the Walgreen Co.
Restricted Performance Share Plan.
(e) Walgreen Co. Executive Stock Option Plan,
as amended.
(f) (i) Walgreen Co. 1986 Director's Deferred
Fee/Capital Accumulation Plan.
(ii) Walgreen Co. 1987 Director's Deferred
Fee/Capital Accumulation Plan.
(iii) Walgreen Co. 1988 Director's Deferred
Fee/Capital Accumulation Plan.
(iv) Walgreen Co. 1992 Director's Deferred
Retainer Fee/Capital Accumulation Plan.
(g) (i) Walgreen Co. 1986 Executive Deferred
Compensation/Capital Accumulation
Plan.
(ii) Walgreen Co. 1988 Executive Deferred
Compensation/Capital Accumulation
Plan.
(iii) Amendments to Walgreen Co. 1986 and
1988 Executive Deferred Compensation/
Capital Accumulation Plans.
(iv) Walgreen Co. 1992 Executive Deferred
Compensation/Capital Accumulation Plan
Series 1.
(v) Walgreen Co. 1992 Executive Deferred
Compensation/Capital Accumulation Plan
Series 2.
(h) Walgreen Co. Executive Deferred
Profit-Sharing Plan, as restated.
(i) (i) Form of Change of Control Employment
Agreements.
(ii) Amendment to Employment Agreements.
(j) Walgreen Select Senior Executive
Retiree Medical Expense Plan.
(k) (i) Walgreen Co. Profit-Sharing Restoration
Plan, as restated.
(ii) Walgreen Profit Sharing Restoration Plan
Amendment No. 1.
(l) Walgreen Co. Retirement Plan for
Outside Directors.
(m) Walgreen Section 162(m) Deferred
Compensation Plan.
(n) Consulting Agreement between Walgreen Co.
and Charles D. Hunter.